Today I am feeling particularly relaxed. Not because today’s a national holiday but because I am still in vacation mode. It’s been almost a week and mentally I’m still by the pool lounging and laughing with some great girlfriends.
But vacation planning is a tricky thing. How do you save during the year for something that takes place once or twice a year? If you know you’re going to Europe next year, you can search for the best deals, develop a budget, and save enough to pay in full for all travel, lodging, meals, and any activities you feel like getting into. But if you just find out that your homegirl’s bachelorette party is in Vegas in two months, and you don’t have ample savings or leftover monthly discretionary income, you might not be able to swing it. “Have credit card, will travel” may help in a pinch but it’s not a motto to live by.
So what’s a fun-loving gal to do? My advice is go ol’ school. When I first started working, I participated in my bank’s vacation club. Throughout the year, I deposited a small amount into a savings account which could be withdrawn in full on a predetermined date (usually a year from opening or some point during the summer). At 21 year old, this method worked well – I could estimate how much I would be able to spend on a trip or two and I couldn’t dip into it to pay for non-vacation items. There are some community banks and credit unions that still offer such a product.
At 40, my vacations are more frequent (and expensive) than they were 19 years ago. But the vacation savings account method still works for me. I usually know I’m going somewhere significant three to six months beforehand which gives me time to estimate a budget and start saving. I back into two weeks before my travel date and determine how much of my check I need to put into my reserve account (or how much of my monthly spending I need to curb). This includes daily spending money which I usually carry in cash to make sure I don’t reach for the debit card too often. If I’m traveling somewhere that cash isn’t the safest option, I use my credit card but track charges while on the trip and pay the balance when due with my vacation funds.
A few other things that have worked for me:
- Use miles/points when you can. I use a credit card for most of my reoccurring bills and monthly purchases so I build points that can be used for all kinds of things, like air miles. This way, as I use points, they are constantly being replenished. For my recent trip, I used miles to pay for half of my airfare which kept it within a reasonable amount. Note: only use this option if you can pay off the credit card each month.
- Search for the best prices but buy from the source. What I’ve found is while kayak.com, travelocity.com and orbitz.com are great aggregator sites, if you go directly to the airline/hotel/car rental place with the lowest price, you may get it a tad bit lower. Plus you get the convenience of dealing with the customer service folks of the actual merchant, avoiding the middleman, if you have any issues with your reservation.
- Go with a group but pay solo. Sorry friends, but if you can’t pay for your trip, I’m not fronting you the cash. May sound like a no-brainer (or that I’m mean and nasty) but I have been duped into buying the tickets all at one time (“so we can fly together”…whatever), or putting the entire room bill on my card and never getting reimbursed. First time, shame on you; second time, shame on me.
- If traveling internationally and carrying a wad of bills isn’t an option, use a credit card with the lowest international transaction fees. Some cards charge a flat rate, like $6 per transaction, while others charge a percentage (e.g., 3% of the total transaction). You should call customer service at least 3 days before you go find out the rates and give the company, particularly if it’s a local or regional bank, time to authorize your card for international use.
But if a far-and-away vacation is still not within your financial reach, no sweat. Opt for the stay-cation. I have had many of fun trips right in my backyard – wine tastings, outdoor concerts or movies, checking out a nearby bed-and-breakfast, crashing the pool at a friend’s apartment complex. Most cities have inexpensive or free fun local activities (the Friday paper always has a Weekend section), so checking out for a bit doesn’t have to drain your checking account.
Happy 4th – here’s to summer! Enjoy.