Help clients avoid summer binge spending

Half of Canadians (52%) admit their summer spending habits have negative long-term effects on their savings, according to a BMO report.

Read: Canadians to spend money close to home this summer

One quarter (28%) of Canadians say they go into debt during the summer due to their spending. Another 27% dip into their savings to support their spending and 13% forego saving and paying off debt altogether to enjoy the season.

Still, the report, based on polling conducted by Pollara, revealed that Canadians are aware of their tendency to over-spend in summer and are taking steps to counter it:

• Compared to last year, fewer Canadians plan to increase their spending this summer (down to 32% from 45%);
• 25% of Canadians will hold off on travel, for budgetary reasons, this summer; and
• 15% feel they have too many other financial commitments to travel at all this summer.

Further, the report found that 47% will restrict their travel to domestic trips to avoid fluctuating foreign exchange rates, or opt for a staycation (14%), to get the most bang out of the Canadian buck.

Read: Can you offer monetary gifts to clients?

“We’re noticing disparities across regions right now, with B.C. and Ontario continuing to drive Canadian consumer spending, thanks to strong demographic trends, low interest rates and favourable labour market conditions. On the flip side, oil-producing provinces—Alberta, Saskatchewan and Newfoundland & Labrador—are seeing spending track below year-ago levels as those economies grapple with recession and the fallout from lower oil prices.” said Robert Kavcic, senior economist, BMO Bank of Montreal.

Almost half (48%) admitted to paying off less of their credit card balance during the summer months than they normally would. For the 41% who carry a balance, which sits at an average of almost $3,000, enjoying the season can have longer term implications.

Read: Cottage season’s coming — buy or rent?

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.