Canadians to hold back on summer spending: survey

Money is removed from an ATM. THE CANADIAN PRESS/Ryan Remiorz

As we head into the warmer months and what is often a time of splurging, many Canadians will be dialing back on summer spending.

A new survey from TD dives into how Canadians are managing their finances this summer. One of the major findings states that more than one in three Canadians plan to spend less this summer.

“Canadians are approaching the summer with a more cautious mindset, which is largely driven by ongoing cost pressures,” says Sumaiya Bhula, senior manager and product group owner for Saving and Investing Journey at TD.

The survey also says among those cutting back, more than four in five point to broader economic pressure overall. That is driven primarily by cost of living, economic uncertainty and higher transportation costs, according to the research.

President of Canadians for Affordable Energy Dan McTeague tells CTV News that while gas prices will drop 10 cents on Thursday, that’s the best we’re going to get as we head into the summer season.

“173 is about as good as it’s going to get,” he says.

This yo-yo effect where prices drop slightly and then skyrocket back up will be the norm in what he calls the “worst energy crisis that we have seen in modern time.”

The shortage of oil and the ongoing war between the U.S. and Iran are to blame for the high fuel costs.

“The reality is we’re dealing with a severe shortage of oil and petroleum products,” McTeague says. “It’ll take four to six months before that’s rectified and we get back to those prices just before the war began – in the 150 range. We’re not likely to see those prices any time soon.”

Bhula tells CTV News that while summer is the second highest spending season of the year, with Christmas being number one, it adds financial strain.

One of the other key findings in the survey points to where the money is going.

Instead of spending on luxuries like vacations, Bhula says Canadians are putting their money towards basic needs instead.

“Canadians are redirecting their funds to every-day needs and long-term goals,” she says.

Nearly two thirds of Canadians are shifting their savings to groceries, fuel and housing, while others are focusing on longer term stability like paying down debt and building their savings.

Bhula says when it comes to booking flights, the cost of those are increasing too as a result of the rising cost of fuel.

“The cost of fuel has gone up significantly that you’re starting to see a fuel surcharge in flights as well, which is causing the ticket prices to go up, which is causing Canadians to rethink their travel plans for the summer and also into fall as well,” Bhula says.

So what can we do if we still want to enjoy our summer but also not break the bank?

How to be both financially smart and have some summer fun

Bhula says it’s all about reviewing your financial goals.

“Thinking about your short and long-term goals and updating that budget and recalibrating,” she says. “Determine your financial priorities and help adjust your plan and make them realistic. And decide what’s important to you right now and what’s important to you in the long-term.”

She recommends leveraging budgeting tools and tracking spending limits. She also advises automated savings, meaning putting aside an amount of money each month that can even be as small as $10 can go a long way.

Bhula also suggests thinking about how you are spending and if there are certain things you could be cutting back on. She encourages people to buy things on sale, look into loyalty point programs and avoid impulse buying.

When it comes to summer fun, instead of doing multiple things, she says to pick the two you really want to do this summer and indulge in those.