If you’re taking a holiday trip, you’ve likely been putting aside savings to pay for it. But your financial planning shouldn’t end when you buy your plane tickets and book the hotel. Keep financial stress out of your carry-on baggage by taking a few extra steps before your hard-earned holiday.
8 tips to get your finances vacation ready
1. Ensure your monthly bills are paid
Before you leave home, make sure you’re up to date on paying your bills. And check to ensure you have enough funds in your account to cover upcoming direct deposit payments. This can help give you peace of mind while you’re away, and it also can make it clear how much money you have left to spend on your holiday.
2. Keep the monthly savings going
Along with covering your monthly bills, ensure you will be able to continue any monthly contributions to your savings or investment accounts. Your future self will thank you, while your present day self is relaxing at the beach.
3. Know your daily spending limit on vacation
Having a dollar amount daily spending limit can help you avoid draining your holiday budget before your trip is over. Your daily spending amount can include things like meals, transit or taxi fares, and fees for museums or activities.
Depending on your accommodation, you may have some meals or other expenses included already. Make a daily estimate before you start your trip and see how you do. If you don’t spend your whole limit one day, the rest can roll over to your budget for the next day.
4. Check your insurance coverage
If you’re travelling out of province or out of country, it’s a good idea to have some insurance coverage in case of emergencies. You may already have coverage through your existing health benefits or your credit card, depending on what type you have. Also check whether any pre-existing medical conditions are covered.
No matter your coverage, you’ll want to check the type of medical coverage your insurance offers and also the dollar limits on medical expenses. Traveller’s insurance can also cover costs associated with trip cancellation, depending on the plan.
5. Know how your emergency fund is doing
If you have emergency savings set aside, check how much you’ve got in that account and that it’s accessible if you need it when you’re away. Emergencies can happen anytime, including on vacation. Whether you are delayed and need to book a few more nights away from home, or need to replace lost property, you can sleep better knowing you’ve got funds to pay for it.
Some credit cards also provide coverage for lost luggage, so it may help to check the fine print before you leave home.
6. Stay up to date on your taxes
If you’re travelling in the months leading up to the Canadian tax filing deadline (April 30th), there are two reasons why it’s a good idea to file your taxes before you travel.
First is financial peace of mind – if you owe taxes, you’ll be able to cover this payment before you’re tempted to break your budget while travelling. And even if you receive a refund instead of owing taxes, this will be one less thing to worry about after you get home. If you’re self-employed, the tax deadline is June 15. If you own a business, your corporate tax return is due no later than six months after the end of each tax year.
Second, if you are expecting to receive a refund, getting your refund before your vacation could help cover some of your travel expenses. It could also offer a good boost for your emergency fund or savings while you’re away.
7. Avoid questionable internet connections
It can be tempting to use the WiFi at the airport or a local café for all your usual transactions – from checking email to checking your bank accounts, and online shopping in between. But public internet connections can often be less secure, potentially exposing you to identity theft. Be cautious when using public internet connections, and reconsider using accounts that require you to enter personal information and passwords.
8. Make vacation planning part of your financial plan
If you’re saving up for a big trip, this might take more than a few months to save up for. Make it part of your plan by factoring it into your budget as well as your overall financial planning.
Saving for a short-term goal can take a few different forms, from savings accounts to GICs and more. Compare different short-term investments or speak with your financial advisor for further support.
Summary
Avoid financial stress by taking a few steps before your hard-earned holiday:
- Ensure your monthly bills are paid.
- Keep the monthly savings going.
- Know your daily spending limit on vacation.
- Check your insurance coverage.
- Know how much money you have set aside in your emergency fund.
- Stay up to date on your taxes.
- Avoid questionable internet connections.
- Make vacation planning part of your financial plan.
