Should you be spending or saving your money right now?

We hate to be the bearers of doom and gloom, but as the economy is slowing, the real estate market is cooling, we think that you maybe should rethink your summer vacation plans. The amount of debt held by Canadian households has been rising for about 30 years, not just in absolute terms but also relative to the size of the economy. At the end of last year, Canadian households owed just over $2 trillion. Household debt is around 170 per cent of disposable income. In other words, the average Canadian owes about $1.70 for every dollar of income he or she earns per year, after taxes. About 8 per cent of indebted households owe 350 per cent or more of their gross income.

Additionally, If you plan on spending your vacation dollars outside of Canada, you may want to rethink that. Well now you need to fork over approximately $133 CDN dollars for $100 US dollars.(ouch!)


June 21, 2019 is the first official day of summer. I am trying to decide whether or not I will be traveling this summer. As most of you know, 2019 is my practical year. I think about every nickel I spend ( we don’t have pennies in Canada any more 🙂 ) I was reading the CPA Summer Spending Survey. The average cost of summer vacations was pegged at $3,226 and 12% of Canadian taking vacations planned to spend more than $5,000 on their vacation. What would you do with $5,000 that you had set aside for your vacation? Do you think that you might want to spend that money elsewhere? Perhaps you should start to be a little more practical?


Should you Travel?

Well if the state of the Canadian economy didn’t make you rethink your travel plans, I don’t know what will. Canadians are carrying too much debt. We need to start clawing away at our debt. We also have to start saving for our future!  Let’s just use your summer vacation budget as a hypothetical. If you saved $5,000 for your summer travel and you were being practical – where would that $5,000 be better spent – Credit Card Debt, Retirement Savings, Emergency Fund or Home Renovations/Maintenance?


Credit Card Debt Versus Summer Travel Plans


If you have existing credit card debt, are you not better off using your travel funds to pay down your credit card balance? I asked my friend Sharon what she would do. She felt that her credit card debt was already so high, that it wouldn’t make a difference if she paid it down. She felt like she desperately needed to get away. So for her, she would continue to pay off enough of her credit card debt to allow her to spend money on the things she wants to do like travel this summer. She

Retirement Savings Versus Summer Travel Plans


So what is the state of your retirement savings? Have you even started putting away any retirement savings. I asked another friend of mine what she would do. She also gave me the wrong answer. She said that she still had time to build up her retirement savings so she too would prefer to take the trip this summer.

Emergency Fund Versus Summer Travel Plans


So now you need to look at your emergency fund. You do have an emergency fund – right? Well you should have at least 3-6 months of living expenses in your emergency fund. That is the minimum you should have. Do you have that? I asked another friend of mine, and he told me that he would prefer to travel, and worry about emergencies when and if they would come.

Home Renovation/Refresh Versus Summer Travel Plans


If you own a home, then you need to update your home. If you don’t take the time to update and renovate then your house will be worth less when and if you try to sell it. It is also easier to do smaller renovations/updates over time. I asked a friend of mine if he would prefer to update his powder room or go on summer vacation. He actually decided that he would update his powder room. Yeah – I have at least one practical friend.


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