How To Keep Your Debt Relief Plans in Focus this Summer?May 30, 2018
Summer vacation is an easy escape from everyday life. Just because you’re away from work, though, doesn’t mean you should leave your debt relief plans behind.
Canadians spend a lot more during the summer months when compared to non-summer months — almost double, according to a 2015 survey from BMO. The same survey found that spending on social outings almost triples during the summer (194 per cent), with one-third of respondents not setting a summer budget.
So how can families keep their debt relief plans in focus and avoid out-of-control spending this summer? You can start with one of these three plans of attack:
- Use a prepaid credit card for your summer activities. To help you stick to your budget, a prepaid credit card can keep you on your plan to reduce debt by capping your spending. Get a card before leaving on vacation, or use it only for special summer stuff — family dinners at a restaurant, going to the movies, or a camping trip.
- Make snowball payments on your debt. If you’re someone who is motivated by small wins, summer can be a great time to try out the snowball method of debt repayment. This is when you pay off your smallest debt first, while making minimum payments on the others. There are apps that can help with this too, such as Mylo, which rounds up your purchases and invests them into savings.
- Keep budget areas separate. During the summer, when entertainment and social outing spending swells, it can be tempting to take budget from one area to pay for something. While this is easy in the moment, it’s important to think big picture about your financial goals. Whether you’re paying off your credit card, adding to savings, or building your retirement fund — don’t sacrifice the future for a big summer spend now.
By keeping your debt relief plans top-of-mind during the summer break, you’ll have less financial stress when fall comes around, and be that much closer to making your year-end goals for savings and paying off debt.
For more tips on how to plan a debt-free summer when the family budget is tight, listen to this podcast with advice from BDO Licensed Insolvency Trustees (LITs). They get into topics like reviewing last year’s summer spending and committing to a budget.