With the magical late arrival of the summer weather, sunscreen, hats and sunglasses have resumed their main role in our daily lives. Maybe you didn’t know it, but you have to be careful with sunglasses. These have a superpower, both pleasant, but potentially dangerous: they make us see life in pink.
Haven’t you already felt this intoxication at the dawn of the beautiful summer days or your holidays, the one that gives you a feeling of lightness and freedom such that it quickly makes you forget your financial and budgetary objectives? This is quite natural. Humans look for situations that promote the release of endorphins. For Quebecers, the ecstasy of sunny days is, in my opinion, amplified by the long winters and the lack of sunshine. We are climate-resilient, but we are therefore more reward-prone because “we deserve it,” right?
Since the holiday season is upon us, it seems wise to me to think for a moment about the potential dangers of sunglasses on our personal finances.
You are your worst enemy
Unfortunately, a budget cannot be useful if it is based on merit, compensation, joy or sadness. It is said that the more intense the emotions, the weaker the intelligence. So, let’s be clear: it is much easier to prepare this financial document than to follow it. Whether you’ve had a budget for a long time, or whether you’ve decided to do it this year for the first time, the same trap awaits you at the dawn of the holidays: that of getting carried away by the sweet madness that the heat wave brings. .
With this trap in mind, you would certainly benefit from bringing out this famous budget to make an analysis allowing you to see where you really are in terms of income and expenses. This will allow you to calculate if you have room for maneuver for the upcoming summer period or if your expenses to date are already greater than planned. These observations should guide you in your plans for the summer by allowing you to adjust your spending items devoted to summer pleasures such as restaurants, vacations, outings with the children.
By performing this exercise before the start of your vacation, with a cool head, you will give yourself every chance of achieving your goals. You can also take the time to discuss as a couple and/or family the priorities you may have to establish this summer with the rising cost of living. Otherwise, the chances that your summer expenses will be higher than anticipated, since guided by the joy of the moment and a brain intoxicated by a desire for freedom and enjoyment, are much higher.
Comparison is no
The comparison, never winning, is even less so in terms of finances. Each individual, each family, each couple lives their own reality which is characterized by a system of values and a more or less emotional relationship with money. The vacation period, for many, is a source of unhealthy comparisons. In this era where the very real third dimension rubs shoulders with the parallel universe of social media, you will always feel like you have to consume more to impress the gallery. Living your “best life” can be expensive when you don’t really have the financial means.
The holiday budget for some is more generous, for others it is more limited. But don’t forget what the posts of people who seem so happy to travel, to be well dressed or to organize incredible activities for their children hide: the balance of their credit card. The danger of comparison is that you will certainly underestimate the proportion of individuals whose lives seem so full, but who must deal with an unenviable financial situation.
Canadian households are increasingly indebted. They are said to be “resilient”, which actually makes my ears curl. Because this increase in funding to assume an increasingly large share of the cost of personal living will sooner or later mean a reduction in savings for retirement and a deterioration in the financial security of these households.
It is natural that the current economic context and inflation issues may give you the impression that the challenge of balancing pleasure and managing finances is greater this year. Some choices might be more difficult, but remember that, despite all the cognitive biases that influence our financial decisions, you are the only master of your finances.
Getting to know yourself allows you to make more conscious and structured financial choices. Above all, it helps to remain rational, even once the sunglasses are on…