Keeping Your Finances Afloat This Summer: Tips To Avoid The Debt Deep End

Summertime is finally making its presence known across the country. The weather is warmer, patios are open and schools will be out in just a few short weeks. Although it is easy to get swept up in the lure of a Canadian summer, it’s important to remember that just because the temperatures outside are rising it doesn’t mean your amount of credit card debt has to as well.

During a 2016 CIBC poll, Canadians stated they planned to spend $1,346 on summer activities like travel, dining, recreation and home improvement. A 2016 Bank of Montreal survey found that 28% of Canadians use debt to pay for their summer spending habits, 27% admit to dipping into their savings to cover the costs and 13% say they put saving and repaying debt on the back burner during the season.

To help keep your summer spending on track, we’ve come up with the following tips to help you save this season:

1. Make a summertime budget. You’ve heard us say it before, and we’re saying it again: budget, budget, budget! With vacations, child care costs, recreational activities and an abundance of enticing patios to eat at, it’s pretty safe to assume that most people expect to spend more money during the summer months. The best way to deal with these new expenses: update your monthly or quarterly budget to reflect the extra costs during the upcoming months. Plan ahead and save a little more each paycheck in June (or earlier if you remember), so you don’t have to dip into savings for summer activities. Budgeting is an important skill to practice all year long, but when you know you’re spending will increase it’s important to plan so you aren’t relying on credit that you may not be able to pay back, or savings that you may need in the future.
2. Use prepaid credit cards. If you aren’t the best planner and are having trouble sticking to your budget, try using prepaid credit cards instead. Similar to a regular credit card, prepaid credit cards can be used almost anywhere – even online – but the balance that is on the card is all you can use, there is no overdraft or risk of overspending what you can’t afford. These are great to use on vacations, when going out to eat or when hitting up the mall as it eliminates the temptation of overspending.
3. Try “DIY-ing” your home improvement projects. Whether it’s cleaning up the backyard or repainting your kitchen, try doing what you can without hiring a contractor or landscaper. Many small home improvement projects like painting, gardening and small plumbing and electrical fixes, can easily be done with some elbow grease and don’t require hiring a third party. If you are unsure if it’s something you can do on your own, do your research, ask a friend, or get a third opinion from someone you trust before adding the extra cost of labour to your budget. However, as nice as it is to believe we can cut corners and do somethings ourselves, it’s important to remember not all DIY projects turn out like the picture. It’s always good to plan for a 10-15% contingency fund in your home improvement budget for those “oops” moments.
4. Take advantage of rewards programs. If your credit card offers cash back, travel or entertainment rewards, the summer is a great time to take advantage of using them. Plan to save your rewards for that summer vacation or use cash back on extra expenses like food, amusement park tickets, or to gas up for a road trip. If you don’t have enough rewards saved up for this summer, plan to save up for next summer!
5. Try a vacation rental instead of an expensive hotel. Vacation rental sites like Airbnb and VRBO are becoming a popular and sometimes a less expensive alternative to hotels. If you require more than two rooms for your family, friends or travel group, vacation rentals offer an abundance of options and the more people that can divide up the cost, the cheaper the accommodation can become. Vacation rentals often also offer a full kitchen, which means you can plan to cook at home certain nights of your vacation, saving on food costs so funds can be used towards other vacation activities.
6. Look into free events in your neighbourhood or municipality. Many neighbourhoods and municipalities across the country hold free community days and events throughout the summer months. Whether it’s movies in the park, parades and festivals or concerts, there is normally something that everyone will enjoy on their event calendars. Check your local municipality’s website to view their upcoming events. Also, don’t forget that this year each national park, historic site and marine conservation will have a free admissions day on top of their normal free admissions on Canada Day. This means you can spend a day or two exploring some of our national treasures for free! Check out Parks Canada’s site to see when the free admissions day is at a national park near you.

There are many more ways you can have a fun summer season without dipping into your savings or credit. No matter if you are going out of town or having a stay-cation, taking advantage of summer deals and rewards programs, or getting your hands dirty with DIY projects there are simple and effective ways to help keep your finances afloat this season.