It’s vacation time! Who doesn’t enjoy a week or two of fun away from the usual trials and tribulations of everyday life? But who wants to come home to a mountain of post-vacation bills?

Start saving now

When your vacation planning includes an ‘afford as you go’ strategy, you won’t face big, long-term, high-interest bills when you return. Where does this extra money come from? Well, it’s not actually ‘extra’ money – it’s money you already have but don’t realize. The secret is to set it aside before it gets sucked into the costs of everyday living, and you do that this easily.

Paying yourself first

This is one of the best saving strategies there is – whether you’re saving for a holiday, retirement or anything else. It’s this simple: Set aside a portion of your pay as soon as you get it. You won’t end up spending it and your vacation or (insert other financial dream here) nest egg will grow steadily.

Simply save a fixed-dollar amount or percentage of your income each pay period. Choose an amount you can comfortably afford.

Make your savings pay

Get your savings out of low-interest bank accounts and into higher-return investments, such as:

Money Market Mutual Funds that earn competitive returns are usually easily and quickly redeemed and may even allow chequing privileges. If your vacation will take you south, check out money market funds that allow you to save in U.S. dollars and reduce your exchange risk.

Guaranteed Investment Certificates (GICs) or Term Deposits when your vacation is a long way off and you can commit your cash for a longer term. Your cash is locked in for a fixed period but the interest rate is usually higher.

Government Savings Bonds are usually cashable at any time. You can only purchase them within a limited period each year but your employer may offer an automatic deduction program to purchase them.

Save before vacation to save on vacation

You’ll reduce your vacation costs by paying cash for your travel tickets or using cash to take advantage of ‘last-minute’ travel bargains. You can also avoid after-vacation bills by purchasing traveller’s cheques before you leave or using automated teller machines during your holiday instead of a high-interest credit card.

Talk to your professional advisor about the best pay yourself first strategy for you – one that will not only reward you with a debt-free vacation but will also help you achieve all your other financial goals.

This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.

Contact David Brown at 250-315-0241 or at [email protected] to book your appointment.