How to spend less while teaching money lessons
(TORONTO, ON) – Summer can come with a hefty bill, and many of us are willing to pay it.
The BMO 2015 Summer Spending Survey puts a price tag on the summer splurge: $5,605. Statistics Canada pegs the average Canadian salary at around $49,000, which means Canadians are spending about 11 per cent of their annual income on summer fun.
The BMO survey breaks down the average summer spend like this:
- Vacations and weekend trips $2,038
- Social outings $1,160
- Entertaining at home $1,006
- Summer activities $522
- Home and garden $322
- Seasonal goods $227
- Big purchases $212
Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, points out that the vast majority of spending is related to having fun, and he worries the pressure to spend increases for families with children.
“School’s out, and kids have high expectations for a memorable summer,” says Schwartz. “But there are ways to stick to a budget while also teaching your children a thing or two about money.”
Whether it’s a weekend road trip or an afternoon activity, Schwartz recommends involving children in summer budgeting and planning.
“All too often, money is a taboo topic at the kitchen table, but the sooner your kids start thinking about money in a responsible way, the sooner they’ll develop sound financial habits that well benefit them for their whole life,” comments Schwartz. “You’ll help them understand the value of a dollar, and it might take some pressure off you at the same time.”
Consolidated Credit recommends the following steps to help plan your summer fun with the kids:
Come up with a reasonable amount
Entertainment spending should take up about 5 per cent of a responsible monthly budget – less than half of what the BMO survey suggests Canadians are ready to spend. If you’d like to spend more than 5 per cent, make adjustments elsewhere in your budget. Don’t go into debt for summer leisure – you could be carrying a balance for a long time and interest rates will cause the amount to swell, many months after the fun is done.
Divvy it up
Once you’ve settled on an amount, sit your kids down with a calendar, pad of paper, laptop, and a stack of Monopoly money. The first and best lesson you can teach your kids about budgeting is made clear when they see that the “summer fun” budget is a finite amount (adults could probably benefit from that exercise too, if credit card debt levels are any indication).
Research activities and destinations, and show them the costs associated with each plan.
Suggest some freebies
Teach your children how to stretch their entertainment dollars by researching free (or almost free) summer activities like street festivals or trips to nearby beaches, lakes, or swimming pools. With any luck, they’ll come to enjoy the simpler aspects of summer while spending next to nothing.
Has your child been bugging you for the latest toy or video game? Let them know that if they come under budget by doing some sound, inexpensive planning, they can take the leftovers to the mall.
“Besides saving money and teaching a few lessons, engaging your children in the budgetary process will also give them a sense of accomplishment and responsibility within the household,” adds Schwartz.
About Consolidated Credit Counseling Services of Canada, Inc.:
Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance.
For more information or to request an interview with Jeffrey Schwartz, please contact: