March Break Money Lesson: How to Beat Consumer DebtMar 16, 2018
In this month’s podcast, we talk about the financial challenges and opportunities March break brings. Our Licensed Insolvency Trustees (LITs) discuss how you can keep your spending in check while teaching your kids lessons about budgeting and consumer debt. Here are a few tips on how to beat debt and have fun with your kids over break.
Plan to avoid March break debt
In last year’s March break spending poll, we found that 20 per cent of parents were planning to take on debt for March break. The problem is, if you plan for debt, you’ll probably get it.
So if you’d like to reduce your chances of adding to your debt over March break, plan ahead. Begin by asking yourself these questions:
1. What can we realistically afford?
On average, parents expected to spend about $600 last year on March break activities. Take a look at your budget before break begins and see what you can afford so that you aren’t surprised or overwhelmed by post-break debt.
2. How do our family’s wants and needs balance out?
Know what you can’t change in your budget — pay yourself first, reduce your debt, and meet all of your bill payments.
Talk to your kids about their expectations or hopes for the March break.
You might find that your kids’ wants are different than the ones you thought they’d have. Have a clear idea of everyone’s wishes to help you price out activities and plan ahead.
3. How can we involve the family?
March break planning is a good opportunity to talk with your kids about budgeting, and wants vs needs.
Discuss the following: Do you still have time to save for the activity if you didn’t change anything else in your budget? If you decide to sacrifice spending elsewhere to have cash for March break, how will your family make those choices? What does it feel like to give up one thing now to get another down the road?
Kids can brainstorm to save money during a day out: filling water bottles at home, preparing meals or snacks, taking public transportation, or finding online coupons or deals are great ways to get kids exciting about “hunting” for cost savings.
Tom Drake’s MapleMoney blog talks about everyday savings that you can use to save money every month. Use the savings you’ll have to start a holiday/break spending account!
Consumer debt can add up quickly during vacations and family outings. Know your spending limits and get the family involved in planning March break fun. Reviewing your budget, balancing wants and needs and creating a spending plan are all valuable money lessons every kid should learn.