(Special) – As summer temperatures heat up, so too is Canadians’ spending.
A recent survey conducted for the Chartered Professional Accountants of Canada has found that more than half of respondents plan to spend more this summer compared to same season last year.
Specifically, 30 per cent say their expenditures will increase between $500 to under $2,000 this summer compared to last year even though 45 per cent say they have less money this year compared to the same time last year after paying for their monthly household essentials.
The main reasons for having less money this year are due to increased transportation fuel, food and home energy costs.
“What really stands out in this survey is that people plan to spend more this summer than last when they have less money than they did last year,” Doretta Thompson, director of corporate citizenship with CPA Canada, said in an interview. “This is at a time when Canadians are carrying record levels of debt yet many say they plan to finance their summer vacation through debt. This is worrisome.”
While the summer is a great season, almost one in four people in the survey admitted they find it stressful to pay for their expenditures during the summer months.
Nearly two-thirds say they are planning a vacation with 21 per cent expecting to spend less than $1,000. One-quarter plan to spend $1,000 to less than $2,000, 20 per cent expect to spend $2,000 to less than $3,000 and 19 per cent plan to spend $3,000 or more.
Forty-six per cent plan to stay within their province or territory, 39 per cent plan to go to another province or territory, 28 per cent are opting to head to the United States, and 22 per cent are planning a trip elsewhere in the world.
Just over half of survey participants planning to take a vacation say they will use their general savings to pay for their holiday. Of those, 40 per cent are using savings put aside especially for a vacation but 20 per cent say they will borrow money for their holiday.
“While it’s good to see that some people are saving specifically for their vacation there still are people who will finance their holiday through debt, which normally is in the form of credit card debt,” Thompson says.
Thompson urges people to “get back to the basics” when addressing their summer expenditures.
“This involves having a plan/budget, knowing your income and mandatory expenses, and then prioritizing what you do with the rest of your money,” Thompson says. “There is a difference between needs and wants. Getting into the habit of planning, saving and avoiding credit card debt is a great foundation for long-term financial success.”
A good way to handle the urge to spend in summer is to write down all your travel plans and major events over the summer that you’d like to do and then set a budget for them — everything from travel costs, accommodation, gas, food, insurance, spending money, gifts and entertainment.
Once you’ve got a handle on costs, set up a contingency fund for unexpected things like an auto repair, a sudden rise in gas prices or an unplanned invitation to a party, concert or weekend getaway.
You also can go back over your summer expenses of the last couple of years. See how much you spent in the past. Use that as a starting point and start putting aside money each week or month during the year for the summer.
If necessary to save costs and stay within budget, Thompson suggests people consider stay-at-home vacations, last minute deals and even using loyalty points if appropriate.
“It’s a great idea to save for vacations in advance but ultimately it comes down to going back to the basics — plan, save and avoid credit card debt,” Thompson says. “There’s no magic formula but there is some magic in a laying a foundation for long-term financial success.”
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.
Copyright 2018 Talbot Boggs
Talbot Boggs , The Canadian Press
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