A better (meaning debt-free) vacation next year It’s vacation time! Who doesn’t enjoy a week or two of fun away from the usual trials and tribulations of everyday life? But who wants to come home to a mountain of post-vacation bills? You’ve probably already taken or planned this year’s vacation and have either already paid for it–or not. Either way, here’s how to make next year’s vacation better and debt-free. Start saving now! When your vacation planning includes an ‘afford as you go’ strategy, you won’t face big, long-term, high-interest bills when you return. Where does this extra money come from? Well, it’s not actually ‘extra’ money–it’s money you already have but don’t realize it. The secret is to set it aside before it gets sucked into the costs of everyday living–and you to do that this easily … Paying yourself first! This is one of the best saving strategies there is – whether you’re saving for a holiday, retirement, or anything else. It’s this simple: Set aside a portion of your pay as soon as you get it. You won’t end up spending it and your vacation or (insert other financial dream here) nest egg will grow steadily. Simply save a fixed-dollar amount or percentage of your income each pay period. Choose an amount you can comfortably afford. Make sure your savings pay! Get your savings out of low-interest bank accounts and into higher-return investments, such as: • Money Market Mutual Funds that earn competitive returns are usually easily and quickly redeemed and may even allow chequing privileges. If your vacation will take you south, check out money market funds that allow you to save in U.S. dollars and reduce your exchange risk. • Guaranteed Investment Certificates (GICs) or Term Deposits when your vacation is a long way off and you can commit your cash for a longer term. Your cash is locked in for a fixed period but the interest rate is usually higher. • Government Savings Bonds are usually cashable at any time. You can only purchase them within a limited period each year but your employer may offer an automatic deduction program to purchase them. Save before your vacation to save on your vacation! You’ll reduce your vacation costs by paying cash for your travel tickets or using cash to take advantage of ‘last-minute’ travel bargains. You can also avoid after-vacation bills by purchasing traveller’s cheques before you leave or using automated teller machines during your holiday instead of a high-interest credit card (or two). Talk to me today about the best "pay yourself first strategy" for you–one that will not only reward you with a debt-free vacation but will also help you achieve all your other financial goals.
Posted on: Thu, 08 Aug 2013 17:21:40 +0000
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