Don't Let Summer Surprises Catch You Unprepared

Ahh, summertime. We’re right in the middle of those lovely, long summer days filled with travel, weddings, graduations, and so much more. From fire pits to fireworks, summer is a time for fun. And that probably doesn't include poring over your financial plan to make sure everything is in tip-top shape. But lurking behind all that fun is… finances. 

Whether we like it or not, finances permeate even the seemingly carefree moments of life. 

A Lesson Learned

Let’s take that quintessential summer wedding, for example. Among the many amazing things about my wife is her side business as a wedding planner. A few years ago, she was coordinating this beautiful summer wedding – incredible water views, 20 foot ceilings, and even a floating glass dance floor! As the night wore on, a glass bottle made its way onto that incredible dance floor. We all know what happened next; the bottle was knocked out of his hand and shattered atop the floor. Oh well. It’s a wedding. It was cleaned up and festivities resumed. 

The next day, the bride receives an angry phone call from the venue saying the floor was cracked and the couple would need to pay $20,000 to fix the floor. This floor that could withstand dozens of guests and hours of dancing couldn’t handle a 12-ounce bottle. Nonetheless, drinks were contractually prohibited from that area, and the couple would be responsible. Their honeymoon would be ruined. But wait! This financially savvy couple (and my wonderful wife) made sure to consider every financial aspect when planning their wedding and had secured wedding insurance before their big day. The honeymoon in Fiji wouldn’t have to wait after all. 

Will this happen in your life? Probably not, but the lesson is universal. Even when finances are the last thing you want to contemplate when taking advantage of those beautiful summer days, take a moment to do so. Or have the financial advisor in your life do it for you – that’s why you pay them! 

Now Apply it to Summer

Let’s look at some of those summer activities through the eyes of a savvy planner.  

Traveling – Have you considered travel insurance? Do you know if that diamond ring is fully covered if lost or stolen in a foreign country? Do you know what your health insurance will actually pay for outside the U.S.? Preparing for a trip these days takes more than booking the perfect hotel; you need to be ready for what could go wrong. A solid travel policy usually runs about 3 to 8% of your total trip cost, a small price to protect non-refundable deposits or cover a medical emergency far from home. It’s bad enough when a vacation is ruined, and it’s much worse when the impact follows you home. 

Graduation – Whether they’re off to school or the work world, money follows close behind the excitement. For the college-bound, revisit that 529 plan and map out what tuition, housing, and books will actually cost this year. For the newly employed, the first paycheck is a teaching moment: build a budget, start an emergency fund, and evaluate those employer benefits. Want to provide some financial support to a recent college grad without just sending a Venmo? Consider gifting them enough to contribute to their employer’s retirement plan. They’ll learn about the benefits of saving early, often, and consistently. 

Entertaining – What are the liability limits in your homeowners policy? Is your umbrella coverage high enough? Does your event necessitate special events insurance? A backyard full of guests, or a pool that insurers so kindly call an "attractive nuisance,” is exactly the kind of fun that can turn into a claim. 

These are the kinds of things we think about every day at Composition Wealth. We don’t actually want you seeing peril behind every corner. Leave it to us; talk to your financial advisor and go enjoy your summer!
 

Composition Wealth, LLC ("Composition Wealth") is a registered investment adviser. Advisory services are offered only to clients or prospective clients where Composition Wealth and its representatives are properly licensed or exempt from licensure. This communication is for informational purposes only and should not be considered financial, tax, or legal advice. Please consult with your professional advisors before making any financial decisions.