q holiday: HOW TO SAVE $5000
How to save $5k for a local getaway After a challenging year in 2020, a local getaway is just we all – and Australia’s economy – can benefit from right now. And with some savvy saving and careful planning, a $5,000 holiday can easily be within your reach! I really believe that holidays are not just a luxury, but an important way for the family to unwind and reconnect, especially after the pandemic-induced chaos this year has thrown at us all.
Here are some easy ways to quickly save up some dollars to make that dream getaway a reality:
1. Set your budget
“Save money” is a really vague goal, much like “lose weight” or “eat healthier”. Knowing what you're working towards helps keep you disciplined and focused on hitting that magic number. The alternative is “wait and see how much I have to play with at the time”, which often leads to disappointment when you realise you haven't saved as much as you had hoped. My book On Your Own Two Feet has lots of practical tips on how to set a budget and develop better money habits.
2. Book ahead
Many hotels, tours, activities, flights, car and equipment rentals etc. offer discounts on advanced bookings. So why pay more for exactly the same things, when all it takes is a little bit of organisation and planning ahead! If those savings average 10%, that's $500 you've knocked off the price of a $5,000 getaway. Some businesses hard-hit by COVID may even offer bigger discounts as an incentive to get customers back in, saving you even more.
3. Bank your savings
Many people are still working from home most or all of the time since COVID first hit, meaning we're saving money on commuting to work, buying lunches and coffees, and after work drinks. But are you actually banking those savings or frittering them away on other things? These easily add up to around $100/week. Look at what you're now using more at home and how you can cut down those costs. Open windows instead of running the airconditioner. Put on more clothes instead of turning on the heater. Turn off appliances you're not using and put your computer on sleep mode when you walk away from your desk. Even a couple of dollars saved each day quickly adds up.
4. Old-fashioned DIY
COVID lockdowns forced people to be more self-sufficient. And you can make substantial savings by keeping this do-it-yourself mindset. Cutting the kids' hair yourself saves around $20 a head every 6-8 weeks. Grooming the family dog yourself could save another $80 over the same period. Buying groceries and picking up other essentials yourself instead of having them delivered can save another $10 to $20 each time.
5. Involve the kids
If you have children, get them involved in saving for the trip by doing household chores to earn their spending money. You'll have to fork out for it anyway, but this way, you can do away with spending money on a cleaner, lawn mowing, car washing etc. That could save around $100 a week, plus you're teaching them about the value of money in the process.
6. Pay down debts
This might sound counterintuitive – you're trying to save money, so why “spend it” on paying off debts? Paying down credit card and store card debts faster saves you money on interest. In future months, you'll pocket those extra dollars that would have gone to interest on the outstanding balance. Plus, you have freed up your card's balance to use on your getaway. Revisit that mortgage to the new, much lower interest rates.
7. Spend points, not cash
I always like to finish on a positive note, and this is a great one. Credit card points, store loyalty programs, frequent flyer points – if you have enough of them saved up, you can redeem them instead of spending your hard-earned cash.
It's essentially free money, and what better time to use those points than on a family getaway!
Helen Baker is a licenced Australian financial adviser and author of two books: On Your Own Two Feet – Steady Steps to Women's Financial Independence and On Your Own Two Feet Divorce – Your Survive and Thrive Financial Guide. Proceeds from the books' sales are donated to charities supporting disadvantaged women. Helen is among the 1% of financial planners who hold a master's degree in the field. Find out more at www.onyourowntwofeet.com.au Note this is general advice only and you should seek advice specific to your circumstances.