Factor To Be Considered Before Planning A VacationOver the past decade or two, vacations have become something of an afterthought for many individuals and families. Certainly, increased job and career time commitments are one factor leading to less frequent vacations.
- For some people, the simplest solution will be sufficient.
- This involves using your existing current or savings account to save, but keeping track of how much of your total account balance is for your vacation.
- You can keep your records in a notebook, computer spreadsheet, on your smartphone, or using whatever other tool works best for you.
Separate savings account
- However, some people may find that they can’t keep track of a separate balance in their existing account, or that the temptation to spend the money on other things is simply too great.
- For many of these individuals, the solution may be to open a separate savings account at their current bank.
- With a separate account, it is easy to link it to your current and/or savings accounts, so that you can quickly and electronically make deposits into your vacation fund.
- You can also limit your own ability to use your vacation savings for other purposes by not keeping any debit cards or cheque books that come with the account in your wallet or purse.
- It is important to note that this separate savings account should not involve any fees or charges that will in any way reduce your savings.
Short term fixed deposits
- If you are concerned that you still may be tempted to use funds from a separate savings account for casual spending, you can take things a step further and use short term bank fixed deposit as your vacation savings vehicle.
- Most banks offer fixed deposits for very short terms (sometimes as low as 30 or 31 days), so it will be easy to time the maturity of these fixed deposits to match your vacation plans.
- Some banks and credit unions even offer special “vacation club” savings accounts.
- These are generally no fee accounts that require you to automatically deposit a certain amount each month, and the deposit can be accomplished from an automatic transfer from your savings or current account.
- The primary advantage of this type of arrangement is that it automates the savings process (which is always a good idea), and allows you to plan exactly how much you need to save each week or month in order to reach your vacation savings goals.