As summer is in full swing, Canadians are planning their yearly vacations, looking forward to the travel season. However, the rising cost of living and higher interest rates make it challenging to budget for vacations. Here are some tips to help you plan and save for your next adventure:
Create a travel fund
Budgeting for a vacation can be difficult, but having a savings goal helps. Start by listing all your expenses and income to identify areas where you may be able to cut back and save. Try using a money management tool, such as TD’s MySpend, that can help you keep track of your spending. For example, if your anticipated trip will cost $4,000 and you have a year to save, the amount that you should consider setting aside is about $330 per month. Consider opening a dedicated savings account for your vacation and use a pre-authorized transfer service to automate your savings. Continue saving even after booking to help cover last-minute changes or spontaneous activities.
Search for deals and be flexible
Being flexible with your travel dates and destinations can help save you money. Research the most affordable times of year to visit your desired destination. If your top choice is too expensive, consider other destinations that may better fit your budget. Think about all-inclusive packages that cover food, drinks and lodging. If travelling with family or friends, try to determine which costs can be shared with them.
Leverage travel points
If you are a travel credit card holder, you could redeem your travel points you earned for flights, hotels and other travel-related expenses, which could help reduce your vacation costs. Remember to be cautious of vacation scams and only book through trustworthy sites.
Factor in all costs
Consider all potential costs, including activities, souvenirs and other expenses like service tips, visas and pet sitters if you need. If you’re planning an all-inclusive vacation, remember to account for incidentals, such as excursions and souvenirs. Don’t forget travel and medical insurance, and seriously consider including trip cancellation coverage.
Planning a vacation can be costly and stressful but with careful budgeting and the right tools, your dream getaway can become a reality.