WHEN SPENDING HEATS UP
How to mitigate six common summertime spending traps
Summer isn’t for saving; it’s the season for spending. At least, that’s the message that many Canadians relay when banks trot out their annual spending surveys.
This year, more than half of Canadians surveyed for a Bank of Montreal poll admitted that their summer habits have negative longterm effects on their savings. A quarter say they spend themselves into debt, another 27 per cent dip into savings and 13 per cent forgo saving and debt repayment to have fun. Millennials, a Tangerine survey found, are more likely than other groups to overspend on food and beverages (63 per cent) and outdoor activities (43 per cent) this summer.
“People have a lot of pent-up socializing to do. We hunker down in the winter, and when summer comes we’ll drive miles, we’ll make lots of food,” says Gail Vaz- Oxlade, author of Money Talks. “(People splurge on) the bicycles and the barbecues and the outdoor patio furniture because people are desperate to get out and enjoy the summer. They have a devil-maycare attitude about what they’re spending to have a good summer. (They) think, ‘I’ll go buy myself a canoe.’”
Whether you’re spending on canoes, landscaping or vacations, here are some of the common spending traps summer sets for us — and how to mitigate them.
YARD MAINTENANCE
If you do your own landscaping and lawn care, you’re going to save money. That being said, if you absolutely do not want to cut your own grass or ruin your shoes by aerating the lawn with your high heels, consider hiring a neighbourhood teen.
In an effort to save, my husband and I tried to DIY our own landscaping. But after a few seasons, my front yard, as my husband would tell you, “is bringing down the neighbourhood.” To destroy our weed jungle, dig up two dead trees and some bushes, transplant shrubbery and spread mulch, the quotes began at $1,000.
We decided to use money we had set aside for new patio furniture to clear the yard; planting new greenery and flowers will have to wait until next year. Thinking about your yard as an ongoing project — and thus, ongoing expense — will help you control how much it costs.
“To me, the garden is a work in process. I will decide what I will do now and what I am prepared to wait to do,” says Vaz-Oxlade who devotes $100 a month in her budget to her garden and spends the $1,200 in the spring. “I have a girlfriend who likes things to be finished. She comes into my garden and says, ‘Doesn’t that drive you crazy?’ I say, ‘No, because I can see what it is going to be.’ ”
BIG STUFF FOR YOUR BIG SUMMER FUN
Seasonal items such as patio furniture will go on sale later in the summer; however, your choices will be limited by what is left in stock. If you’re looking for biggerticket items such as water skis or furniture, consider buying it used. This past week, someone just sold a fantastic glass patio table, umbrella and six plush chairs for $190 on my local Bidding Wars Facebook group. If you don’t immediately find what you’re looking for online, set up a Kijiji alert for the item. And don’t forget to comb the house for things that you can sell, yourself, to recoup some cash.
SUMMER CAMP FOR KIDS
“Camp is not cheap. It’s more expensive than daycare,” says Lee Helkie, a certified financial planner and partner of Helkie Financial, in Toronto. “My kids are seven and 10. My daughter’s overnight camp is a riding camp for $1,200 a week. My son is going to a golf camp that’s $400 and a sports camp that’s $375 a week.”
First, determine how much you can spend to send kids to camp. Then decide, with your kids, where and how to divide that sum. (Don’t forget to budget for extra gear, etc. that you may need for the camp.)
“Set the amount with them and talk to them about what they want to do,” Helkie says. “I’m a big believer in, as your kids get older, helping them to understand that (money) doesn’t grow on trees.”
To save you money, some camps offer a siblings discount, so consider sending your kids to the same camp. Also, many have early-bird or return-camper discounts. If you can’t afford the entire cost up front, ask if the camp has a payment plan. Some camps have subsidy programs, with financial applications due earlier in the year.
Don’t forget to keep your receipts for tax time; if the activities are eligible, you can claim on your 2016 return up to $500 for the children’s fitness tax credit and up to $250 for the children’s arts tax credit.
Finally, in lieu of pricey summer camps, look for free or low-cost programs run by your local library, community centre or religious organization.
VACATIONS
The key to saving money on vacations is planning, Helkie says. Search for resorts or hotels or restaurants that offer free promotions for kids. Do a Google search for Groupon deals or coupon codes for local attractions. Consider visiting hot spots such as Arizona or Florida, which can be cheaper in the summer months, or explore your own country. Opt for a road trip and find accommodations with a kitchen through Airbnb, VRBO or HomeAway.com.
“It’s the last-minute kind of stuff that ends up getting you into trouble,” Helkie says. “Get the kids involved in research. Especially as your kids get older; make it a family event. Get them to look at all of the sites.”
STAYCATIONS
People think that by doing a staycation they won’t be spending money. You need to have a budget for this, as well. Keep a calendar of events that you want to enjoy with the family and the associated costs.
“It’s a consciousness about what you’re doing with your money,” Vaz-Oxlade says. “If you have a sense or a plan, you’re far less likely to go wrong. Know what you plan to spend on.”
MAKING MEMORIES WITH YOUR PEOPLE
Barbecues, concerts, weddings — the events add up, but making lasting memories doesn’t have to mean creating lasting debt. It’s about making choices: saying no to something so you can say yes to something else, Helkie says.
Also, it’s never too late to start saving for your good times. It could be as simple as putting aside every $5 bill you see in your wallet, for patio drinks. Even better, set up an automatic transfer of cash every payday for your summer expenditures.
“Your mortgage doesn’t go down in the summer just because it’s nice out,” Helkie says. “You still have to be mindful of what you have, what’s coming in and what’s going out. And it’s way more fun to spend money you have.”