Get a Head Start on Your Next Vacation

Going on regular vacations is essential for your mental health. A relaxing break in your day-to-day routine soothes the soul and reduces stress. However, if you pay for that vacation with credit, especially at a cost you can’t comfortably pay off in 1 or 2 months, then the vacation could cause even more stress.

Here’s a great idea one credit union member, Steve, and his family uses to pay for a vacation. It enables them to save up money before the trip and save them from financial stress after the trip. He writes:

“Every year we start saving for our next vacation as soon as we return from one. Each month we transfer a fixed amount out of our checking account into a credit union ‘vacation account’ that receives a higher rate of interest. My wife and I agree to use this account only for vacation savings.”

Steve emphasizes getting agreement from the family. For any successful family budget goal, you must have buy-in. He continues:

“In addition to our monthly transfer, we have an agreement to deposit every gift of money we receive—from Christmas, birthdays, whatever—into this account. The same goes for any rebate checks we receive from product purchases during the year. Basically, every little ‘extra’ check we receive goes directly into this account.”

Every so often, Steve and his wife put money into a short-term share certificate/CD (certificate of deposit) to get an even higher yield. He says they have the dividends from the CDs transferred into their vacation account, and since they have CDs maturing almost every month, they can deposit some or all of the principal into their vacation account as well.

Steve and his family are doing several smart things that you can apply to any savings project:

  • They have a specific goal.

  • The goal has a deadline.

  • They automate their savings.

  • They agree on a strategy and work together.

This is just one way to save for a specific goal. If you’re interested in learning other ways to reach your savings goals, stop in at one of our branches or call us today!