We asked Albertans what they’re saving for and received an overwhelming response from across the province. Paying for home renovations, family vacations, children’s education funds and starting a business were the top four reasons to save.
Throughout this four-part series on “What are you saving for?” we’ll provide a few tips and tricks to help you achieve your savings goals.
When you start putting together your financial budget, you’ll find plenty of priorities quickly eat away at your monthly income.
Your mortgage, childcare and household bills often take precedent. After putting away money for your retirement and children’s educations, saving for a vacation can fall low down on the list.
Nevertheless, we discovered that getting away to recharge your batteries is a priority for Albertans and one of their top reasons to save.
What it costs for some serious downtime
If you’re looking to take the family away on vacation, unless it’s camping in the mountains or a cabin in the woods, you’re generally looking at spending thousands of dollars.
A dream family trip to Australia, for example, would set you back over $12,000 just for airline tickets and hotels. An all-inclusive, four-star trip to Turks and Caicos could cost you over $20,000.
Even a bargain basement cruise around the Caribbean costs over $2,400 for a week—and that doesn’t include flights.
It’s not surprising, then, that many people save—often for years—to go on a special vacation.
Should you save or put it on plastic?
If you feel like you can’t wait to get away from it all and decide to pay for your trip on your credit card, chances are it’ll take a year or two to pay it off.
If you save up for your $10,000 holiday by putting away $500 each month, you’ll reach your goal in 20 months. If you pay for it on your high-interest (19.99%) credit card, it’ll take you 25 months to pay off. Plus, you’ll add $2,266 in interest to the final cost.
Saving for your vacation takes less time—and saves you thousands of dollars—so it makes good sense.
Tips for saving for your dream vacation
- Shop around for the best deal. The less you pay, the less you need to save. Plenty of travel sites offer great deals. You can save even more by booking in advance.
- You can also save money by choosing accommodation with a fully-equipped kitchen. Renting a villa, casa or apartment can greatly reduce your dining costs.
- Accommodations that suit a family can be very reasonably priced. We found a rural house in Majorca with a pool for only $1,000. We also found an apartment in Florence, Italy for $784 and a cottage in England’s Lake District for only $1,100. These prices were all for one week of accommodations.
- Open a separate vacation savings account and set up regular, automatic monthly deposits. Make sure you can afford the amount you save. Don’t jeopardize your pension or education savings for the sake of a trip.
- A tax-free savings account (TFSA) is a good way to save for your big trip. It offers the combination of a place to build your savings tax free along with the ability to withdraw your money any time. You can open a TFSA in minutes with ATB Prosper.
Let’s get you on the road to your dream vacation
We can help you work out the most efficient way to save for your big trip. We’ll help you calculate your monthly savings goals and devise a plan that helps you get away as soon as possible.