Date

June 6, 2023

Is your budget cool for the summer?

Don’t let summer spending leave you in the deep end. Here are some ways to plan a summer budget that keeps debt in check.

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Is your budget cool for summer?

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Summer budgets can be hard to pin down. Summer has a way of lifting our spirits, prompting spur-of-the-moment experiences and carefree spending. And after years of on-and-off restrictions, Canadians are definitely in need of some summer fun.

With COVID restrictions now gone, the daily activities and spending habits of many households will seem like a return to normal. But for families who are dealing with job loss or reduced income, budgets can quickly get stretched. Increases in socializing, activities and getaways are also adding to the return of FOMO (Fear of Missing Out) spending.

The good news is that you can embrace that positive energy and spontaneity while remaining true to your financial goals. 

Enjoying life while still living within your means is all about finding the right balance. 

If you haven’t already, now is the perfect time to sit down and plan your summer spending budget with the following strategies in mind.

1. Be mindful of your spendings and savings

In many ways, the pandemic restrictions were like an imposed spending detox. If your income was reduced, you may have had no choice but to reduce your expenses and focus on the essentials. But even for people whose finances weren’t negatively affected, the shutdowns meant spending much less on items like entertainment, fuel, commuting and travel. You may even have come to the realization that you can get by with a lot less than you normally do.  

Continue revaluating which have-to-haves you really care about and which ones you can do without. As activities and extracurriculars  become available, consider which ones offer real value for your children before making a commitment. You might find that you and your kids are happy with the budget-friendly or free activities often available during the summer. Maintaining a healthy relationship with money requires some give-and-take.  

If you can, try to save as much as possible. If there is one thing many people learned from the pandemic financial crisis: emergency savings are an essential part of avoiding debt. If you can, continue building savings and avoid making any large non-essential purchases. Try practicing the 24-hour rule. If you’re still interested in the desired item after sleeping on it, you’re less likely to splurge.

2. Compromise and reallocate your funds

Look carefully at how you have been allocating your spending over the past months. For many households, reduced outings and less socializing led to an increase in pandemic spending on items like take-out meals, technology, and even home renovations. One way to maximize your summer fun is to reallocate these funds towards improving your summer experience. 

Consider dividing your summer spending into different buckets, like vacations, day trips, meals, and kids’ extracurricular activities. If you’re overspending in one area, you can trim somewhere else. You can also focus your spending on the activities that bring you the most joy and value. Try to avoid putting discretionary expenses on your credit card or dipping into your line of credit. Your budget can help with this, keeping you on track and helping you avoid debt.  

The art of living within your means while still having fun is rooted in compromise. Your desires, on the one hand, and your means, on the other, should meet each other halfway. Rather than taking the whole family out to dinner, opting for a trip to the ice cream parlour is a welcome treat that won’t break the bank. This way you’re still doing fun and exciting things but are avoiding the guilt-trip that comes with overspending.

3. Find savings in your travels

The summer should be the cheapest season to have fun with free activities and great weather. Staycationing means transforming yourself into a tourist in your own city. It takes a little effort and planning, but it can be just as enjoyable as going away. Here are some great tips from MyMoneyCoach.ca. The trick is to schedule variety in your staycation: relaxation (you deserve to lounge around a bit), fun (do what you love) and discovery (take the time to try new things).

Travelling can be a costly expense on your credit card, especially at the most expensive time of the year. If you want to expand your travels past your local city, adding some more people to the trip is a great option. It’s a way to consolidate your time with friends or family and your time away. And it’s a lot cheaper. Renting a cottage when you’re eight people as opposed to four will cut costs significantly. 

Here’s a wonderful and informative read about a group of “floppers” who travel to far-flung destinations they could never afford without the help of their friends.

4. Automate bill payments and reduce debt

Time flies when you’re having fun. This can make it easier to forget about the boring things like payment due dates. The last thing you want to happen is to return to reality with a bunch of unpaid bills. Do yourself a favour: automate bill payments and saving contributions sooner rather than later. 

If you’re planning to be out and about more this summer, enjoying the warm weather, consider re-evaluating some of your subscriptions. Cable, gaming subscriptions, streaming services and more can often be paused or cancelled to save some money. If you’re walking or biking more, your transportation costs might be reduced, too.   

Another good idea is to take some time to think about your debt repayment strategy. If interest is what’s worrying you most, try the avalanche method. Keep making the minimum payments on all your debts, but allocate more funds to the debts with the highest interest rates, like a credit card balance. Once this is paid off you can move on to your next most expensive type of debt. 

The pandemic has shaken up budgets and changed financial realities for many Canadian households. Depending on how your finances have been impacted, you might be struggling to make sense of how to plan your summer. If summer budgeting and a heavy debt load is making you anxious or stressed, consider speaking to a Licensed Insolvency Trustee (LIT). An LIT can help you assess your financial situation and do a stress-test before you commit to any additional summer costs.

How are you planning to keep track of your summer spending? Join our conversation on Facebook and Twitter. #SummerSpending #FinancialWellness

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Date

June 6, 2023

Is your budget cool for the summer?

Don’t let summer spending leave you in the deep end. Here are some ways to plan a summer budget that keeps debt in check.

Share
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