May I suggest a staycation for summer 2023?
A few news items caught my eye recently because they suggest a busy, expensive summer travel season. If you have the flexibility to avoid airports and hot tourist destinations in the months ahead by rescheduling to another time, give it some thought.
We vacationed in Eastern Canada in each of the past two summers and we could not have had a better time in all respects, including cost. But last week, I read a news story out of Halifax about how rebounding tourism in the Maritimes is pushing up the cost of visiting the region. Already, hotels in downtown Halifax are going for $300 a night.
Demand to travel is on the rise because of a feeling the pandemic is solidly behind us now. Will airports and airlines be ready for throngs of travellers? Globe and Mail transportation reporter Eric Atkins wrote last week about how airlines are expanding their schedules to meet demand, even amid concerns about labour shortages. Staffing issues last summer led to an epidemic of lineups, flight delays and lost luggage at some airports.
Despite high interest rates and persistent food inflation, Canadians are still willing to spend on travel. The latest Consumer Spending Tracker from RBC Economics says spending on goods is falling, while spending on discretionary services like travel and dining out is holding up. You can see the decline in spending on goods in the latest financial results for Canadian Tire.
RBC says the high cost of borrowing will eventually cause a pullback in non-essential spending, which suggests quieter airports and tame pricing in the tourism industry. For now, a booming summer travel season looms. Staycation, anyone?
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Rob’s personal finance reading list
The grocery rebate is peanuts
The grocery rebate announced by the federal government in its recent budget should be on the way in the next few weeks. Here’s a look at how the rebate works, and why it’s being criticized. The maximum rebate for an eligible household of two parents and two kids would be $467. Single people without kids will get a rebate of up to $234, while a senior will get $225 on average.
No more houses, no more cars
A fascinating list of things boomers did that younger generations are likely to dispense with. Many money-related entries on the list include home and car ownership. Also, handling cash and in-person banking. Plus, cruises, instant coffee and much more.
Five questions to ask your significant other before you combine your finances, including how much they have in savings and debt. If you do combine your finances, that is. I know some couples keep their accounts separate. Whatever works for you.
Stay active, save on insurance
How you can save money on insurance, and receive other benefits, by allowing your life insurer company to monitor your level of physical activity and other health-related habits.
Q: I am a retired 58-year-old who has a defined benefit pension paying a small amount per month covering most expenses. My question is whether it would be better to leave my registered retirement savings account alone for now, or convert it to a registered retirement income fund.
A: A RRIF requires mandatory, taxable minimum withdrawals each year, which many people find intrusive. That said, there are some benefits to converting an RRSP to a RRIF before the deadline, which is the end of the year in which you turn 71.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
A When Should I Start CPP calculator – find out whether it could make sense to delay your CPP retirement benefits to as late as 70 in order to take advantage of higher payouts.
The money-free zone
Introducing Connie Converse, sometimes called the female Bob Dylan. She was part of the New York folk scene in the 1950s, then gave up performing. Here’s one of her signature songs, How Sad, How Lovely.
From the Twitterverse
A thread on housing affordability that starts with this statement: “Canada is failing an entire generation.”
What I’ve been writing about
- A risk analysis for investors who hold cash and hate surprises
- Buying our first home in 1992 was easy compared with what young people face today
- Why you likely won’t get the maximum CPP retirement benefit
More Rob Carrick and money coverage
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Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Why millennials and Gen Z are Alberta-bound for a more affordable life • Rising interest rates brought pain for new homeowners - and opportunity for house hunters • Why more Canadians are choosing to be childfree or delay parenthood • Love in the time of inflation: How to manage rising costs when dating • You're not bad at money - you're suffering from money shame • Retirement might look different for Gen Z and millennials. Here's how to plan for it • Recession-beating tips for the job market, housing, investing and the cost of life • Is the middle class dead for millennials and Gen Z?
- ✔️ The housing file: A house isn't special. Get your head straight about the reality of home ownership • The good, the sad and the unaffordable: Saving for a home downpayment in Canada's big cities • Property taxes are popping in some cities - how worried should you be about other tax hikes? • Our other real-estate problem - people have too much wealth tied up in houses • Borrowers and savers, here's how to time the eventual rollback of interest rates
- 📈 Investing: Canada's top digital broker is TD Direct Investing, with an assist from the TD Easy Trade app • 2023 Globe and Mail ETF buyer's guide part one: Canadian equity ETFs • For the ultimate in cheap investing, check out the Freedom .08 ETF Portfolio • Yes, there is risk in Canadian bank deposits for the unwary and complacent • CDIC covers bank deposits, but who protects your investments if your broker goes bust? • Answers to your questions about the low-risk ETF paying almost 5% • Happy fifth birthday to one of the all-time best investing products for everyday people • An investing strategy that wins cleanly over the long term by outperforming in bad years like 2022
- 💰 Your money: Mortgage holders, savers and GIC investors, it’s time to change your thinking on interest rates • How much debt is each generation of Canadians carrying, and how do you compare? • For the sake of their financial futures, young people should leave Toronto and Vancouver • This practical new spin on a savings account might just peel you away from your big bank • Rental fraud grows amid rise in fake, falsified tenant applications • Are Canadians worse off financially now than in the 1980s? • From groceries to auto loans, here’s how much more it costs to live right now • When saving for retirement, should you change your asset mix over the course of your career? • Do retirement income needs always rise alongside inflation? Not necessarily • When the bank suggests you lock in your variable rate mortgage, it has an angle