HOW DO I SAVE FOR A DREAM VA­CA­TION?

THE AD­VISER SAYS…

Best Health - - ADVICE -

APLANNING AHEAD IS the key to suc­cess­fully bud­get­ing for a great get­away. Here are my top five tips that will make sav­ing – and spend­ing – work to your ad­van­tage.

HAVE A DED­I­CATED AC­COUNT

The first step is to set up a ded­i­cated sav­ings ac­count. By keep­ing it sep­a­rate from your chequing ac­count, you’ll be less tempted to spend your va­ca­tion money and you’ll al­ways know ex­actly how much you’ve saved so far.

MAKE AU­TO­MATIC PAY­MENTS

Once this ac­count is up and run­ning, set up reg­u­lar au­to­matic con­tri­bu­tions to grow your sav­ings. For sim­plic­ity, have the money trans­ferred to this ac­count on the same day that you get paid and you won’t even no­tice it leav­ing your chequing ac­count. Think about this: Sav­ing just $20 a week adds up to $1,040 over the course of a year!

GET A TRAVEL RE­WARDS CARD

A great way to save is to get a travel re­wards credit card. The big­gest way you can save with a travel card is by us­ing all the points that you build up while mak­ing ev­ery­day pur­chases to­ward your flights. How­ever, many of these cards also of­fer dis­counts on car rentals and ho­tels and come with travel in­sur­ance, which can fur­ther re­duce your va­ca­tion costs.

MIN­I­MIZE EX­CHANGE-RATE FEES

Buy for­eign cur­rency be­fore you ar­rive at your des­ti­na­tion. More likely than not, the ex­change rate you’ll pay near tourist at­trac­tions will be higher be­cause they know your op­tions are lim­ited.

Also, try to plan your spend­ing ahead of time so that you won’t buy more for­eign cur­rency than you need. If you do, you’ll end up los­ing by pay­ing ex­change-rate fees twice – once to buy for­eign cur­rency and then again to sell it back. You can avoid over­buy­ing for­eign cur­rency by us­ing your credit card while away. But make sure to phone your credit card com­pany be­fore you leave be­cause some credit cards charge higher rates than oth­ers.

EX­PLORE TAX-FREE OP­TIONS

If you like to shop, you’ll be happy to know that many coun­tries of­fer a sales tax re­bate for tourists. In European coun­tries, where the sales tax – value-added tax (VAT) – can be as high as 20 per­cent, these re­bates could save you a great deal.

In most cases, you’ll have to look for stores with “tax-free” dis­plays in their win­dows or by the cashier to make sure that they par­tic­i­pate in the pro­gram. When you make a pur­chase, ask the store em­ployee for the re­bate form. Fill out this form and bring it to the air­port, along with the re­ceipt and the item, be­fore head­ing back to Canada so that cus­toms can stamp it. Af­ter­ward, sim­ply mail the pack­age and col­lect your re­fund in a cou­ple of weeks. You might even be able to get your re­fund at the air­port, de­pend­ing on where you are. While it may take a lit­tle ex­tra work and time, it may be worth it if you’re try­ing to stretch ev­ery dol­lar.

JOR­DAN CAMPBELL, CFA,

is a fi­nan­cial ad­vi­sor as­so­ciate at Man­ulife Se­cu­ri­ties

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