Sara Swift from Utah Central Credit Union outlines some things that everyone can do to start saving for the big vacation.
1. If possible, start a vacation savings account a year before your planned trip and watch your money grow. Because of compounding, the money you put away now will grow incrementally each month. Give an example.
2. Resist credit card purchases. Avoid a post-vacation hangover by paying for hotels, airline tickets and other “big-ticket” items with a debit card or check. If you must use a credit card, find one with a low interest rate.
3. Embrace Austerity. Let’s say you’re going on a vacation in the next four months. What marginal expenses can you cut between now and then that would allow you to save about $50 or $100 per week? Live without lattes? Pack your lunch to work instead of eating out? Hold off major clothing purchases? Resist ordering pizza on the weekends?
4. Automatic transfers. Set up a plan with your credit union or bank to have a portion of your pay check automatically set aside for a savings account.
5. Establish a schedule. If your vacation is 15 months away, divide the cost of the vacation – for example $2,250 – into 15 parts and start setting aside that much each week ($150).
The average American family will spend between $2,250 and $3,000 on food and lodging for a two week vacation. (Sources: WomenToday – online magazine; The New
• More than two-thirds of respondents to the most recent survey by Ypartnership, co-authored with the Travel Industry Association, said they had downsized their trips in some way in the past six months because of personal financial concerns. And a survey just completed by AIG Travel Guard found that 47 percent of travelers polled plan to downscale their vacations to save money.
But while Americans may be cautious about how much they spend on vacations this year, they’re not about to give them up.
• Results of the Travelhorizons survey taken by Ypartnership with the Travel Industry Association regarding consumer behavior in the past six months:
•29 percent: Took fewer trips.
•16 percent: Selected less expensive hotels.
•12 percent: Stayed fewer nights on a trip.
•11 percent: Drove a shorter distance to destination.
•7 percent: Changed destination.
•2 percent: Brought fewer people along.
• According to the Orbitz, another online booking agency, said 35 percent of those polled in its quarterly Traveler Update Report are renting smaller cars because of current fuel costs. “We’ve been offering hybrid vehicles on our Web site for two months, and response has been good,” said Jim Cohn, an Orbitz spokesman.
• THE TYPICAL VACATION
How travelers allot expenditures:
•Airfare, 41 percent
•Lodging, 23 percent
•Meals, 13 percent
•Car rental, 7 percent
•Entertainment, 5 percent
•Ground transportation, 4 percent
•Personal car, 3 percent
• Miscellaneous, 4 percent
(Source: Kansas City Star, April 24, 2008)
For more information on setting up a vacation savings account, you can contact any of the Utah Central Credit Union branches in the state. You can find the nearest branch near you by visiting their website www.utahcentral.com.