226-378-7748 joe@budgetboss.ca

Tuesday, February 19, 2019

Vacations for Life: 10 Tips to Make it Happen

I am recently back from a trip to the beautiful vacation spot, Dominican Republic. While I do miss the sun and fun, and I came back to -14 degrees and a blizzard, I feel as if I must share my thoughts on vacations. This week in paradise was my first trip in 7 years and many people cringe when they hear that. I am a huge advocate for annual rest and relaxation, yet being a workaholic got in the way. Studies have proven that taking time off every year makes people healthier and more productive. The problem is always, where’s the money? Going away not only costs money, but for some, the time off work is costs lost wages as well. Today I have 10 practical tips to show you how you can vacation annually for life. I guarantee there are at least a few you can start working on right now.

1) Dedicated vacation fund

This is probably the easiest and most practical way to save for annual vacations. Quite simply open an account and have automatic amounts deposited regularly into it. I have one ambitious young client who deposits $120 every week into 2 investment accounts. One of those accounts is for long term growth, in which $80 goes into. The other is for an annual scuba trip in which $40 a week goes into. What’s 40 x 52? $2,080! Yes, something as small as $40 a week allows this Boss to take his much-anticipated annual scuba trip. It’s painless and effective. Consider a general savings account or a Tax-Free Savings Account invested in low-risk funds, so the money is there when you need it.

2) Cut out, the nights out

The numbers are staggering. The average Canadian is spending a whopping 30% of their food budget on dining out. Using my example above, even something as small as $40 a week can really add up. Restaurant prices are grossly marked up as you are paying a cut to everyone who touches that plate before you get it, including the guy in Newfoundland who caught the fish. With my clients, I see that it is not uncommon to spend upwards of $1,000 monthly on restaurants and pubs. Simply cutting out one night every 2 weeks can save $150 a month. $150 a month is $1,800 annually and that is a nice little amount that can be used towards a vacation.

How much should you really spend on dining out? – MoneySense

 

3) Side-Hustle

Yes, the good old side-hustle. I am a huge advocate for making more money. Mainly because I do not want to give up my lifestyle or pinch pennies. We all strive to have that amazing work/life balance. Giving up your Saturdays may seem contrary to that. Let me smash that idea. Imagine that working 1 extra day a week could net you an extra $100 a week. That extra $100 translates into $4,900 over 49 weeks. You may be asking, but aren’t there 52 weeks in the year? Why yes there is, but you will be spending 3 of them in December going on an adventure because you saved an extra $4,900 this year. That to me is real work/life balance. You see, good things never come without sacrifice and if you can sacrifice 8 hours a week you can be rewarded with 3 weeks off laughing at everyone back home. Seriously folks, the side-hustle works.

Financial Advisor

 

4) Small amounts

I used to get super creative in my full-time waiter days. I would throw all my “crap change” in a jar at the end of every shift. As you can imagine being a waiter it really added up. With nothing larger than a quarter, I was able for several years to save $200 a month. That’s $2,400 a year, by the way, just saying. Another method I used one year was the $5 rule. I made a vow that anytime a $5 bill touched my pocket it went into an envelope. Over the course of 6 months, several envelopes were full, and I had $5,000! That makes for a nice vacation! Silly me, I opened a stupid investment account instead, which I still have. The point is, small amounts add up and Grandpa with the mason jars at the bank full of pennies is probably a millionaire.

50 Budget Hacks for 2019 – Budget Boss

 

5) Yard Sale

You don’t need to be Marie Kondo to know you have too much crap. Ladies I am looking at you with closets full of stuff you only wore once. There are plenty of online marketplaces you can unload your old stuff including Facebook Marketplace and Kijiji. This accomplishes 2 very important things. Firstly, you will make some well needed extra money. Secondly, your chances of appearing on the show hoarders will be greatly reduced. Also, once the stuff is gone, making a vow to not acquiring more crap over time will really add up.

 

6) Rewards miles

Please be careful when using this tip. Many of the gurus I model my practice make a point of vowing off credit. I look at credit like an ex-girlfriend, if you can still be friends, why not make it work. I personally put everything on my credit card. The secret is to not carry a balance, which I don’t. This requires extreme vigilance and sadly most Canadian’s aren’t in that boat. If you can stay debt free, using reward miles to pay for or help pay for a trip, is a great way to save money. As a side note, make sure you choose a card with no annual fee. They may be hard to find, but they are out there. I know this, I have one.

 

7) Take-out

Much like the restaurant piece, Canadians spend a staggering amount on take-out and delivery. I get it, cooking after a long day at work sucks. Let’s go back to example 1 with my keen client who loves to scuba. 2 take-out order’s a week of $20 is $40 a week. What does $40 a week equal annually? You guessed it, $2,080! After tip and delivery, $20 doesn’t get you a whole lot. Also, I know a lot of people who order delivery far more than twice a week. Here’s the question. What do you like more: Sushi or sun and sand? I think that the answer is simple.

Financial Advisor

 

8) Useless memberships

Cheers to all you amazing folks who make it to the gym daily. The 3 of you I see when I go my twice a week are the real heroes. The rest of you are wasting money. The average gym membership costs around $60 a month, or $700 annually. A 2016 poll stated that a mind-blowing 67% of gym memberships go unused! 2/3 of people never go, EVER! What an ingenious money-making scheme! Cutting out unused memberships can really add up. This includes magazine subscriptions (do people actually have these still?), food club memberships (it’s called a grocery store folks), recurring cell phone junk (go away apple care), and countless others. Go to the library to read a magazine or go online, Costco doesn’t save anyone money and buy a protective phone case. We are being bled dry by small membership costs, so cutting them out could be the key to annual vacays.

 

9) Be reasonable

You may find that it is tough to go on vacation because vacations are just too damn expensive. It may be that you are just unreasonable with your vacation expectations. 5-Star may be perfect, but 4-Star may be just as good. The Bahamas is very, very nice, but Grenada is nice too. Disneyland is amazing, but Mickey Mouse is jacking your dough. You can find amazing deals all the time if you are willing to look. The key is to try.

Check out the Budget Boss cheap vacation locator tool!!!

 

10) Avoid peak times

It shouldn’t be a surprise that certain times of the year are far more expensive than others to go on a trip. These times include Christmastime, March Break, Spring Break, Valentine’s week and any long weekend during the summer in cottage country. You can save a ton of money by simply choosing the right time to travel. Going down south in the summer may seem foolish, but it is dirt cheap. A good travel agent should be able to direct you as to when the best and worst times to travel are.

 

We work very hard all year round and should be able to enjoy the fruits of our labor. The key is to do it responsibly and make sure you aren’t hurting all year because of the trip you took. A little savviness and a bit of restraint can make annual vacations a painless reality. My tip for when you get there, avoid the Dominican beer.

“I hate vacations. There’s nothing to do.” – David Mamet
Financial Advisor

Do These 5 Things, and You’ll be Wealthy. Don’t Do Them, and You, Well… Won’t

Email – joe@budgetboss.ca 

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