How to Reduce Debt from Spring BreakMay 08, 2017
Canadian winters can feel endless by March. That’s why so many families look forward to taking a break. But when the vacation is over, you may be left wondering how the debt piled up, and what you can do to reduce it. Before you find yourself paying more than you anticipated for your getaway, discover how to keep your finances on track.
Parents funding March break
For families with young children, a week off of school or a vacation can mean coming up with a lot of different ways to entertain the kids. According to a recent survey, parents in Alberta anticipated spending over $750 on spring break activities, the second highest amount across the country.
With household debt already high in Alberta, the potential of adding more debt after spring break is concerning. Instead, parents can use an event like spring break to teach their children financial literacy and money management skills. Vacations can sometimes be occasions for overspending, but doing so could teach children bad habits about being carefree with money. Here are a couple of things you could do instead to set a good example for your kids:
Save for your vacation ahead of time
If you save as much as possible ahead of time, you can enjoy your vacation without taking on more debt. Sometimes, taking another look at your current debt and restructuring how you’re managing it can also free up money you can put toward saving for your vacation.
If you have a number of individual loans and credit card debt with various interest rates, consider a debt consolidation loan. If you consolidate all of your unsecured debt, you can make one monthly payment with a smaller interest rate, which will help you meet your payment obligations and could then leave you with some extra money that you can put into savings.
Be sure to take a look at your monthly budget regularly. From time to time, certain costs may change—maybe you’ve finished paying for your car, or your mortgage rate has decreased upon renewal. If you can identify those cost savings, you can then redirect the money to another area, like debt repayment or your vacation fund.
Make a family budget part of the fun
Sometimes, budgeting can make people feel like they’re going to miss out on fun. But budgeting for your vacation activities can be enjoyable for kids. Rather than focusing on restrictions, make budgeting a challenge for them—what activities can you take part in that are affordable, or free? How can you save money rather than spend money while you’re away? Questions like those can pose a creative challenge that kids often respond well to.
If you’re planning to stay in a hotel, request a suite with a mini fridge. That can allow you to shop for quick meals and snacks locally and keep them on hand, rather than paying for restaurants all the time. Your family will have a chance to explore the area and learn about local foods that can broaden your children’s tastes (for both travel and food).
There are apps like Mint.com that can make budgeting fun for the whole family. Everyone in the family can keep track of the budget in real time to keep themselves and each other accountable for spending. Consider making a contest out of it—whoever finds the most ways to save money by the end of the vacation wins. Perhaps the winner can choose the final family activity or vacation meal.
Finding ways to save money and reduce debt are valuable money management skills to develop. You’ll also be teaching your children how to enjoy life without putting themselves at financial risk. If you can identify additional ways to cut spending while reviewing your budget ahead of a vacation, all the better.
Did you avoid debt over March break? Tell us on Twitter. #LetsTalkDebt, #BDOdebtrelief