REALITY CHECK: How to Keep Debt From Rising With the TempsJun 06, 2018
Already planning your to-do list for those long summer days? It’s probably a good idea to think about your debt and take stock of your finances at the same time.
Patio furniture, gardening supplies, camping gear, beach toys…what Canadian doesn’t get excited to see those items hit the shelves? When you want to enjoy all that summer has to offer, restraint doesn’t come easy.
That’s why now is a great time to give your finances a reality check. Before stocking up on summer goodies or booking that fancy getaway, there are a few things you should be thinking about — especially if you haven’t saved for those expenses beforehand.
4 things you need to think about before adding to debt
Before your next trip to the store (or out of the country) pump the brakes, grab an iced coffee and ask yourself a few questions. It might be worthwhile to jot down your answers:
- How much room do you have in your budget for leisure?
It’s better to plan ahead so you know what you have to spend rather than spend now and pay later. Check in with your current budget and see if your expenses have changed recently.
For instance, gas prices have risen by almost .20/litre since last summer, and they’re not expected to go down any time soon. And, while you’re at it, think ahead. Do your kids need clothes, books, binders or gym bags? You may be able to score a lot of these back-to-school items on sale, but all in, back to school is a big expense. Do you have money set aside for these upcoming costs?
- Can you afford the exchange rates?
Planning a US vacation? Check the exchange rates before you book it. Right now, $1000.00 CAD is only worth $771.00 USD. Instead, look for a cheaper, Canadian vacation and visit some national landmarks with the family! Or, compare the cost of driving to your destination vs. costly airfare for the family and opt for the cheaper plan.
Use this travel budget calculator to visually see how much your trip will cost.
- How are you dealing with your debt load?
Families across the board are dealing with surging prices, whether they’re renewing their mortgages, driving to work, or just buying groceries. All these things, plus all those little things in between, can add up to big debt.
How are you and your family coping? Are you able to reduce debt each month and keep your balances low or do you find yourself adding more and more to credit cards?
Summer travel plans could weigh heavily on your existing debt and cause serious financial stress if you’re already having trouble keeping up. Instead, you might want to reconsider your travel plans and stick to local attractions.
- Are you hitting your savings goals?
More accurately, do you have savings goals? Throwing caution to the wind is never a good thing to do when it comes to savings. If you don’t already have them, set some savings goals. If you have savings goals, make sure they aren’t being set aside in order to meet vacation goals instead.
Optimally, you should have enough saved to pay for your summer travel plans (or any summer activities) in cash — or, at the very least, be able to pay off any credit card debt you incur within a month or two. The best approach would be to ensure you’re not taking on additional debt this summer, whatever your plans.
Check out the Smarter Travel website to see two views about traveling while paying off debt.
Everything in moderation
Whether you’ve been scrimping and saving for months in order to enjoy your summer getaway, or you’re scrolling through WagJag travel offers to book something on a whim, you’ll still need to make sure it’s within your reach.
The thing about debt or anything in excess, is that it will catch up to you eventually. So really, it’s better to find some frugal ways to enjoy your vacation and sidestep the debt conundrum. Not only will you avoid financial stress, you’ll also rest assured knowing you aren’t skipping financial responsibilities for a few days of fun.
Check out Christine Drummond’s blog on her website The Wallet Diet —she talks about how she fits travel into her budget by forfeiting other luxuries.
Long, lazy summer days shouldn’t come with an equally long credit card bill. How will you work travel plans into your budget without adding to your debt this summer? Share your best advice with us on Twitter #FrugalTravel #FamilyFinances #DebtSolutions