Whether you choose to holiday a few hours away from your home or across the globe, saving for a family vacation can feel like a daunting task. With so many different expenses to cover and an array of activities and experiences each member wants to do, the total cost can rack up quicker than you hope for. From buying foreign currencies on smoney.com.au to treating your family to an expensive meal, there are many costs you may need to consider.
But despite the price tag that typically comes with these trips, the process of saving can be used as an important financial lesson for your children and a fun bonding experience for the entire family to get involved in. In addition, by opening up the conversation of money and saving, you are helping to build solid foundations for how your kids manage their own money one day while working your way towards your holiday goal.
Establish Budget, Goals & Timeline
It is easy to say you are saving for a vacation, but without a properly planned timeline and budget, your end goal will likely become a moving target you can never quite reach. Of course, we often factor in the large ticket items, like airfare, hotels, and transportation, but many smaller expenses can catch you off guard if not planned for.
With a proper budget, you can factor in charges for food, admission fees, activities you want to do, extra money for incidentals and treats, and any souvenir shopping you may want to indulge in.
Review Current Spending Habits
The more aware you are of your spending habits, the better you can control them. For this reason, experts recommend taking your credit card or bank statement and closely analyzing each transaction you make.
When doing so, you are looking for two things. Firstly, any recurring charges you may have forgotten about or services you rarely use. And secondly, expenses for products or services that you know you can easily live without.
By highlighting this spending, you can eliminate unnecessary costs and use this money towards your vacation fund. It can get you to your goal quicker or allow you breathing room for more important bills.
If you use and pay off your credit card or any type of loyalty card that gathers points, consider collecting the points to use towards your vacation. Many airlines allow you to purchase tickets through this method, saving you a decent amount in your overall budget.
However, many financial experts strongly recommend not going into credit card debt to get points. Instead, pursue a different avenue if you don’t use a credit card or would prefer to avoid debt.
Open a separate savings account that is purely dedicated to your vacation fund, and set it up with an automated monthly transfer of a fixed amount that fits your budget timeline. Doing so allows you to keep track of your financial goal by not diluting it with other monthly budgets and expenses.
Furthermore, it takes away the need for you to actively set that money aside every month, and if you have any spare change at month’s end, you can easily add it to your vacation fund.
Involve the Kids
If your kids are at an age where they can understand the concept of money, tell them you are saving for a vacation and keep them engaged in the process. For example, if they are begging for takeout food or a new toy, ask them if they would prefer to spend that money now or rather wait to use it while on vacation.
By showing them that making sound financial decisions at the moment can lead to better results in the future, they will learn a smart financial lesson and appreciate the vacation on a higher level because of what they gave up to get there
Additionally, you can encourage them to switch off unnecessary lights, swap gaming time indoors for outside, and explain how slight changes around the house can add up to saving on electricity and gas bills. It will help you save money each month and turn these tasks into habits moving forward.
For many, having a visual reminder of their goals displayed somewhere that they see daily is a beneficial tool in helping them stay on track and motivated. Employ this same tactic and print out images of your vacation destination and activities that you can do.
Display these pictures and a visual savings tracker on the fridge or noticeboard (if your home has one) to remind the household how the saving process is going and what you are ultimately saving for. As more money is added, kids can take turns filling out the tracker, acting as a visual countdown until the fun can begin.
Furthermore, at the end of the month, take some time to talk to your family about the process, the strategies you are employing to save money, and any potential ideas that can be explored and used next. By keeping the conversation positive and open, everyone feels involved, and you can instill good financial habits in your children for the future.
Remember that the main purpose of a family vacation is to spend quality time together doing something enjoyable and memorable. If your vacation plans are unexpectedly changed due to unforeseen expenses, bad weather, or any other reason, try to be flexible with your rebooking or indulge in a staycation.
To make the most out of your staycation, should it be the route you choose to go, get each family member to recommend a local location or activity they have always wanted to visit or do. Then, compile an itinerary and use your vacation fund to become tourists in your own town to create lasting memories with fun family time.