Summer has finally arrived and you and your family are trying to figure out how to get away for a week or two without breaking your bank account and getting into debt that could last you until next summer.
According to the Allianz Travel Insurance Vacation Confidence Index in 2017, Americans increased their spending an average of 12.5 per cent on their vacation from the previous year. Millennials (18-24) will spend $1,373. Baby Boomers (55-plus) will spend $1,865 and Generation Xers (35-54) average $2,628.
To some, a few thousand dollars may not seem like a lot. However, to my clients and most people we know, a couple of thousand dollars or more represents a lot of money. That is money they have worked many hours to make and save for their time off.
So, before you make your hotel reservations, flight arrangements and choose the style of rental car, here are some smart ways to save money from a trained financial advisor:
- Open a vacation bank account: If you want to save money and not dip into it or lose track of it when you deposit in your main account, then open a vacation-only savings account. You can drop a percentage of your paychecks in it each month and then, when vacation arrives, you can transfer the money into your main account to use for vacation.
- Figure out how much you want to spend: Don’t just go on vacation willy-nilly. That is a formula for disaster. Choose, perhaps, 5% of your estimated net household income, then keep that number as your goal.
- Stop going out to eat: You can easily spend $10-$20 a day by eating lunch out at work. So, stop doing it. Pack your lunch at home. You could save $100 a week or more. You could even deposit money you would have spent for lunch into your vacation bank account!
- Stop buying coffee out: Fufu coffee drinks are retailing for $4.00 and up now. (Some as high at $6.50.) If you bought it five days a week, you could be dropping $20.00 a week. What a waste. Instead, brew your coffee at home which costs about $0.15 cents a cup and take it to work. You will save hundreds of dollars in a year and you could transfer that savings to your vacation account.
- Get a second job: You and your spouse are working a regular, forty-hour a week job. That’s good but most of that is going to pay your monthly expenses. Then, get a side job. You can be an expert at it or a novice. Dog sit in your neighborhood, turn your car into a weekend taxi, wash cars or rent out a room in your home. The list is truly endless. The money you make may may fund your entire vacation!
- Sell some of your property: Tired of all the coats packing your closet? Is the golf bag, you never used, sitting in a corner gathering dust? eBay is waiting for you to sell it! Do an inventory of all that you no longer want and put it online. You could make some serious coin and clean out the clutter in your home at the same time.
- Get a travel credit card: Lastly, I don’t normally tell people to get credit cards but there are a number of excellent travel credit cards out there where you can accumulate points you can use for flights, hotels, rentals and vacation packages. Check on their benefits and apply. You may be ale to use them for your trip and pay the entire amount back with the money you saved and made before the trip.
As a financial advisor, I love to see my clients make and save money. Their financial security and success is something I, and my firm, take very seriously. Vacations should be no different. Foolish planning and spending can come back to hurt them in the future. So, plan smartly and safely.
A.K. Burton, PC, which serves the Washington,D.C. and Bethesda, Md area, has experienced and licensed individual financial advisors who can help you with any questions you have on the on saving for your vacation and any other personal or business financial matters. Contact us at (301) 365-1974 for more information or email us at firstname.lastname@example.org.