How to Reduce Debt and Still Have an Awesome March BreakMar 01, 2018
Are you struggling with your March break budget? Don’t let debt put a damper on your plans. Instead, find ways to reduce costs now and save up for your goals, whether you’re heading somewhere warm or sticking around town.
Parents of young children are carrying the most debt
Gen X parents, between the ages of 33 and 54 are shouldering the highest consumer debt of all demographics in Canada. They’re also holding the largest mortgages and they’re the most likely to be paying exorbitant childcare costs. Statistics Canada shows that Canadians now owe $1.71 for every dollar of disposable income earned. And, with interest rates continuing to rise, parents may have even more trouble meeting their financial responsibilities.
How to fight back against rising costs as a family
If debt payments, childcare, and costs of living are weighing on your family, it’s time to take a step back and make a new plan. It just takes some time, support and commitment. Here’s where to start:
- Make a family budget – Gather everyone together when you have time to talk about finances. Discuss goals and vacations you’d like to take as a family. Build a plan and create a budget together to save for this vacation so you all know what’s needed and the work required to make it happen. Use a worksheet as a guideline and post it on the fridge so everyone can see it.
- Talk about debt – Take some time to talk with your kids about managing debt and credit responsibly. Depending on their age, Practical Money Skills Canada has some great resources for parents who want to improve their kids’ financial literacy. In addition, talk with your spouse about how your family is currently managing debt and how you can manage it better together. Use this debt calculator to add up your debts or a debt repayment calculator to compare your debt repayment options.
- Reduce costs – Being frugal doesn’t mean sacrificing your lifestyle. It means making wiser decisions and spending less when you can. Take a hard look at your costs per month and have each family member brainstorm ways to reduce spending. The money you save can be added to your vacation fund and also boost your emergency fund. By living within your means, you’ll be less likely to rely on debt to fill in the gaps.
How to plan for the future while enjoying the present
Last year, parents spent an average of $600 on March break activities for their kids. If you plan to travel, this could cost significantly more. Planning ahead and involving your kids can allow everyone to enjoy the break, without adding financial stress. Here are some tips:
- Give your kids a March break allowance – A great way to teach kids money management is to give them a pre-determined budget for their March break activities. Whether you’re going away or staying home for the break, allow your kids the opportunity to map out their spending and make their money stretch. This will teach them responsibility and show them that in order to maximize the fun, they need to plan and spend their money wisely.
- Make saving a family habit – Take your kids grocery shopping and allow them to find bargains to help stay on budget. Also, look for some local programs through your public library or community center for free or low cost family activities.
Set goals together – Stress the importance of saving up for rewards, vacations or big purchases. This helps involve kids in family finance while keeping the whole family motivated to reach a fun goal. Here are some great financial resources for kids to learn how to manage money.
Whether you’re traveling or chilling at home this March break, take time to talk money as a family. Have your kids help with planning activities or making family purchases. All of these things can give them some much needed practice for managing their own money and avoiding debt in the future. For more parenting tips and hilarious confessions, visit the parenting site ScaryMommy.com.