Staying on track to reduce debt is far from the priority when summer hits. When winter ends, Canadians want to take advantage of the good weather. This can mean spending extra money for summer fun and more debt problems down the line. However, as a recent poll suggests, Canadians are recognizing that summer sunshine distracts from sticking to their financial goals.
Some highlights of the Summer Spending Survey include:
- How do we pay for our summer fun? Twenty-eight per cent of respondents go into debt over the summer months. Depending on how much, it can take years to pay back.
- 27 per cent dip into their savings to avoid credit card debt.
- 13 per cent forget about saving or paying down debt in order to fund their summer activities.
- 52 per cent recognize that the short-term pleasure of summer spending negatively impacts their long-term financial situation.
- Canadians plan to spend, but are planning to spend less than last year. 32 per cent of Canadians plan to increase their spending this summer
“You’ll only reap the benefits of responsible money management if you practice it all year, which means continued attention to paying down debt and saving,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
“There is no reason that you can’t increase your spending in the summer- you’ve just got to have the money to do it. Include savings every month over the year to cover any extra costs that you anticipate in the summer, like travel, summer toys or extra outings,” says Schwartz.
“Spend this summer being seasonally frugal and putting aside money to fund next year’s summer fun, debt-free. Staycation this year means awesome road trip that’s already paid for next year.”
If you decide to take a vacation from your efforts to reduce debt payments in favour of extra spending this summer, think ahead to what the fall and winter are going to be like, money-wise.
The BMO survey found that 41 per cent of respondents carry a balance on their credit cards, with an average of $3,000. Forty-eight per cent of respondents admitted to paying minimum payments on their credit cards in the summer than they do in the rest of the year.
Don’t forget that interest charges never take a vacation and will continue to accumulate on your balance. When there’s more put toward your debt, it can save you money. You’ll end up paying more to pay that off in a few months; and if you are adding to that balance with more debt, that debt will be far more difficult to manage.
Reduce Debt and Avoid Sneaky Costs
It’s not just the summer trips that cost the big bucks in the summer months; there are lots of extra, smaller expenses that arise, which seem innocent enough on their own. When you add them all together, the costs can be significant.
Budget for spending on kid’s activities, outdoor concerts, hitting the local patio for drinks or dinner- or even extra ice cream parlor visits. They add up.
One way of defraying your summer spending costs is to take advantage of reward programs, either attached to your credit cards or through loyalty programs. They not only help with the cost of travel, you can use them for restaurants, experiences and attraction tickets.
Has your seasonal spending caused your debt load to grow? Are you struggling paying down debt and find money to pay for your monthly expenses. Taking charge of your debt is a good idea, no matter the season. Contact one of our trained credit counsellors at 1-888-294-3130 or visit our free online debt analysis.
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