A quarter of a million will take a holiday with borrowed money

Despite the fact that Norwegians on average want to cut this year’s holiday budget by a quarter, a small minority of 7 per cent plan to go on holiday on credit.

This corresponds to 244,000 Norwegians who, in a survey by Respons Analyse, say that they may or certainly will take a holiday with borrowed money this summer. The survey was conducted in May on behalf of SpareBank 1.

“This tells us that we have gained a habit in a segment in Norway that finances the holiday with credit. We know them. Otherwise, the trend during corona is that consumers take out smaller consumer loans and have less credit debt than normal. They are connected with the fact that we are slowing down a bit,” says Jorge Jørgensen, director of finance at the Consumer Council, to NTB.

Spending less
The survey shows that Norwegians, on average, plan to spend 12,375 kroner on holiday. This is a decrease of 26 per cent from last year. Consumer economist Magne Gundersen at SpareBank 1 sees a clear connection with the corona crisis and that most people follow the authorities’ travel advice and are staying in Norway.

“We have seen over the years that those who travel abroad in the summer on average have two to three times greater holiday expenses compared to those who are only in Norway. It is therefore quite possible to spend the summer here at home for a reasonable price. The holiday money, which most people receive in June, should be sufficient to have a nice holiday without having to get into debt,” says Gundersen.

Good with the money
According to the Consumer Council, Norwegians’ consumption patterns through the corona crisis have shown that the vast majority have been good with money and slowed down their spending. The debt register shows, for example, a subdued growth in consumer loans and a reduction in households’ unsecured debt burden. In the last three months, unsecured debt has been reduced from 166.5 billion in April to 158 billion as of 10 July.

“When 7 per cent say they want to loan finance their holiday, it is not really such a high number when we take into account that there are 400,000-500,000 unemployed. We feared it would get worse, but Norwegian consumers have adapted their credit consumption, more or less voluntarily,” says Jorge Jørgensen.

He points out that there is a lot of social pressure associated with having a holiday.

“Parents are very careful that their children are not the only ones in the class who have not been to an exciting destination around the Mediterranean. Now the corona crisis may have eased the pressure to go there. The Norwegian holiday will not necessarily be cheap,” says Jørgensen.

Control of large expenses
Consumer economist Magne Gundersen has the following advice for reducing the holiday budget.

“It is to have control over the big expenses: Accommodation, food and travel. It is almost free to go to the family cabin, visit family and friends or to camp in a tent or hammock. Food expenses will be low if you make most of the meals yourself and make a packed lunch for the trip and excursions and in the amusement park. And you keep travel expenses in check by traveling short and filling up the car with the whole family on the longer trips,” says Gundersen.

© NTB Scanpix / #Norway Today