Now that the kids are out of the house, maybe you and your spouse want to take that once-in-a-lifetime island-hopping cruise.
Or maybe your friends are planning a super-exciting cross-country road trip to see all the sites you learned about in school. It can be tempting to skim a little off the top of your retirement savings to fund that dream vacation and make it happen. But whatever your vacation dream is, you shouldn’t sacrifice your retirement savings to live it.
This isn’t to say you shouldn’t take that trip. Vacation is important to health and wellbeing. If anything, studies show that Americans aren’t taking enough vacation during the year.
But, for those that do take a break, many are going into debt to do it, sadly enough. A survey by the financial planning platform LearnVest asked 1,000 adults how they finance their vacations. The answer? They go into debt.
The study found:¹
- On average Americans will accrue $1,108 of debt for a vacation.
- 32 percent said saving money for a vacation was their top financial priority – above saving for a home or retirement!
So, what to do if you’re hungry for travel and need a getaway? Here are some simple strategies to help you save for that vacation, all while protecting your funds for retirement.
1) Follow the $5 a day rule: The $5 a day rule simply means you put a fiver away each day toward your vacation. Most of us could probably scrape together $5 a day just by making coffee at home and bringing a sandwich or two to work each week. If you muster up the discipline to stick to it for a year, you’ll end up with $1,825 – a pretty decent vacation fund.
2) Use a rebate app: Rebates can put cash in your pocket. Try an app like Ibotta.² Just sign up and select the rebates for items you purchase at the stores you frequent. Shop and scan your receipt. The app will put the rebate into an account. You can withdraw the cash through Paypal or Venmo.
3) Cancel the gym: Working out is critical to staying healthy! But ask yourself if you really need that gym membership. Gym memberships can cost anywhere from $35 to more than $100 a month. Consider saving that money for a vacation and start working out at home.
4) Cut down on your food budget: Of course, you got to eat. But we could all probably tighten up our food budget a bit. Try meal planning and batch cooking. Plan your meals around what’s on sale and in season.
5) Find free entertainment: Can’t live without getting some weekly entertainment? You don’t have to – just look for the free events going on in your community. Consult your local newspaper or town’s website for info on community festivals, outdoor concerts, and art shows.
Keep Calm and Save On
Saving for anything has its challenges. But with a little effort and perseverance, you can have your dream vacation and your retirement, too!