Summer is here and that means Canadians will be going out and spending time with friends and family—but, apparently, not saving money.
A new survey by Tangerine reveals that 52% of Canadians adopt a more relaxed attitude when it comes to spending during the warmer months, blowing their funds on entertainment and vacations. A whopping 83% said that this spike in spending would impact how much they could save.
On average, Canadians plan to spend about $5,605 in the summer time, according to a BMO Summer Spending Survey—with 61% relying on credit cards to pay for these splurges. The biggest single expense? Vacations and trips with an average spend of $2,038 .
All this spending leads to two, related problems: savings slowing to a trickle and Canadians acquiring even more debt. According to Dr. Moira Somers, a financial psychologist, this more carefree money mindset occurs because normal routines change in the summer, causing you to become less conscious of your spending. “If people have been in the habit of tracking their finances, for example, that may just go off the rails in the summer,” she says.
There are many more spontaneous opportunities to spend money in the warmer months, she adds—stopping at that pricey coffee shop during a walk, for instance. Spontaneous splurges can also lead to less pleasant unexpected expenses, like car troubles on your way to a camping excursion.
Still, there are times when it just feels good to not have to be so conscious of your spending, says Somers. Counting the cost of every patio drink can put a damper on fun and stress you out. But to adopt that relaxed attitude and enjoy the summer months, you’ll need to pre-plan.
For instance, if you ramp up savings during the winter, to account for the boost in spending later on, you can cover your splurges and not blow the budget. This strategy appears to resonate with us, Canadians. According to the Tangerine report, 47% of Canadians see winter as the season for saving, as opposed to the 12% who associate summer with frugality.
If you want to have fun this summer but are worried of how it’ll affect your ability to save, set up an automatic savings plan to stay on the right track, but still take that mental vacation from money worries.
“There are ways of making it less stressful for you in the long run while helping you stay flexible and spontaneous within reason,” says Somers.