An affordable vacation can be difficult enough to plan – there’s getting time off from work and school, figuring out the best way to get there, and of course how to fit it all into your budget. Maybe you’re looking to book the same beach house at the Jersey shore your family has been going to for years. You might have a dream destination in mind for 2020 but aren’t quite sure where to start with your saving and investing. Or your trip is almost in reach but you’re looking to make a few adjustments to help you put aside more and reach your goal faster.
With the high costs of traveling, hospitality, and dining out, vacations can be extremely expensive. By investing and saving money properly, you’ll be able to enjoy your trip(s) without completely draining your bank account. Below are tips and methods that will help you better invest and save so that you can afford the vacation that you and your family deserve.
Investing and Saving For “Normal” Vacations
Planning on taking a few family trips down to the shore this year? If so, you’ll need to have some spending cash handy – especially during the summer. Seeing that the timeframe is relatively short, your options won’t include anything with equity risk. Your best options are:
Simple and classic. For tips and methods on how to save/earn cash quickly, scroll to the “Saving Tips and Strategies For Traveling” section.
Certificate of Deposits (CDs) are similar to savings accounts in that they are insured “money in the bank.”
Money Market Funds:
Money Market funds are open-ended mutual funds that invest in short-term debt securities such as US Treasury bills and commercial paper. They generally try to maintain a price per share of $1.00.
Short Term Bonds:
Potentially less credit risk and less interest rate risk, both of which are beneficial in a rising interest rate market.
Investing and Saving For The “Big Trip”
While weekend trips are certainly enjoyable, everyone has a dream vacation trip that they’re planning. You have a ton of vacation days saved up, now you just need the money. Since these trips are more expensive than your weekend getaways, and knowing you have more time to plan, your investing and saving strategies will be different. Here are some available options:
1. Save for multiple years with some equity exposure:
Invest in the stock market. Yes, the stock market has its ups-and-downs. Many people wrongfully allow this fluctuation to prematurely end their investments. They are so focused on “buying low, and selling high,” that once they think things can’t get much better or will continue to get worse, they sell.
This 90-year historical S&P 500 Index shows that despite the fluctuation, stock prices continue to rise.
To stay informed and up-to-date on the stock market’s performance, be sure to follow our monthly stock market review.
2. Invest Wisely and Timely
Develop a strategy to ensure you invest the proper amount into the best investment opportunities. After that, begin depositing your funds into an investment account. If done properly, that balance will boost much better than any interest rates a saving account will offer you. Like one would with a 529 college savings plan, it is highly suggested that the investments get less risky as you get closer to the time the monies may be needed.
Invest confidently with an experienced team of investors.
Saving Tips and Strategies For Traveling
1. Have a Spending Budget
This is an old, yet effective method. As they say, “if it ain’t broke, don’t fix it.” In the beginning of each week, take out a pre-established amount of money that you’ll use for expenditures.
Limit Day-To-Day Expenditures
The easiest way to save is to reduce or eliminate unnecessary spending. Don’t eat out as much or purchase non-necessity goods.
2. Choose a Credit Card With Traveling Rewards
- Consider choosing a credit card that offers air miles. These miles are not only accumulated through just using the card but also through shopping online, eating at certain restaurants, or by taking surveys. After a while, you’ll have obtained enough points to either cover or put a dent in one of the biggest vacation expenses – traveling.
3. Selling Your Unused/Old Items
- Most people fail to realize the potential money they have lying around and collecting dust. Have a traditional yard sale, or sell digitally via eBay, Facebook, Amazon, etc. Your bank account and your significant other will thank you for cleaning out your garage and attic.
4. If necessary, Get a Part-Time Job
- In our world today, getting a part time job no longer limits you to simply flipping burgers or scooping ice cream – there are much more options. Become an Uber or Lyft driver. Not only is it convenient (you work when you want), but it’s also efficient (your paid weekly). If driving isn’t your thing, start Freelancing or get a side job.
Don’t allow costs to deter you away from the experiences and joy of traveling. By saving and investing effectively, you can reduce the impact on your financial livelihood, and take the vacation you and your family deserve. For more tips on how to meet your family’s financial goals be sure to check out our Family and Finances blog series published throughout 2019.