Make your next family vacation debt free

Tammi Roy was excited about the prospect of travelling the Rockies with her husband and three kids last year. She also knew that touristy spots like Banff and Jasper, though gorgeous, can leave visitors feeling gouged. So when the money-savvy mommy blogger was planning their vacation, she factored in every last potential twoonie they’d spend to avoid sliding into the red.

“We not only looked at the set cost of our trip but also at any costs that would come up while we were away, because unbudgeted expenses can add up,” says Roy, who blogs at My Organized Chaos. “We made sure to budget for daily activities, taxes, tips, and snacks, and we also had a small contingency fund in case any additional or unexpected expenses came up.”

Besides tracking her family’s expenses while they’re on the road, the Red Deer, Alta., mom also puts some money aside every single week for the family’s travel fund, even if it’s just a small amount.

But not all Canadians are such smart savers. While more than 90 per cent of Canadian parents are planning a family getaway this year, nearly half (49 per cent) say they won’t save enough money to cover the cost of their vacation, according to a recent TD Canada Trust poll.

Furthermore, 35 per cent save only some of the cost and 14 per cent don’t save anything at all, using credit instead.

But with a little foresight, it’s possible to have a debt-free vacation. Consider this: start now, and a trip in mid- to late-August — just four months from now — can go down without your credit-card bill going up.

“Set up an automatic weekly deposit into a savings account to help you save without thinking about it,” advises Stephen Menon, TD Canada Trust’s associate vice president of credit cards.

According to a Leger Marketing poll conducted last year, the average spending target for Canadians travelling in the summer months was about $1,700.

Depending on your travel plans, here are a few examples of how much you will need to save each week to travel 16 weeks from now:

• $600 for a long weekend at a hotel: save $37.50 each week

• $1,000 to rent a cabin for a week: save $62.50 every week

• $2,000 for flights for four to visit family: save $125 each week

Here’s another way to look at saving, from TD Canada Trust’s Affordable Family Travel Guide: Say your dream vacation is going to cost you $5,000. Give yourself six months to prepare, and you’ll need to save $192 a month. Start planning a year in advance and save $92 a month. If you start saving two years in advance, you’ll need to put aside $48 each month.

Budgeting is in the details

As Roy noted, it’s not enough to jot down big expenses like flights and hotels. To make sure you don’t go overboard, you need to get down to the nitty-gritty: the price tags of souvenirs, snacks on the airplane, tickets to attractions, travel insurance and the like.

The TD poll found that Canadian parents ranked shopping, taxes and fees and food as the top unbudgeted costs of a family vacation.

“As smaller expenses can quickly add up, it’s important to capture these costs early,” Menon says. “It comes down to saving early and budgeting accurately.”

Be careful during the lead-up

“Try to reduce discretionary spending like eating out or going to the movies to make it easier to save the right amount each week,” Menon suggests.

Roy also gets the whole family involved in saving for holidays. “Saving and budgeting for our vacation was a great way to help teach the kids financial responsibility,” she says. “The kids actually save money in their piggy banks now for family trips ... And sticking to the budget really helps set the stage for the next family trip because you know it's a realistic goal."

Stretching your dollar with reward cards

Canadian parents use their credit-card travel rewards, with 46 per cent redeeming rewards in the past year, 39 per cent collecting extra rewards prior to travelling, and 33 per cent booking vacations with their travel rewards credit card to access free trip-cancellation or medical insurance.

To boost your points, charge everything on that rewards card, from monthly utilities bills to daily coffees. Just remember to pay it off every month.

Benefits of being thrifty

Other tips to stay on budget? Roy suggests bringing essentials form home — diapers, wipes, individual water bottles, snacks, toys -- to avoid having to restock on the road. And research restaurant menus and other deals in advance; some places allow kids to eat or stay for free.

“Having a budget allowed us to focus on having fun instead of worrying about the cost of the trip,” Roy says. “With proper planning and finding ways to cut the costs, it actually makes the trip more fun. The entire family had a wonderful time, and mom and dad were happy because we weren’t paying for the vacation long after it was over. This meant that we could literally start planning the next family trip as soon as we got home.”