It’s an intoxicating blend. Blue skies, warm sun, and vacation time. Summertime is the perfect medicine after a long, harsh Canadian winter, leaving many Canadians with a tremendous urge to take advantage of the welcoming season through some summer splurging.
For some, the tantalizing prospects of summer fun acts as kryptonite to even the strongest of budgets.
BMO released a report saying that just over half (55 per cent) of Canadians were able to stick to their budget. The rest got caught up in the magic of summer, and spent extra on the following:
- Vacations – Canadians overspent an average of $1,283 on weekend getaways and summer trips.
- Impulse buying – Unexpected purchases went an average $350 over budget.
- Entertainment – Dining out, having drinks, and other forms of entertainment resulted in an extra $368 spent.
- Seasonal Consumer Goods – Shoppers spent an additional $379 on children’s activities, clothing, and sporting and outdoor equipment.
Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, isn’t surprised.
“Building a budget is tough, but the hardest part is sticking to it,” says Schwartz. “When you’re constantly pushing yourself to save, you might see a summer long weekend as a perfect chance to take a breather. But unless you factored that into your budget, you’ll feel the sting when the bills come in.”
For the 45 per cent of Canadians that went over budget, it’s time to pay the piper. Forty-eight per cent said that they had to dip into existing savings to cover the difference, while 27 per cent said they had to go into debt or deferred debt payments to pay for their summer indulgences.
With summer behind us, and the temptations of Thanksgiving, Halloween, and the Holiday season ahead of us, Consolidated Credit put together some tips to make your budget bullet-proof:
- Make yourself accountable – Sometimes we overspend without even realizing. Keeping track of all of your expenses, even the little ones, will keep you aware of your budget. Try using a free budgeting app for your smart phone and you’ll see just how quickly those lattes add up.
- Cash is king – Leaving your plastic at home makes it much harder to stray from your budget. If you’ve budgeted $60 for a dinner date, take nothing but three $20 bills in your wallet – it’ll certainly discourage you from ordering that extra glass of wine.
- Cut out bad habits – Vices like cigarettes and alcohol are bad for the body, and they also poison budgets. Enjoy double benefits by cutting back or quitting – you’ll save money and you’ll feel great.
- No more minimum payments – Paying the minimum amount on your credit card bill might be the biggest waste of all. Minimum payments are built in such a way that your pay period expands and the balance barely moves. Stop paying your creditors sooner and start paying yourself by adding more to the minimum payment required.
- Reward yourself – Satisfy your inner splurge-demons by budgeting in some money that is purely discretionary. Treating yourself to something luxurious every now and then will help you resist day-to-day temptations.
If you want to learn more about making responsible financial decisions, check out Consolidated Credit’s free Personal Finance educational section. If you’re struggling with debt, call one of our trained counsellors today at 1-888-294-3130 for a free debt analysis.