Today is Canada Day and with Labour Day just two short months away, Canadians believe that some of their most expensive spending days of the year are ahead. A recent poll by CIBC finds that 40 per cent of Canadians say they spend more money in the summer than during any other season. As well, nearly half (45 per cent) of those polled say they will need to use their credit card or dip into savings in order to foot their summer fun bill.
Key Poll Highlights:
40 per cent of Canadians say they spend more in summer compared to any other season
49 per cent of Millennials (aged 18-34) say summer is the most expensive time of year
$1,766 is the average amount Canadians plan to spend on summer fun, including travel and day trips, dining and dinner parties, recreational activities and summer goods like barbecues and sports equipment
45 per cent of Canadians say they try to save for summer fun, but find they use their credit cards or dip into savings to pay for extra costs
“Summer can be filled with social events and family travel as Canadians try to make the most of the short-lived warm weather,” says Christina Kramer, Executive Vice President, Retail and Business Banking at CIBC. “But if you haven’t budgeted for this, the costs can add up, forcing you to dip into savings or take on unplanned debt.”
When asked about this summer’s spending plans, 77 per cent haven’t saved enough to pay for summer – including 41 per cent who haven’t saved anything and 36 per cent have saved only some of what they need.
Watch out for “expense creep”
Compounding the challenge of keeping expenses in check is that in other seasonal events, Canadians often spend more than what they anticipate.
For example, a CIBC poll in November 2014 showed that Canadians expected to spend $517 on holiday shopping, however a follow-up poll in mid-December showed average spending was already at $678 with a busy weekend of shopping still to go before the holidays.
“During holidays, it’s important to avoid expense creep – which happens when you spend a little more than you expect over a period of time, and end up with an unexpected credit card bill at the end of summer,” says Ms. Kramer. “Having a budget and sticking to it is the best way to enjoy the holidays worry free. Canadians should treat these expenses the same as all others and make them part of your overall annual financial plan. Work with a financial planner so you can enjoy the summer sun and fun within your financial means and not have to hibernate for the rest of the year.”