Finns struggle with summer vacation debt, some repaying until 2025

A new survey by Bluestep Bank reveals that while most Finns stuck to their summer budgets in 2024, many are feeling the financial strain of their vacations. One in five Finns who took on debt to fund their summer holidays will still be paying it off

By: helsinkitimes.fi

Oct 07 2024
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Finns struggle with summer vac

A new survey by Bluestep Bank reveals that while most Finns stuck to their summer budgets in 2024, many are feeling the financial strain of their vacations. One in five Finns who took on debt to fund their summer holidays will still be paying it off well into 2025, according to the survey conducted by IRO Research.

The study found that 33% of respondents didn’t spend more than usual during their summer break, while nearly half (48%) used savings to cover holiday expenses.

Other common funding sources included salaries (39%) and holiday bonuses (35%). However, a small but significant portion of Finns relied on credit: 8% used credit cards, 2% took out bank loans, and 1% turned to payday loans.

For those who took on debt, 21% repaid it by the end of the summer, while 64% plan to settle their debt by the end of 2024. However, 16% expect to continue paying off their loans into spring 2025, and 4% said their repayments will extend beyond that.

The financial burden of summer vacations was felt most acutely among low-income households, with many relying on tax refunds, support from family, or loans. "In the income bracket earning less than €30,000 per year, summer vacations can cause significant financial instability," said Petri Matikainen, Bluestep Bank’s Country Manager for Finland. "A tenth of those who financed their holidays with loans were unsure when they’d be able to repay them, which poses a financial risk as interest on consumer loans accumulates over time."

In contrast, higher-income earners primarily funded their vacations through savings and salaries, highlighting the growing financial divide between income groups.

Despite the financial strain on some, the survey also found that most Finns were cautious with their spending. The difference between projected and actual spending during the summer fell within the survey’s margin of error. Notably, more Finns than expected reported spending no more than usual, with 36% stating they kept their holiday budget in check, up from 31% at the start of the summer.

"It was surprising to see that over a third of Finns didn’t increase their spending during the holidays. This level of frugality was more than we anticipated," Matikainen remarked.

For those who did spend more, nearly 40% of adults reported an additional outlay of €50 to €999, a moderate increase considering many were also covering vacation costs for their children.

The survey, commissioned by Bluestep Bank, involved 1,000 respondents across Finland, with a sample representing the national population in terms of age, gender, and region. Bluestep Bank, a Nordic institution focused on financial inclusion, specializes in offering loans to creditworthy individuals who may not qualify for traditional mortgages due to factors like irregular employment or past credit issues.