5 Tips for Staying Within Your Budget This Summer
After a moody winter, most Canadians will agree that summer is the best time of the year. What’s not to love about great weather, patios, and travel plans? But with all of these events going on, we naturally spend more compared to other seasons. A recent report by Licensed Insolvency Firm MNP Debt says nearly half (49%) of Canadians are worried about how much they’ll have to spend on “lifestyle and social obligations” - something the firm calls the “social squeeze.” To help relieve financial anxiety and keep your spending under control, here are five tips to help manage your money this summer.
1. Define your priorities
Think about what matters most to you, whether it’s travelling, eating out at new restaurants, going to music festivals, upgrading to a new phone, or saving. Pick your favourite things and make them a priority by setting more money aside for those activities.
That said, you’ll also need to factor in events such as weddings or family reunions which may cost money in the way of car rentals or gas, accommodations, and gifts. Take a look at what you have coming up this summer, and don’t be afraid to say no to certain social events if it’s going to cost you too much money to take part. (Some might say this is part of the “loud budgeting” trend that recently took social media by storm.)
2. Make a budget
With your priorities in mind, you can create a budget. First, track your spending using Credit Karma or Wilbur, or even an Excel spreadsheet, so you can see exactly where your money is going.
Of course, your rent/mortgage and bills should be paid first, but after that you can determine how much you can afford to spend on fun stuff.
Now that you know what you’re spending your money on, you can come up with an accurate budget. Remember, things like vacations tend to come up once a year, but you still want to put away money towards it months so you’ll have the cash ready when you’re ready to book.
3. Start a sinking fund (or two)
Take your budget a step further by setting up different bank accounts for your specific savings goals so you can easily track your progress (you can keep track of everything in one place with your chosen budgeting app). You should usually have the following three accounts: a chequing account where your pay is deposited and used for other savings accounts or investments, a savings account for emergency savings, and another savings account for discretionary expenses.
A sinking fund is often used to save for large discretionary purchases like a trip, concert or a new appliance. The way to build a sinking fund is to have an idea of how much the discretionary expense (or expenses if you love both concerts and getaways) will cost you in total. From the total estimated cost, you can calculate how much you will need to save each week or month after you pay for essentials like your rent or mortgage, retirement savings, emergency fund contributions and so on.
A great way to grow your sinking fund is to use a high-interest savings account for your sinking fund. Try to find an account with a welcome bonus that will reward you for setting up recurring deposits, or at least that pays a high rate of interest so you can grow your sinking fund faster. Most regular savings accounts pay 1-2% interest, whereas high-interest savings accounts can pay 4-6% interest. Compare the best high-interest savings accounts to find the best option for you.
Always look for accounts with unlimited transactions and low or no monthly fees. Set up automatic monthly transfers from your main chequing account so you’ll always have money saved. If one of those accounts gets low, it means you need to cut back on spending until you rebuild your funds.
4. Take advantage of free events
Summer is primetime for free festivals, concerts, and events, so take the time to seek them out via local newspapers, radio, and online and plan for the coming months. There’s lots going on across the country for the summer, like street festivals and free admission to some provincial parks on weekdays. Check your provincial government’s official website for more details.
It’s also worth looking into any local attractions to see if they offer free or discounted admission on certain days. Alternatively, there are always free things to do such as going to the beach, hiking, or going for a bike ride.
5. Use a cash-back or rewards credit card
We all spend money year round, so why not maximize your rewards when you’re spending more in the summer, and earn a bit more money or experiences by using a cash-back or rewards credit card?
The best cash-back credit cards refund a small percentage of every dollar spent on the card, usually applied as a credit to your statement once a year or whenever you want to redeem (the particulars depend on the card).
Best for Flexible spending
based on spending $2,200/mo after $0 annual fee
- Earn rewards
0.5% – 10% / dollar spent
- Welcome bonus
$100
- Annual fee
$0
Perks of the Tangerine Money-Back Credit Card
Perks | Details | |
---|---|---|
Lounge access | Not included | You’ll gain complimentary passes to airport lounges. The number of passes and lounges you have access to will vary. |
Waived foreign transaction fees | Not included | A surcharge that credit card holders pay for purchases made in a foreign currency (typically 2.5%). |
Travel accident insurance | Not included | If you suffer a loss as a result of an accidental bodily injury sustained while occupying a common carrier, you are eligible for this coverage. |
Travel emergency medical | Not included | If you require urgent medical care while on a trip outside of your home province, you will be covered for any eligible medical expenses incurred. |
Car rental insurance | Not included | Credit card rental car insurance usually covers theft, loss and damage to your rental car in the case of an accidental collision. |
Trip cancellation | Not included | If you have to cancel your trip before it’s even started, your prepaid travel costs will be covered up to a maximum amount if the cause of cancellation is eligible for the insurance. |
Trip interruption | Not included | If your trip has to be cut short or is delayed after the scheduled departure date, you will be covered up to a maximum amount for an eligible cause of interruption or delay. |
Flight delay insurance | Not included | If your flight departure is delayed by a certain number of hours, you’ll be reimbursed a certain amount for necessary and reasonable expenses. |
Baggage loss insurance | Not included | If your checked bag cannot be located by a common carrier, you’ll be reimbursed for a portion of the replacement cost of lost personal property. |
Baggage delay insurance | Not included | If your checked bag is not delivered within a specified time upon your arrival, you’ll be reimbursed for the cost to replace essential items. |
Hotel/motel burglary | Not included | Provides protection, while you’re checked in, for your personal belongings when left unattended in your room up to a certain dollar amount. |
Mobile insurance | Not included | Reimburses a portion of your cell phone in the event it’s damaged or lost. Device coverage is limited to a certain period of time after purchasing with your credit card. |
Purchase assurance | Not included | Automatically protects new purchases by insuring them for 90 days from the date of purchase in the event of loss, theft or damage. |
Extended warranty | Not included | Either doubles the length of the item’s manufacturer’s warranty coverage or extends it by 1 year, whichever is less. |
Price protection | Not included | If, within a certain amount of time of purchasing an item, its price drops or you find an identical item offered for a lower retail price than what you paid, you will be reimbursed for the difference. |
Other perks
- Ratehub.ca’s 2023 Award Winner – Best No Fee Cash Back Credit Card
- Life’s back in session. Enjoy it with an extra 10% back.*
- Apply for a Tangerine Money-Back Credit Card by October 31, 2024 and earn an extra 10% back (up to $100) when you spend up to $1,000 in everyday purchases within your first 2 months.*
- Earn 2% Money-Back Rewards on purchases in two 2% Money-Back Categories of your choice, and 0.50% Money-Back Rewards on all other purchases.
- Earn extra rewards – have your Money-Back Rewards deposited into a Tangerine Savings Account, and get a 3rd 2% Money-Back Category.
- No limit on the amount of Money-Back Rewards you can earn.
- Change your 2% Money-Back Categories to suit your spending.
Ratehub’s take
While the Tangerine Money-Back Credit Card is a no annual fee card, what really sets it apart is the ability to customize your rewards. With this card, you can choose your own bonus categories (which will earn you a strong cash back rate of 2% per dollar spent). This is rare in the credit card market and means you can avoid being locked into a bonus category that you can’t take full advantage of, or that doesn’t align with your spending habits.
Pros
- Customizable bonus categories: Flexibility to pick up to three bonus categories to earn 2% cash back on (out of a total of 10 options), which is in sharp contrast to most other cards where you have fixed bonus categories that you have no control over. Users are also given the freedom to change the bonus categories at any time (changes will take up to 90 days to come into effect)
- High cash back earning rate: 2% cash back per dollar on bonus categories is one of the richest earn rates for a no-fee card, plus your rewards are unlimited and don’t have monthly or annual maximums
- Wide acceptance: Widely accepted almost everywhere including No Frills and Costco
- Additional cards at no cost: Free supplementary cards for authorized users
- Frequent cash back reimbursement: Cash back is refunded on a monthly basis, instead of the standard annual reimbursement
Cons
- Limited cash back for non-bonus categories: For all purchases that aren’t categorized under one of your chosen bonus categories, you’ll earn just 0.5% cash back
- Limited travel insurance and perks: No travel medical insurance or any substantial side perks
Eligibility requirements
Minimum credit score: 660
Minimum income: $12,000/yr
Interest rates
Purchase interest: 20.95%
Cash advance: 22.95%
Balance transfer: 22.95%
The Tangerine Money Back Credit Card is ideal for those looking for a card with no annual fee. With this card, you’ll earn an extra 10% back on up to $1,000 in everyday purchases within the first 2 months. Must apply by October 31, 2024.. After that, you’ll earn 2% cash back on all purchases within two categories of your choice (or three categories, if you deposit rewards into a Tangerine savings account) with no limit on how much you can earn. Other purchases earn cash back at a rate of 0.5%. Your cash back rewards are unlimited and paid monthly.
Compare all cash back credit cards to find the best card for you.
Best for Groceries & dining
based on spending $2,200/mo after $156 annual fee
- Earn rewards
1pt – 5pts / dollar spent
- Welcome bonus
15,000 points (a $150 value)
- Annual fee
$156
Perks of the American Express Cobalt® Card
Perks | Details | |
---|---|---|
Lounge access | Not included | You’ll gain complimentary passes to airport lounges. The number of passes and lounges you have access to will vary. |
Waived foreign transaction fees | Not included | A surcharge that credit card holders pay for purchases made in a foreign currency (typically 2.5%). |
Travel accident insurance | $250,000 | If you suffer a loss as a result of an accidental bodily injury sustained while occupying a common carrier, you are eligible for this coverage. |
Travel emergency medical | $5,000,000 for first 15 days (under 65) | If you require urgent medical care while on a trip outside of your home province, you will be covered for any eligible medical expenses incurred. |
Car rental insurance | MSRP of up to $85,000, for 48 days | Credit card rental car insurance usually covers theft, loss and damage to your rental car in the case of an accidental collision. |
Trip cancellation | Not included | If you have to cancel your trip before it’s even started, your prepaid travel costs will be covered up to a maximum amount if the cause of cancellation is eligible for the insurance. |
Trip interruption | Not included | If your trip has to be cut short or is delayed after the scheduled departure date, you will be covered up to a maximum amount for an eligible cause of interruption or delay. |
Flight delay insurance | $500; delays 4 hours or more | If your flight departure is delayed by a certain number of hours, you’ll be reimbursed a certain amount for necessary and reasonable expenses. |
Baggage loss insurance | $500 per trip for all persons | If your checked bag cannot be located by a common carrier, you’ll be reimbursed for a portion of the replacement cost of lost personal property. |
Baggage delay insurance | $500; delays 6 hours or more | If your checked bag is not delivered within a specified time upon your arrival, you’ll be reimbursed for the cost to replace essential items. |
Hotel/motel burglary | Included | Provides protection, while you’re checked in, for your personal belongings when left unattended in your room up to a certain dollar amount. |
Mobile insurance | Up to $1,000 for 90 days | Reimburses a portion of your cell phone in the event it’s damaged or lost. Device coverage is limited to a certain period of time after purchasing with your credit card. |
Purchase assurance | Up to $1,000 for 90 days | Automatically protects new purchases by insuring them for 90 days from the date of purchase in the event of loss, theft or damage. |
Extended warranty | Up to one additional year | Either doubles the length of the item’s manufacturer’s warranty coverage or extends it by 1 year, whichever is less. |
Price protection | Included | If, within a certain amount of time of purchasing an item, its price drops or you find an identical item offered for a lower retail price than what you paid, you will be reimbursed for the difference. |
Other perks
- In your first year as a new Cobalt Cardmember, you can earn 1,250 Membership Rewards® points for each monthly billing period in which you spend $750 in net purchases on your Card. This could add up to 15,000 points in a year. That’s up to $150 towards a weekend getaway or concert tickets
- Earn 5x the points on eligible eats and drinks in Canada, including groceries and food delivery. Spend cap applies.
- Earn 3X the points on eligible streaming subscriptions in Canada
- Earn 2X the points on eligible ride shares, transit & gas in Canada
- Earn 1 additional point on eligible hotel and car rental bookings via American Express Travel Online
- Earn 1X point for every $1 in Card purchases everywhere else
- Enjoy access to hotel bookings, a room upgrade (when available), 12pm check-in and late check-out (when available), and up to $100 USD hotel credit to use on amenities when charged to the room for a stay of 2 or more consecutive nights through The Hotel Collection from American Express Travel
- Transfer points 1:1 to several frequent flyer and other loyalty programs
- Cobalt Cardmembers receive regular Perks such as bonus reward offers and access to great events
- Access Front Of The Line® Amex Presale & Reserved Tickets to some of your favourite concerts and theatre performances and special offers and events curated for Cardmembers with Amex ExperiencesTM
- American Express is not responsible for maintaining or monitoring the accuracy of information on this website. For full details and current product information, click the Apply Now link. If you apply and get approved for an American Express Card, (I/we) may receive compensation from American Express, which can be in the form of monetary payment.
Ratehub’s take
The American Express Cobalt is one of Canada’s best travel credit cards. If you’re looking for a versatile credit card that rewards both everyday spending and travel, the American Express Cobalt is an ideal choice. Cardholders can enjoy strong travel insurance, a generous welcome offer, and flexible point redemption options.
Pros
- Exceptional point earning: 5x the points on eligible restaurant and food delivery, 3x the points on eligible streaming services, 2x the points on ride shares, transit and gas. The earning potential for restaurants and takeout is significantly higher than most other cards
- Flexible point redemption: Travelers can choose from three ways to use their points: points 1:1 to several valuable loyalty programs including Aeroplan, use the Fixed Points Program to simplify redemptions regardless of travel dates, or use points for statement credits at a rate of 1 point = 1 cent. Or, redeem Membership Rewards for travel, gift cards, merchandise, or purchases
- Exclusive access: Enjoy privileges such as Front of the Line Presale and Reserved tickets to concerts, theatre performances, movie screenings, culinary events, and other special offers
- Comprehensive travel insurance: Benefit from a strong travel insurance package, including up to $5,000,000 in travel emergency medical
- No additional fee for authorized users: Add authorized users for no extra cost (an average fee of $30-50 on other comparable cards)
Cons
- Monthly fee: A monthly fee of $12.99 (totalling an annual fee of $156, which is higher than most other rewards cards)
- Limited acceptance: American Express isn’t as widely accepted in Canada compared to Visa and Mastercard
- Travel insurance age limitations: The travel insurance package does not cover trip cancellation or medical coverage for cardholders over the age of 65
- Lack of airport lounge access: Frequent travellers may be disappointed as this card does not offer access to airport lounges
Eligibility requirements
Minimum credit score: 725
Minimum income: N/A
Interest rates
Purchase interest: 21.99%
Cash advance: 21.99%
Balance transfer: N/A
If you want to earn rewards points instead, to redeem on things like car rentals or flights, you’ll want to take a look at a rewards credit card like the American Express Cobalt Card (our pick for the best rewards credit card in Canada). This card gives you 5 points per $1 spent on restaurants, groceries and bars, 3 points per $1 spent on streaming, 2 points on ride shares, transit and gas, and 1 point on everything else. You have many choices for using your points, and you’re not limited to one booking site - so you can find the best deals for summer travel. Another appealing aspect of this card is the included travel insurance, which covers medical costs, trip delays and car rental collision expenses - and saves you the cost of buying insurance yourself.
The bottom line
When it comes to budgeting, there’s no such thing as too much preparation. Knowing how much you want to spend can help you plan a fun summer without going overboard - or over your account limit.
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