Summer is here and you might be considering a family trip or a romantic getaway. If you’re like a lot of Canadians, you might be relying on borrowed money to pay for some of it. Last year a TD Canada Trust poll showed that of the 90 percent of Canadians planning to take a summer vacation, 49 percent did not have enough to cover the costs and 14 percent hadn’t saved anything, using their credit card instead.
This method is financial sabotage — sure, you spend days looking for the best flight deals and vacation packages, but you still lose money by accumulating interest on your credit card. It doesn’t have to be like that. If you start planning your summer holiday now, you’ll be able to afford a vacay, debt-free.
Here are tips to get you started:
1. Make a budget
Write down what you think the whole vacation will cost — and be realistic. Don’t leave out things like food, shopping, activities, transportation and airport expenses — all those little things that add up.
2. Start saving
Set up a separate savings account specifically for your summer vacation then start making automatic deposits into it.
3. Make weekly contributions
While it’s tempting to make monthly contributions to your summer savings account, try doing it weekly to save more faster. You’ll likely prioritize your saving rather than weekly expenses like movie night or dinner out.
4. Cut your spending on other things
It’s essential to really make saving for your vacation a top priority. This means you’ll need to make sacrifices in other areas of your spending. Dinners or lunches out? Fancy coffees? Those summer shoes you’ve been eyeing? Before you buy anything, ask yourself if it’s really worth it. That $10 breakfast-to-go could be better spent on a meal out on your holiday instead!
5. Is Thailand really your only option?
We’d all love to jet off to far off destinations, but is it really worth sinking into debt over? Consider a cheaper destination if a bigger trip isn’t realistic this year. Be flexible and opt for something more affordable.
6. Look for special offers
If you do your research and dig around, you could find all kinds of special promotions that include free kids accommodation or activities you don’t have to pay extra for.
7. Plan your meals
Eating out can be a huge expense on holiday. Think about booking accommodation that has a kitchen so you can cook your own meals and save on the high cost of restaurants. And where possible, tote your own snacks and drinks.
8. Check your rewards
Credit card reward programs can also cut the cost of your summer vacation. Even if you haven’t racked up enough rewards for a whole flight, you could use them to cover some of the cost of renting a car or your hotel. If you’re travelling outside of the country, check and see if you have free insurance coverage on your health or car rental.