Financial Planning For Your Vacation

So you’ve worked hard and you deserve a vacation! But what happens when you make last-minute decisions rather than carefully plan and budget for your vacation in advance? The result is that you’re forced to either cancel or put it on your credit card which can be stressful upon return! To avoid difficulty, a little planning now will set you up nicely for next year’s vacation. This article will help you to plan ahead and secure your finances before you travel so that you get the most out of your vacation and leave some of your worries at home. So print that amazing picture of your dream vacation and put it in your diary because we are going to help you go on the stress-free vacation you deserve!

Decide who goes

Will this vacation be a family outing or will it be you and your significant other? While family vacations usually mean greater planning for the “vacation project manager”, the plus side is that children these days are experts on anything to do with the internet, so get them involved in researching activities to do on your vacation. Keep in mind that a group also means that you may be entitled to group rates or discounts if you combine hotel, airfare and a rental car.

Prioritize expenditure

Start with the end in mind. What means the most to you while on vacation, activities for the children or shopping? This will help you allocate time and money in the most efficient way while on vacation. If child-friendly activities are the focus of your vacation, shop for as many things as possible online and have them delivered to your hotel to give you more time with the children. If accommodation is your priority, then you can settle for cheaper food rather than expensive restaurants.

Time your vacation

Off-peak seasons always offer cheaper rates for hotels, airlines and car rentals. Also consider Tuesdays and Thursdays or very late or very early flights. If you can’t avoid the busy travel times, it may be a good idea to consider a travel agent who may have pre-booked seats on flights without having to pay a lot of extra money.

Decide the destination

The further away from home you go, the more you have to protect yourself. Consider the following:
Transport: Don’t discard car insurance on your rental car because you think that an accident won’t happen. Consider a faulty engine with no mechanics around.
Communication: While you may take internet access for granted at home, in many countries you can only access this facility once you pay for it. Also, remember that if you use your phone overseas, roaming charges will apply.
Health: Finally, remember that getting ill can happen anywhere in the world, so ensure that you have adequate health insurance that can cover you on your trip.

Budget Budget Budget

Saving for a vacation is as important as retirement planning, so use the same disciplined approach. Make a checklist of all of the financial needs for your trip (airfare, car expenses, hotel, site seeing etc). Next, factor in when you will be going. In three months? Next year? These will help you to determine how much you will need to put aside from your paycheque each month. Of course, you should also put aside money for an emergency fund to cater for expenses that may arise in a foreign country where financial help can be either impossible or very expensive. Now that you know how much you will need to save for your vacation, put it in an investment that provides easy access to your funds, keeps the principal safe and provides a rate of return appropriate for such a level of risk and easy access.

Let your vacation be one of the most memorable times of your life.

You should consult with a Financial Advisor at the UTC, who can assist you in planning major life decisions and events.

Have fun on your vacation, you deserve it!