How summer sun can damage your finances

The warmest months should come with a financial health warning

Let the sunshine in. But try to keep the wallet closed. (Reuters)

It may only be May but there have been enough sightings of the sunshine to promise much for an imminent summer. That’s good for our moods as sunlight has been shown to increase serotonin levels, improve night-time sleep and even strengthen our bodies’ immune systems.

But recent evidence suggests that summer itself can be detrimental to our wealth.

As the sun warms our bones it also loosens our purse strings. The personal finance app Money Dashboard, which provides users with a snapshot of where they are spending their money, looked at data from more than 150,000 users and discovered people start spending more when the spring weather warms up.

“Conservative spending over the first quarter of the year seems to give way as the sun comes out, with spending jumping by almost £200 between April and May alone," Jossie Ellis of Money Dashboard told The Independent.

“But this isn’t a fair weather change – rather than a summer blowout, we notice outgoings continue to increase until the end of the year.

“So while people may be starting the year with a strict budget to pay off the festive excess, the warmer months seem to act as a catalyst for the purse strings to loosen… This spending increase is almost across the board – perhaps unsurprisingly, the biggest initial increase is on enjoyment and transport, both up more than 14 per cent between April and May alone.”

That follows a study from credit report provider Noddle that showed 57 per cent of British people spend more money in the summer months, typically £154 more a month. And nearly a quarter of those summer spenders say they rely on credit to fund their extra sunny-day spending.

They said there were simply “more things to do” and that they felt happier during the lighter days, encouraging them to splash more cash.

Summertime also means three quarters of people spend more money on going out in the evenings or eating out with friends and family, while half pay out for holidays and weekends away.

More to do, more to spend

Dr Robin Carey, academic planning and marketing director at the University of Central Lancashire’s school of business and enterprise, explains that there’s simply more to do in the summer months.

“In the summer periods people tend to spend a lot more on experiential things. All those music events, for example. If you go back a few years there was really only Glastonbury but now you think about how many music festivals there are between May and September.

“In summer we spend more money because there are more things to do.”

But when we spend on impulse and because external factors like the weather are affecting our behaviour that can wreak havoc on our budgets and drive summer-lovin’ shoppers into the red.

Carey adds: “Britain is in the grip of a personal debt crisis. More and more of us are spending money we don’t have to enjoy this lifestyle and experience

“What people have been doing, by and large, is spend, spend, spend while credit has been incredibly cheap. So people have funded their adventures with finance.

“Meanwhile, more and more people are spending money with mates. In the past, for example, a stag or hen do would be around their local town, now it’s 3 days in Barcelona. That’s a new spending pattern and a much- increased level. That’s indicative of a more experiential group of people but they are often financing that with cheap credit.

“Many people don’t seem to be controlling that spending impulse and effectively they may be putting themselves into quite difficult levels of debt.”

Jacqueline Dewey, managing director at Noddle.co.uk said: “It’s important to keep a close eye on your bank balance and not slip into relying on credit to bridge the gap between paydays over the next few months.

“Make a budget now to see you through the summer, accounting for the extra spend.”

Treating boredom

One last spending misstep to bear in mind is the impulse to make unplanned purchases when bored. Pension adviser Portafina carried out a survey that showed almost a fifth of British people admit impulse shopping because they are bored. For more almost half that means spending less than £20 a month but 12 per cent of respondents were spending upwards of £70.

Dr Thomas Webb, Reader in Psychology at the University of Sheffield, said: “Research conducted by the University of Sheffield and published in the British Journal of Social Psychology suggests that people justify indulgences like impulsive purchases to themselves.

“For example, people might feel that they deserve a treat because they have worked hard. Alternatively, they might justify an indulgent purchase because they will compensate for it later, for example, by spending less next week.

“The problem is that using such justifications essentially allows people to willingly undermine their good intentions, such as saving for retirement or a holiday. As the popular proverb puts it ‘the road to hell is indeed paved with good intentions.'"