Top tips on saving for your tropical vacation from a Financial Expert
We know that budgeting for a vacation can sometimes raise questions. Should you hold out for an amazing last-minute deal or start saving months in advance when planning for that vacation with the whole family or luxurious getaway?
That’s why we sat down with financial expert Silvi Pukitis from KOHO (a Canadian smart spending account with no fees) to get her top tips and best practices for making the most of your travel budget.
The earlier you start saving, the easier it will be and the less you’ll have to save per month. For example, if you need to save $2,000 for a vacation to Tobago in two months, you’ll need to put away $1,000 per month – which might not be an easy feat with everyday expenses! Ideally, you’ll want give yourself as much lead time as possible to help set a realistic monthly savings plan. While it may feel silly to start saving before you have a specific vacation planned, it can also be really helpful and give you freedom to travel when you want to.
If you know roughly how much you expect to spend on vacation next year, try stashing away a little bit of savings each month starting today. Another great way to save is if you receive an annual bonus at work or commissions at work, it’s a great idea to set aside that money for next year’s vacation!
A savings account with a decent interest rate is your best bet. Try to find a savings account earning at least 1.5% interest which you can easily access when it comes time to pay for your vacation. If you don’t have a good savings account, look into getting one! However, if your vacation is coming up in a few months, you’ll only earn a few dollars of interest in a savings account anyways so a chequing account may also do the trick. Investment accounts are meant for longer-term savings of three years and up, so you’re not going to want to keep your short-term travel funds in there.
One major myth is that budgeting needs to be restricting and complicated. No matter how motivated you are, there are things in life that are out of your control that simply can’t be accounted for in a budget. Simplicity is key – don’t set your sights super high on your first go, you’ll only overwhelm yourself. If you’re building a travel fund, start small with whatever you can afford then begin raising that amount little by little. The great thing about all inclusive vacations is that there’s a package for every budget – whether you want to get the most bang for your buck or go all-out on a luxury suite with butler service.
It really depends on how travel stacks up amongst your other life priorities. Financial gurus often say that 3-6% of your after-tax income is a good travel budget – but, of course, it all comes down to personal preference. It’s best to look at your priorities and determine what amount you can comfortably afford to spend on travel without compromising your financial health.
One of the great things about all inclusive vacations is that everything is included in one package – including flights, baggage fees, meals, drinks and your hotel stay – so once you’ve set your budget, you don’t have to stress about blowing it while you’re away. Plus, Sunwing offers plenty of resorts with included extras that can help you take your budget even further – like unique resort-offered activities, on-site water parks, complimentary green fees and special pricing for kids and teens.