Are you dreaming of sipping a cool drink at an all-inclusive resort, or taking a long-weekend road trip across the border? For many Canadians who struggle to save, a vacation may seem out of reach this year. But you may be surprised at what you can afford with some careful planning and time on your side.
“There are simple things you can do now, like following a budget and cutting back on discretionary spending, to be able to find the money to set aside for a well-deserved holiday,” says Raymond Chun, a senior vice president at TD Canada Trust. “Consider that if you start saving now and put away just $40 a week, you could have almost $500 in three months and $1,000 in six months to put towards a vacation.”
Chun offers his advice on how to start saving now for your getaway:
1. Make a plan—Decide where you want to go, estimate how much it will cost, and figure out exactly how much you need to save each week to get there.
2. Employ the “out of sight, out of mind” strategy—Set up a separate savings account for your vacation fund and arrange a weekly automatic transfer of a set amount into the fund every pay day. Ensure your debit card isn’t connected to your vacation fund, so you won’t be tempted in a moment of weakness.
3. Avoid unnecessary spending—Saving for a vacation should not disrupt saving for other financial goals and expenses like paying existing debts or putting away money for a down payment on a home. Instead, look at small ways to cut down on unnecessary expenses; cook at home instead of going out and rent a movie instead of going to the theatre.
4. Get your family involved—Encourage your kids to make small, regular deposits to your vacation fund. If you give them an allowance, ask them to save some of it for your next vacation. This way they’ll have their own spending money for souvenirs.
5. Take advantage of travel rewards—If you’re looking to reduce some of your vacation costs but not sure where to start, consider redeeming your travel rewards points from your credit card.