"It’s February and I need to escape."

February is a tough month – the holidays are over, the days are still dark, the bills are in and winter feels like it may never end. So whether your dream get-away is sunny and warm or involves snowy peaks this is the time of year many Canadians want to escape.

Budgeting for your vacation

The first step is to determine your vacation budget. If you can avoid peak travel times there are deals to be found and you will not fall prey to higher airfares and lodging rates. While the majority of your budget will be for transportation and lodging don’t forget meals and entertainment while you are away. Once the numbers are decided it is time to start asking the tough money questions. Can you afford to take the vacation this winter or would it be best to save for next year? Vacation is a time to decrease stress, so best not to add to the stress when you get home by taking a vacation you cannot afford. Afford means you are not running up credit cards, withdrawing from your emergency fund (even if taking a vacation seems like an emergency) or borrowing from your kids’ university fund to pay for your vacation. So if you have enough additional savings, extra cash or are expecting a cash windfall from a tax refund it may make sense to escape this year. But remember, if you put any of your vacation expenses on your credit cards or line of credit make sure you can pay them off in the first six months after you get back. Adding interest expenses to your vacation spending is not the way to go.

If this is not the year there are ways to save so a winter escape becomes more than just a dream, but a reality. The best way is to budget for your winter vacation throughout the year. Decide on the vacation and the budget and save a portion of the expense each month. You can set up an automatic withdrawal to transfer money from your chequing account to your savings account and earmark the account for your vacation. Squirrel away any extra money over the course of the year. By planning in advance you can take the big purchases like hotels and airfare and spread the purchases out over the year. Don’t forget about credit card rewards and other reward programs. It is time to look at the websites for each program and see what they have to offer. Throughout the year many have promotional deals which offer discounts on hotel and airfares. Watch the paper for deals too!

Over the course of the year take loose change, recycling money, garage sale proceeds, birthday or holiday money and put it all in your vacation savings account. Consider spending a little less each month on entertainment. Or cut out expensive coffee for a week or a month. There are lots of ways to reallocate your ‘extra’ spending towards your vacation. If you are going to be away a week – then you can take the amount you spend on groceries, coffee and lunch and allocate it to your vacation amount. If your vacation is two weeks – you can take two weeks worth of your spending budget.

It’s Vacation Time

Whether your vacation is around the corner or still just an idea there are a few things you should remember. Your Credit Union debit card can be used world-wide at Cirrus ATMs, but never rely on one method of payment. For more information, click Money and Your Travels. Alert all your financial institutions about your travel plan so they know to expect spending outside of your ‘usual’ habits. Consider taking travel insurance out for the length of your trip. As a Credit Union member you are eligible for group travel insurance rates. Just give us a call or come in to discuss.