Relaxation/Vacation
Tips on how to start saving now for next year's big getawayVacation strategiesAs you are reading this column, I am enjoying a well-deserved week of vacation. TERRI WILLIAMS |
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 [ 2007-08-01 ] |
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There's nothing like sitting by the lake reading a good book, swimming, fishing, drinking Caesars on the deck and enjoying the company of good friends.
And the best part of this vacation is that it is not expensive. My father-in-law owns a cottage on a small lake and he generously allows our family to use it each summer.
But for many Canadians who may not be able to rely on the charity of family or friends, family vacations can be a huge financial hit. The best way to plan for your vacation costs is to plan ahead.
Before we had the family cottage to retreat to each summer, and before I knew more about managing money, my husband and I saved for our vacations through a variation on the traditional piggy bank.
We would use a two-foot high ceramic fire hydrant with a slot for coins. Throughout the year we would break our bills each day as we made small purchases and each evening deposit all our loonies and toonies in the hydrant.
To get at the money in our Holiday Hydrant, we had to smash it (which was always fun). One year we had saved $1,100 towards our southern winter vacation.
We then realized it would be better to earn some interest on this money so we started buying Canada Savings Bonds through a payroll plan.
Again, this resulted in us having the cash for our vacation when we needed it, and we earned some interest while we saved.
Today we continue to save for our annual winter ski vacations by directing a certain amount of money from my husband's weekly paycheque straight into a separate high interest savings account.
These accounts are now paying over 4% interest which, over a year, could mean an extra $80 in your pocket on $2,000 saved. And, we don't access this money through a debit card or ATM ensuring limited access until we need it for our vacation.
High interest savings accounts are just one way to save for a short-term goal such as a vacation or buying a new car or raising enough money for a down payment on a home.
Talk to your financial adviser to find out what short-term savings vehicles are best for you.
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