3 Ways Your Family Can Commit to a Debt Free BudgetMay 30, 2018
Summer is coming, but debt doesn’t need to come with it! This month, our podcast is about how you and your family can plan ahead for upcoming summer spending and commit to a debt-free budget. Find out what our LIT’s advice are, but first, check out these facts:
A double scoop of reality
A BMO survey from 2015 found that the average Canadian family spent $5600 on discretionary expenses during summer. This included vacations, entertaining friends, social outings, DIY projects and seasonal goods. However, there are a few things this survey didn’t take into account such as; parents report spending 75 per cent more on groceries during the summer, the increased childcare costs for working parents, day camps and gas prices. And, since interest rates have increased significantly since 2015, these numbers may be much higher.
How to keep it real without skimping on fun
- Don’t spend your budget on vacation
Involve your kids in the summer planning by getting them to brainstorm low-cost summer activities. Create a summer budget that includes all your regular expenses in addition to realistic discretionary spending. For example, avoid impulse spending at gift shops, food stands or theme parks. Instead, plan ahead for those situations so you can practice mindful spending when the time comes.
- Balance wants vs. needs
This can be a tricky concept for kids to learn, but it’s a good idea to introduce them to this early on. Talk about necessary expenses vs. impulse spending and teach them how to track their purchases carefully and follow a budget. If you’re planning a family vacation, find alternatives to high-cost activities that still offer fun but save you money. You can find more great tips from the Pink and Blue Magazine.
- Put your credit cards on ice
Interest rates may rise again before the end of the year, which means adding to your debt load over summer might cost you more in the fall. Instead of putting your financial goals on hold to fund your summer activities, keep your debt relief goals front and center. Save up the money now for your summer expenses so you won’t have to turn to credit card debt or your LOC to fill in the gaps.
And, if you’re having trouble managing your debt load, you can talk to an LIT to discuss your debt relief options.
By choosing a debt-free summer, you can still stick to your financial goals without facing debt regret in the fall. And, you can use these strategies to plan ahead for back-to-school shopping and holiday shopping as well.