How does a sandy beach view with a yummy Mai Tai in-hand strike your fancy? Not your style? What about an African safari adventure, tracking giraffe, zebra, and elephant? Two weeks of paradise can be bliss but the truth is that for many of us, we need to save for these big ticket expenses all year round in order keep a balanced budget. The good news is a little work every month can mean a fun payoff come vacation time.
Here’s my 7 step guide on vacation planning without breaking the bank or wreaking havoc on your budget, or worse—throwing it entirely out the window.
1. Estimate the cost of your vacation
The first step to plan a trip right is estimate how much your dream vacation will cost you. Do your research! Talk to friends, look at reviews, visit different vacation websites and compare shop. You need to get a realistic idea of the total cost of this vacation after all the bells and whistles have been taken into account, like cab fares, departure taxes, meals, and souvenirs.
2. Estimate how much time you’ve got
Step two is divide the total price by the number of months you have between now and your vacation. So let’s say, for example, a one week all-inclusive trip to Cuba will cost you $1,200 total and you plan on taking that vacation in one year’s time. Simply divide $1,200 by 12 and this gives you the total amount of travel budget you need to set aside every month and put into a savings account. Using our example, if you save $100 every month the full trip will be paid for by the time you’re ready to pack your bags.
3.Work it into your budget
You need to make sure your summer vacation savings fit well with your current income and expenses. Try filling out a monthly budget worksheet yourself, or if you need some help call Credit Canada toll free at 1.800.267.2272 to set up a free appointment with a certified credit counsellor. They will look at your entire financial story, including your financial goals (like a vacation), and help you build travel on a budget that works for you.
4.Readjust your expectations
If the amount of money you need to save every month is just too high given your current situation, you may need to either adjust your destination or your timeline. You could choose a more modest destination, or think of creative ways to cut your costs, such as sharing a room with a friend or looking for a cheaper hotel. Or you could give yourself more time to save by pushing the big dream trip by a few months. For example, a vacation every two years means the total cost gets divided by 24, which means a smaller and hopefully more manageable sum will need to be saved regularly.
5.Have a daily reminder of why you’re saving
When I was budgeting for a trip to Mexico a few years back, I put a taco magnet on my fridge to remind me of what I was saving for every month. I’m happy to say that I was able to achieve my financial goal and was able to enjoy real Mexican tacos as planned.
6.Write down your financial goals
Writing down your financial goals makes them more real, which can help keep you motivated all year long. Soon enough, putting vacation savings aside will become habitual and you won’t even think twice about it.
7.Pay yourself first
If willpower is something you struggle with consider setting up an Automatic Savings Program (ASP) with your bank. For example, you can set up auto payments from your chequing account to your vacation savings account on the first of every month. Paying yourself first means you won’t accidentally spend that $100 meant for Spain on takeout food or shoes.
Budgeting for your financial goals is key. This is equally true when saving for a down payment on a home, that new designer jacket you’ve been eyeing, a new smartphone, or that trip to San Francisco. And for those of you still wondering, I’ve replaced the taco magnet on my fridge with an image of the Parthenon. Even during the cold days of winter it’s kept me looking ahead and excited for my next highly budget-friendly vacation. And if I can do it I know you can, too!
Frequently Asked Questions
Have a question? We are here to help.
What is a Debt Consolidation Program?
A Debt Consolidation Program (DCP) is an arrangement made between your creditors and a non-profit credit counselling agency. Working with a reputable, non-profit credit counselling agency means a certified Credit Counsellor will negotiate with your creditors on your behalf to drop the interest on your unsecured debts, while also rounding up all your unsecured debts into a single, lower monthly payment. In Canada’s provinces, such as Ontario, these debt payment programs lead to faster debt relief!
Can I enter a Debt Consolidation Program with bad credit?
Yes, you can sign up for a DCP even if you have bad credit. Your credit score will not impact your ability to get debt help through a DCP. Bad credit can, however, impact your ability to get a debt consolidation loan.
Do I have to give up my credit cards in a Debt Consolidation Program?
Will Debt Consolidation hurt my credit score?
Most people entering a DCP already have a low credit score. While a DCP could lower your credit score at first, in the long run, if you keep up with the program and make your monthly payments on time as agreed, your credit score will eventually improve.
Can you get out of a Debt Consolidation Program?
Anyone who signs up for a DCP must sign an agreement; however, it's completely voluntary and any time a client wants to leave the Program they can. Once a client has left the Program, they will have to deal with their creditors and collectors directly, and if their Counsellor negotiated interest relief and lower monthly payments, in most cases, these would no longer be an option for the client.
