Try this recipe for vacation savings
Toronto author Gordon Stein combined his mechanical engineering degree, his experience working in sales, marketing and operations, and a love of helping others to write the new book Cashflow Cookbook.
Stein calls it “simple, fun and very approachable” — 60 financial “recipes” that, he says, can add up to $2 million in wealth if applied together over 10 years. But “you can skip parts of it — let’s say you don’t own a car, so you can just skip that section,” he says. “It’s like a cookbook as in you don’t have to read it cover to cover.”
In honour of the start of Spring Break, Stein gave us his recipe for vacation savings.
If you are in the habit of enjoying a nice annual vacation that adds to your debt load and sinks you deeper in the hole, you may want to do some “staycations” for a year or two while getting your finances in order, free up some cash flow and clear out some debt.
If you can enjoy a regular vacation while continuing to grow your net worth each year, then by all means continue to do so. But let’s see if we can plate up some ways to do it more economically, without taking away any of the fun.
Points: Use one travel reward card for all work and personal spending. Hotels: Look at Airbnb, Tripadvisor and Trivago for independent hotels; and hotels.com, Priceline and Hotwire for best deals on the majors.
Airfare: Fly midweek vs. weekends, book well in advance.
Timing: Travel just outside peak seasons for that area; if you are flexible, look at last-minute travel sites like lastminute.com.
Shuttles: Check for free shuttles from airport to hotels, city centre vs. paying for cabs.
Food: Buy some basic groceries for the hotel fridge to save on eating out for every meal and snack, or consider renting a condo or hotel with a kitchen so you can make most of your own meals.
Hearty Serving (advice for a larger family)
Family of five, annual vacation
Fly midweek to bring air tickets from $7,500 to $6,300 Book Airbnb apartment, taking lodging from $2,800 to $1,600
Reduce total cost by $600 by saving travel reward points Original air and lodging $10,300; new cost $7,300 Annual savings $3,000; monthly savings $250
Light Serving (advice for a smaller family or single)
Single person Original one-week all-inclusive package $3,100 Move trip just outside prime season, pay only $2,500 Reduce total cost by $300 by saving travel reward points Original trip $3,100, new cost $2,200
Annual savings $900, monthly savings $75
Yield (what the savings would mean over time, if they were invested with a 7 per cent return)
Hearty: $43,250 over 10 years, $130,250 over 20 years Light: $12,975 over 10 years, $39,075 over 20 years
One ingredient for vacation savings is being smart with airfare: Fly midweek vs. weekends, and book well in advance, Gordon Stein suggests.
Gordon stein is the author of Cashflow Cookbook.