Summertime in the Great White North can be a special time of year for many. The start of summer brings warmer temperatures, the closure of (most) primary schools until September, and a lot of opportunities for vacations to places with great beaches. Some young people even use the opportunity to make money in the summer since they don’t have to worry about attending classes.
However, the change of pace brought about by the change in season can cause many people to make some basic money mistakes that can ruin their budgets and rack up debt. Knowing what the most common summer money mistakes are and how to handle them could be key for protecting your financial future—and avoiding building your credit card debt in Canada (or any country you happen to visit for your summer vacation).
Why Managing Money in the Summer Is Important
So, what is it about summertime that makes managing your money effectively so important? Keeping to a budget and carefully managing your income and expenses is important at all times, after all.
However, the summer season offers some challenges and even some temptations that might not occur to you during other seasons. This can lead to some “summer money mistakes” that affect your finances.
Additionally, knowing how to make money in the summer and save up for the start of the school year, Christmas shopping season, and other events can help you be more prepared for the rest of the year. Excessive spending of your money in the summer, on the other hand, can leave you in a pinch later—or start you on the path of racking up debt.
So, whether you’re a younger person saving up for college, an experienced employee who works through the summer like any other season, or a retiree, summer money management is important.
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Top Summer Money Mistakes to Avoid
Not every money mistake on this list will mean the end of the world. After all, summer is an important chance for you to take things easy (at any age). But, it’s still important to take care to avoid these summer money mistakes so you can maximize your financial wellness.
1. Taking Vacations Beyond Your Budget
During the pandemic of 2020, a lot of Canadians skipped their travel plans (or were forced to cancel because of pandemic control measures). This helped to cut some big summer money expenses for a lot of people. However, indications for 2021 show that 31% of Canadians say they are “likely” to take a summer vacation.
While many are planning day trips to places they can reach from home relatively easily and inexpensively, some are still planning more expensive trips to foreign destinations.
The problem with this is that vacations can have a lot of hidden expenses. These extra costs can bite into your budget unexpectedly—which can lead to relying on your credit card to get through a lot of foreign transactions. Some of these expenses include things like parking (especially if you travel to big cities like New York), food bills (or eating out), and airline checked bag or pet travel fees.
What Can You Do to Minimize Vacation Costs?
As important as it is to avoid overspending, that doesn’t mean you have to completely skip taking a vacation to save money in the summer. After all, it’s important to take a break every once in a while to support your own health and wellbeing!
Here are a few ideas to help you improve your summer money management while still enjoying your time off:
- Keep Your Vacation Local. Instead of going on a fancy cruise to Cancun, Hawaii, or any of the thousand other summer tourist traps, consider taking a more local vacation. Visit family, take a trip to a local fair or theme park, or even do a “staycation” where you just relax at home.
- Research Local Costs for Basic Services. If you do end up choosing to travel for your vacation, take some time to research your destination before you leave. Try to find out which restaurants serve the locals and which ones are designed as overpriced tourist traps, local hotel prices, and even currency exchange rates between your Canadian cash and the local currency.
- Set a Budget and Plan for Your Trip. When you get to where you’re going, what activities do you plan to engage in? Setting up a budget and itinerary for your trip can help you keep on track and avoid overspending. However, you can’t plan for every spontaneous thing that might happen, so be sure to set aside a small discretionary fund for your trip.
- Remember Your Health Care Needs. What would happen if you got sick or injured on your vacation? When setting your travel budget, it’s important to consider medical emergencies. For example, you might need to allocate funds for emergency health care visits when in countries that don’t offer free health care. Be sure to check with your work benefit coverage to see if it provides health coverage when you’re travelling to other countries. If it doesn’t, consider picking up a travel health insurance plan.
- Exchange Your Currency with Your Bank, if Possible. A lot of tourist destinations offer currency exchange services for a nominal fee. Banks may even let you use your debit or credit card at places that charge in foreign currency with a small transaction fee as well. However, you can often save a bit of money by conducting a currency exchange at your bank to match your planned vacation budget before you leave. This way, you only have to make the exchange once and don’t incur repeated “convenience fees” from vendors and your bank. Also, paying cash helps protect your banking info from overseas scammers (a big risk when paying with a card in foreign countries).
2. Buying Too Many Summer-Specific Items
It’s usually the winter season that gets a bad reputation for people making a lot of large purchases (because of holidays like Christmas). However, summertime purchasing can contribute to summer money troubles just as efficiently as a gift-giving holiday does during the winter.
One of the big summer money mistakes that people make is buying a lot of summer-specific items that they won’t use for the rest of the year—though most such expenses are relatively small. For example, swimsuits, beach toys, water guns, and popsicle sticks are all relatively minor items that, individually, won’t put much strain on people’s budgets.
The trouble is that some summer-specific purchases are much bigger. For example, a lot of families decide to purchase big-ticket items like pools to have a place to soak in the summer sun or cool off after work.
Unfortunately, pools are incredibly expensive. The average cost of an inground swimming pool in Canada ranges between $20,000 and $30,000 just for the initial installation. Add to this the cost of maintenance (for keeping the water clean, adding more water, heating the pool, and more), which can be several thousand dollars a year.
Many Canadian homeowners quickly find that their backyard relaxation tool can become a major source of stress that complicates their summer money management. After all, Canadians can only make use of their backyard pools for about 4-5 months of the year.
What Can You Do about Summertime Purchase Expenses?
The easiest fix is to avoid making large purchases like new inground pools. Instead of buying a large and expensive custom inground pool, consider buying a much smaller and easier-to-maintain above ground pool that you can set up quickly during the summer and take down once fall starts.
Or, consider getting a membership to a gym that has a pool so you can get in some exercise to improve your health while saving money on pool maintenance costs!
For other, more minor purchases like swimsuits and beach/pool toys, try to keep costs down by buying sturdy items that you can use for years. Also, if you already have a few swimsuits lying around, do you really need a new one?
3. Going Out to Eat Too Often
It’s not something that most people think about, but eating out can get expensive. In the summer, when more people have some time off, it’s common to start going to restaurants more often to enjoy a semi-fancy dinner that you don’t have to cook yourself.
However, eating out a lot is one of the biggest (yet subtlest) summer money mistakes that you can make.
The cost of eating out can be hard to generalize, as prices vary wildly depending on what province you’re in, the type of restaurant you go to, and what you order—after all, a quick trip to a street vendor for some poutine won’t cost the same as going to an Italian restaurant for wine and steaks.
For example, some estimates state that the cost of a hotdog, hamburger, or poutine from a street vendor is usually $4-$7. Meanwhile, the cost of a dine-in restaurant can fluctuate between $12 and $40 for just a main dish.
Over time, the cost of eating out can really add up. How much? Well, if you eat three meals a day, and just replace one of those meals with a trip to a restaurant, street vendor, or fast food joint, you could add between $28 and $280 to your weekly food costs.
What Can You Do to Control Summer Food Costs?
The most obvious fix is to avoid eating out too much to save your summer money for other expenses. Instead of going to a fancy restaurant to eat a steak dinner, consider cooking at home using fresh ingredients from the store. Or, if you want to get out of the house, consider going out to the park for a quick picnic. All you need are some sandwiches or snacks, a drink, and a container (like a picnic basket) for everything.
Of course, it also helps to find ways to reduce your at-home grocery bill as well. For example, you can use coupons to buy food at a discounted price, comparison shop between multiple stores to get the lowest price, stock up on nonperishables when they’re on sale, and even buy the “last day” meat when it goes on sale when you get hungry for steaks.
Finally, plan ahead as much as you can by creating a food plan and budget that minimizes waste. Try to mix things up so you don’t get too bored of your menu while sticking to affordable food items. This way, you can stretch your food dollars just a bit further regardless of the season.
Need Help with Summertime Debt?
What can you do if you’ve already made some summer money mistakes or are already in debt? One of the first things you should do is seek debt help services.
Financial debt counselling services can help you find the best way to eliminate your debt so you can get back to your life with as little hassle as possible. For example, some people might benefit most from taking out a debt consolidation loan while others may benefit more from a Debt Consolidation Plan (DCP). The choice between debt consolidation options will often depend on your specific financial situation. This is where a certified credit counsellor can help assess your situation and present you with the best options.
However, finding a reliable debt consultant can be tough.
If you need help tackling debt created through a few summer money mistakes or other issues, Credit Canada offers support that is both informative and nonjudgmental. We’ve helped millions of people resolve over $350 million in debt—and we look forward to helping you, too!
So please, if you’re struggling with debt, contact us.