You work hard every day. You take care of your family. You take care of your home. You may even take care of your parents. You meet all of your obligations, and you pay your bills on time. And you are desperately in need of a holiday. Is a little vacation each summer too much to ask? It is if you can’t afford to pay for it!
- The Bank of Canada reports that Canadian household debt actually eclipses our country’s GDP, with the average Canadian holding over $20,000 in non-mortgage consumer debt. Canadian financial planners generally agree that taking on debt to finance a vacation is not prudent. So, how can you save for a trip away in advance, and avoid that enormous credit card bill at the end of your holiday?
- The first thing you need to do is open a savings account meant solely for vacation savings. Try to find something that is a little difficult to get at and also carries a healthy interest rate. Don’t just settle for your bank – shop around. Many people find that if they need to call an investment advisor to make a withdrawal, they are far less likely to do that impulsively. Allocate part of every paycheck to go automatically to this savings vehicle. As they say, pay yourself first.
- Begin to do research on the destination of your choice and find out what your budget will be. Research airfare, hotels, meals, gas, spending money, admissions, etc. Also consider if you’ll need to purchase new luggage or clothing for your trip. The more detail you put into your budget, the more likely you are to remain within it.
- Post a photo of your vacation destination in a conspicuous place in your home, as a reminder of what you are sacrificing for. Even put a small picture in your wallet that you will see any time you go to spend money.
- Consider a travel-related credit card that gets you frequent flier miles, but only if you are really good with a credit card. This option doesn’t work if you are going to be tempted to overspend!
To save up money even quicker, try these tips to generate income or avoid unnecessary spending:
- Many travellers use the “change jar” system, throwing loose change into a large jar every time they come home. All of those coins can add up over a few months to hundreds of dollars. Add these funds to you vacation account!
- Stop eating out. Restaurant meals will always cost you much more than eating at home. If you are too tired to cook, frozen dishes and ready-made deli items are a cheaper choice. And sandwiches for dinner once in a while won’t kill anyone!
- Most families have far more food in their cupboards than they realize. For one week each month, only buy perishable food from the grocery store. Otherwise, dig to the back of the pantry (or bottom of the freezer) and use what you already have.
- Sell unwanted items on eBay, Kijiji or Craigslist. Take clothing you no longer want to a consignment store. Just make sure the money goes directly to the travel account. We all need a little time away every now and then. By preparing ahead of time and making sure that you have the money set aside, your post-vacation glow will be sure to last a little bit longer!