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As summer approaches, Finns are tightening their belts and rethinking their vacation budgets in response to rising living costs. According to a recent survey by LähiTapiola, the average summer vacation budget for Finns is €1,050, showing little change from two years ago. However, an increasing number of people are planning to spend significantly less.

The survey revealed a fourfold increase in the number of Finns planning to spend only €100 on their summer vacation, rising from 2% in 2022 to 8% in 2024.

Economist Hannu Nummiaro of LähiTapiola Varainhoito explains, “This stark rise highlights the impact of inflation on household finances. While people are spending the same amount in euros, the value of what they can purchase has decreased.”

Approximately 25% of respondents indicated they would spend less on their summer vacation this year compared to previous years. Food has overtaken domestic travel as the primary expense for many Finns, with 55% planning to spend on food compared to 40% two years ago. Conversely, domestic travel expenses have decreased from 53% to 47%.

Nummiaro notes, “The increase in spending on food suggests that people are looking for small indulgences during their vacations, particularly if larger travel plans are curtailed. This shift also reflects the ongoing economic strain and the need to balance budgets carefully.”

The survey found that residents of the Helsinki metropolitan area are likely to spend more on their vacations, with 15% planning to allocate over €2,000. This is twice the rate of other cities and three times that of rural areas.

The economic strain is evident, with Statistics Finland reporting a doubling of indebted households over the past two to three years. Additionally, around 15% of households feel their regular income is insufficient to cover living costs, leading many to cut back on vacation spending.

Economist's Tips for Stretching Summer Budgets

  1. Save for Vacation Dreams: Plan ahead and consider setting up a dedicated savings account for vacation funds.
  2. Create and Track a Budget: Outline major expenses and smaller costs, leaving room for surprises. Monitor spending during the vacation to stay within budget.
  3. Plan and Compare: Careful planning and comparing options can save money. Consider whether package deals or DIY travel arrangements are more cost-effective.
  4. Maintain Everyday Wisdom: Avoid impulse buys and allow room in the budget for small treats.
  5. Think Beyond Summer: Anticipate post-vacation expenses, such as back-to-school costs, and take advantage of summer sales for necessary purchases.

As Finns navigate the economic challenges of 2024, careful budgeting and planning are key to enjoying a fulfilling summer vacation without financial strain.

HT

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