Affording that much-needed vacation may require some financial adjustments
Many people are getting the urge to travel again as countries reopen and relax their COVID-19 restrictions.
Even if travelling wasn't something you did before the pandemic, two years at home is more than enough time to give anyone the travel bug.
But before you spend hours surfing travel websites and researching where you want to go, review your finances. It may feel less spontaneous than simply booking a last-minute special, but ensuring you can afford to fit your dreams into your budget without accumulating credit-card bills will help prevent buyer's remorse.
Maybe you're one of the fortunate ones who can count on receiving a sizable tax refund.
If you don't need the money to catch up on other bills ... great. Put it in your travel fund and use it guilt-free. If you aren't so lucky, then it's a good idea to start reviewing your monthly budget to determine what you can afford to save toward a vacation. Planning your vacation spending mindfully helps avoid struggling to repay unplanned credit-card bills when you get home. If your budget feels too tight to fit anything extra in, start tracking where your money is going.
We can often control impulsive or unnecessary expenses better when we pay more attention to our daily spending. For example, it may not seem like much at the time, but a daily stop for coffee or lunch adds up. Do the math: spending $10 per working day on lunch out adds up to approximately $200 a month. Over the course of a year, that amounts to $2,400, which can go a long way toward paying for a week at an all-inclusive beach resort.
But what if you have reviewed your budget and, with the increase in living costs, you are barely making ends meet as it is?
The next step would be to review what those costs are and if they can be cut back. Some twocar families have found since COVID-19, and the transition to working from home at least part of the time, that they no longer need a second vehicle and the associated expenses. It may take some schedule coordination to work with just one vehicle, so focus on why you're jumping through those hoops. The savings you create by having only one car could free up enough money to balance your budget or cover that tropical getaway.
If the cost of fuel is hurting your budget, consider trading in your vehicle for something more fuel efficient or improve your driving habits to save more at the pump. If that's not feasible, consider other ways to reduce your transportation costs.
Maybe a co-worker lives nearby and is willing to carpool. Public transportation might not be as convenient, but it is much cheaper than operating a vehicle.
It also never hurts to review your cable, cellphone and internet bills to ensure you are not paying for features you don't use. Streaming services can be much cheaper than cable, but subscribing to several at a time adds up. If you have several cellphone users in your household, explore changing to a family plan that has lower costs and allows you to share data. Inform your kids about the cost of using data when Wi-fi is not available to further save on that cellphone bill.
Home and private auto insurance (where permitted) can also be reduced by shopping around for the best price. Some provinces offer lower insurance costs on vehicles that are not driven daily or for drivers who have a good driving record.
If the rising cost of groceries has put a strain on your budget, some savvy shopping can help reduce costs. That doesn't mean driving all over town to save
$2 on a block of cheese; it means knowing where to do your overall shop. Bigger chain stores are often able to offer lower prices than smaller, local stores that can't pass on significant volume discounts. Also, the more meals you can prepare from scratch without expensive pre-packaged foods, the more you will save.
You may find that eliminating processed foods has a positive impact on your health as well as your bank account.
If you've done all these things and still find that a vacation is financially out of reach, don't automatically turn to credit to make your dream come true.
Look at staycations, home swaps with friends or family, or taking on a side job to create the necessary room in your budget.
For some great ideas on how to make extra money on the side, check out 65 Side Hustles, one of many free, educational webinars offered on the mymoneycoach.ca website.
If your goal is to save $200 per month over the course of a year toward a vacation, break it down to earning an extra
$46 per week to achieve it.
Taking small steps can add up to help you take a big step away from your day-to-day routine.