This was originally published on Monday, September 2, 2013, in the Pacific Daily News. Click here to subscribe to the PDN.
Question: My family and I would love to go on a vacation next year. Do you have any tips that could help us save money for and during our vacation?
Answer: Going on vacation can be very expensive, especially if you are going off island. Like any large purchase, you need to plan and save. We recognize how important it is to take some time off from our hectic lives and relax with our family, but it should not be at the expense of putting us in a financial bind.
Starting early and creating a budget is the best plan. If you can plan well in advance, you can save more money. Give yourself about a year to start saving. Here are a few tips on how to save for a vacation:
• Create a vacation account. Create a special savings account just for vacation purposes. Your vacation account also can be used during your trip as an easy way to track your spending while you are traveling. If possible have an allotment or direct payment come directly from your paycheck to the vacation account. That way, you are not tempted to use that money for anything else. Consider opening the account at a different financial institution from your regular checking account.
• The spare change jar. Sounds old-fashioned, but it works. Did you know that you can save $500 in a year if you dump $1.37 in spare change into your spare change jar every day? If you have two adults adding to the jar or even getting the whole family involved, that total could be much higher. You can even make it a game to see who saves the most spare change at the end of the year.
• Liquidate. In other words, look around your house and sell things that you no longer need. Get rid of the old desktop computer or VHS player that is sitting around the house collecting dust. Place them on eBay or Craigslist. There are even websites that will offer you money for your old cell phones. Have a garage sale. There may be a gold mine of outgrown clothes or toys!
• Get everyone involved. Babysitting, washing cars or cutting lawns for the neighbors or family members is a great way for children to earn some extra money to help toward that vacation goal. Ask grandparents and family members to contribute to the vacation fund instead of a gift for holidays or birthdays. Make a special thank you gift of photos taken from the trip.
• A savings thermometer. This is a great way for all to see your progress and continue to be excited about saving for your vacation. Don’t forget to save a little more for emergencies.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at firstname.lastname@example.org and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com