Families: What to Do When You See Summer Debt AheadMay 30, 2018
In this podcast, we talk about how you and your family can plan for a debt free summer. Since families face some of the highest costs, we go into some detail about what that is, and what you can do to keep your debt in check this summer season.
Financial hurdles for families
According to Stats Canada, it’s couples with kids who are carrying half of the nation’s household debt.
That’s not that surprising, since raising a family is very costly. Clothes, food, school, utilities, transportation, health care, and basic creature comforts all add up. Then there’s the extracurricular and those can cost around $1100 per child.
Rising interest rates also threaten family budgets. At a time when many Canadians are trying to reduce their debt, interest hikes can make it more difficult to pay them off faster.
With all of these to consider, it’s very important to budget to stay above it all and avoid debt. Create a household budget for your home expenses such as mortgage, rent, utilities and such. Also create a family budget that will include activities, family vacations and allow some extra money for those most costly summers months.
Summer fun isn’t free
Expenses can quickly pile up during the short summer months. Many families found that they spend more than double their usual monthly spending, increasing their consumer debt with family outings, groceries, gas, and entertainment.
Consider a “frugal vacation” this year with activities from this list by Canadian Budget Binder. There are great indoor and outdoor entertainment ideas for families.
In addition, day care costs can be a serious financial hurdle for families during the summer months. In the Sudbury area, day care can cost anywhere from $300 a month for school aged children, to $1,000 a month for infants. For some families with school-aged children, finding enough to cover these day care costs can stretch their budget as far as it can go.
Keep perspective to keep debt in check
Caregivers and parents can feel a lot of pressure to make the most of the summer months and to entertain kids to the fullest.
However, taking on more debt when family finances might be pinched isn’t always a good idea. Even if the summer time brings up more expenses, there are still other costly expenses that comes after the summer like back to school shopping, school year extracurricular and even Christmas holiday spending. Keep this in mind when considering taking on summer debt, as it may be difficult to balance this debt as well as your other priorities.
This year, implement a budget to avoid taking on any more debt. If your kids are old enough, have them research some free or cheap local activities that will fit your means.