How to Use Your Bank’s Products and Services to Save for the Vacation of a Lifetime

Written by , March 10, 2014

How to Use Your Bank’s Products and Services to Save for the Vacation of a LifetimeOver the past decade or two, vacations have become something of an afterthought for many individuals and families. Certainly increased job and career time commitments are one factor leading to less frequent vacations. But another element of taking fewer vacations is simply not being able to afford it.

Fortunately, most of us realize it’s never a good idea to go into debt in order to take a vacation. Knowing that you’ll have to repay the cost later will always be in the back of your mind, so borrowing makes it difficult to get the most enjoyment out of your vacation. The only way to ensure a vacation is to save for it.

Here is some banking advice to help you save for that special vacation.

  • Separate Accounting. For some people, the simplest solution will be sufficient. This involves using your existing checking or savings account to save, but keeping track of how much of your total account balance is for your vacation. You can keep your records in a notebook, computer spreadsheet, on your smart phone, or using whatever other tool works best for you.
  • Separate Savings Account. However, some people might find that they can’t keep track of a separate balance in their existing account, or that the temptation to spend the money on other things is simply too great. For many of these individuals, the solution may be to open a separate savings account at their current bank or credit.
    • With a separate account, it’s easy to link it to your current checking and/or savings accounts, so that you can quickly and electronically make deposits into your vacation fund. You can also limit your own ability to use your vacation savings for other purposes by not keeping any debit cards or checkbooks that come with the account in your wallet or purse. It’s important to note that this separate savings account should not involve any fees or charges that would in any way reduce your savings.
  • Short Term Bank CDs. If you’re concerned that you still might be tempted to use funds from a separate savings account for casual spending, you can take things a step further and use short term bank certificates of deposit as your vacation savings vehicle. Most banks offer CDs for very short terms (sometimes as low as 30 or 31 days), so it will be easy to time the maturity of these CDs to match your vacation plans.
  • Vacation Club. Some banks and credit unions even offer special “vacation club” savings accounts. These are generally no fee accounts that require you to automatically deposit a certain amount each month, and the deposit can be accomplished from an automatic transfer from your savings or checking account. The primary advantage of this type of arrangement is that it automates the savings process (which is always a good idea), and allows you to plan exactly how much you need to save each week or month in order to reach your vacation savings goals.
  • Without the time to refresh and recharge, and to reconnect with our families, it’s easy to get burned out at work and have our performance suffer. Use the tips above to save for your next vacation a lifetime, and you’ll be able to enjoy it fully.

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