With the length and the frigidity of our Canadian winter, it’s not surprising that when the temperatures soar, Canadians want to throw caution to the wind to really take in all that the season has to offer, which can mean extra spending for summer fun. However, as a recent poll suggests, Canadians are recognizing that the lure of that summer sunshine has been distracting them focusing on their financial goals, and are taking steps this year to stay on track.
Some highlights of the BMO Summer Spending Report include:
- How do we pay for our summer fun? Twenty-eight per cent of respondents go into debt over the summer months, 27 per cent dip into their savings and 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 goal.
- Canadians plan to spend, but are planning to spend less than last year. 32 per cent of Canadians plan to increase their spending over the summer, which is down from 45 per cent the year prior.
“You’ll only reap the benefits of responsible money management if you practice it all year long, 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 paying down your credit cards 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. 48 per cent of respondents admitted to paying less on their credit cards in the summer than they do in the rest of the year.
Don’t forget that interest never takes a vacation and will continue to accumulate on your balance. 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.
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.