OREANDA-NEWS. As temperatures soar so does Canadians' spending, and while many don't feel guilty about enjoying the season, half (52 per cent) admit that their summer habits have negative long-term effects on their savings, according to a new BMO summer spending report.

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

Still, the BMO summer spending report, 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 per cent from 45 per cent);
  • 25 per cent of Canadians will hold off on travel, for budgetary reasons, this summer; and
  • 15 per cent feel they have too many other financial commitments to travel at all this summer.

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

"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.

Canadians and their Credit Cards

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

Nick Mastromarco, Managing Director of Loyalty and Partnerships, BMO Bank of Montreal, encourages those who plan to use a credit card for summer spending to take advantage of credit card rewards programs that many cards offer to help offset their costs.

"While setting a budget is important year round, seasonal spikes in spending are common for Canadians, and those who gravitate towards reward programs when considering how to pay for purchases are wise to do so," said Mr. Mastromarco. "Cash rewards, for example, can be used flexibly at any time, regardless if summer plans include travel. In essence, redeeming rewards can help smooth out any spikes in spending, enabling you to get the most out of the summer season."

Summer Spending at a Glance
  Nat'l Atl Que Ont Pra Alb BC
Will use credit to pay for summer spending 28% 43% 34% 25% 27% 24% 26%
Find it difficult to get back on track after higher summer spending 35% 43% 29% 37% 40% 35% 35%
Will incur a small amount of debt as a result of summer spending 35% 51% 36% 29% 37% 39% 35%
Will pay off their credit card balance from summer spending 'when they can' 56% 79% 45% 54% 68% 65% 59%

 

About BMO Financial Group

Established in 1817, BMO Financial Group is a highly diversified financial services provider based in North America. With total assets of $681 billion as of April 30, 2016, and over 45,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, Wealth Management and BMO Capital Markets.