Get Me Out of Here

20/07/2020
Posted in Blog
20/07/2020 Mduduzi Luthuli

A client recently e-mailed me the below question…

Q: As the weeks turn into months of lockdown, it’s safe to say the cabin fever has set in and I’m suffering. The walls have begun speaking to me and never have I loathed being at home as much as I do now. The only thing keeping me going is planning a much-needed vacation for when this is all over. I can’t wait until I’m able to travel again and need your help in ensuring my dreams become reality. What should I be doing now to ensure that I can travel as soon as the legal and health status allows?

Here’s my answer below. I hope it helps you too.

Vacations are supposed to be relaxing, but it’s hard to unwind when you’re constantly stressing about how you’re going to pay for it all. Whether it’s a road trip, cruise or another much-needed getaway, now is the time to start saving up for that vacation you’ve been dreaming of for months.

With a little creativity, you can bulk up your bank account and be ready to hit the road or beach in style, without going into debt to do it. Saving money is something many of us struggle with, but a dream vacation is great motivation to start.

What you aim to save should be attainable, based on your income and expenses. After all, if you’re diligently stashing away some money every month, but feel like you’re hardly making a dent in your savings goal, you’re more likely to give up saving all together.

Start by researching the costs of your expected expenditures, such as airfare, rental cars, hotel stays, meals, souvenirs, special excursions and tickets to attractions or events. After totaling those costs, you’ll have an estimation of how much you’ll need to save.

Now work backwards to reach your savings goal. Divide your estimated vacation cost by the number of months you have before taking your trip to figure out how much money to save aside each month. If your vacation date isn’t set in stone, you could figure out how much you’d like to save monthly and divide your total estimated vacation cost by your monthly savings amount to figure out when you can afford to take your trip.

So many times, people will design their vacation and then attach a Rand amount to it thereafter but it’s better to come up with a reasonable number first, then whittle away at it when you start planning the trip. The reality is we’re in the middle of a health and economic crisis so there’s limited money to go around.

Open a dedicated vacation savings account and capitalise it using debit-order payments . Allocate the funds to a high-yield savings options, like our money-market or stable fund dependent on your timeline, and your money might even grow a bit while you’re looking forward to your trip.

If you have some budgetary breathing room, do yourself a favour and look for an opportunity or two to treat yourself as you research your destination. Your ideal splurge might be a spa day, a fancy restaurant meal, a chartered fishing trip, a guided city tour – it all depends on your destination and personal preferences. Identify and budget for any splurges well in advance, so that they don’t adversely impact your ability to save for the rest of your vacation.

If you can, look for ways to make an extra income. Whether you have just one free hour a day or if you are willing to work 40 – 50 hours a week on top of your full-time job, there are many options when it comes to earning extra money which can then be saved towards your vacation.

Just a few examples of the many ways you can make extra money are teaching English online, selling stuff you no longer need, answering online surveys, walking dogs, house sitting or becoming an Uber driver. It’s 2020 and the gig economy is hiring so research creative income opportunities online.

If you have a credit card, research how you can use it to hack your travel costs. I know someone who churned several credit cards for their bonuses and saved up a ton of points before they left for their travels, and they were able to get all of their flights for nearly free by doing this. As with any use of credit though, swipe responsibly within your financial means and ensure you understand the associated costs and interest.

Subscribe NowA monthly exploration of our relationship with money

Any fool can know. The point is to understand - Albert Einstein