Ah, summer. The kids are out of school, the weather’s warming up, and you're planning that family getaway where you can finally spend some time with your loved ones and just relax. But then there's the bothersome question of budgeting and paying for the trip, and making lasting memories without breaking the bank. After all, family vacations should be about recharging, not worrying about family finances for weeks afterward.
According to the latest American Express Spending and Saving Tracker, the average expected cost of a vacation this summer is about $1,000 per adult, meaning that a family of four could easily wind up paying anywhere between $2,500 and $4,000 for some time spent away. That’s a seriously significant expense for the vast majority of families. Since a recent USA Today article points out that one third of U.S. adults have nothing in retirement savings, I imagine many families are having a difficult time setting aside money for big family trips. This likely means many of these families will be financing their trips with credit cards, or even worse, with 401(k) loans (which, unfortunately, really happens).
I certainly appreciate the value of a family vacation, so I'm here to help. If you want to make amazing memories with your family this summer without the stress of depleting your finances, try these 3 tips for enjoying your summer vacation — and leaving financial anxiety behind.
1. Make the Most of Deals and Discounts
Daily deal websites Groupon and Living Social have designated travel sections that boast national and international trips at 30-75 percent off full price. The Price of Travel, a database of travel costs for more than 110 cities worldwide, tested both Groupon and Living Social to see if their deals were worth it. The promised savings weren’t always fully realized, but in most cases travelers still received significant discounts compared to what’s available elsewhere.
I’m sure you’ve heard stories about deals that don’t live up to the hype, but these websites are worth checking out for a chance to save hundreds or even thousands of dollars on your summer vacation. Spending a few hours doing some homework on what deals are available to you and your family can save you from spending more than you have to in the long run.
2. Cash in Points From Reward and Loyalty Programs
According to one CreditCards.com report, 48 percent of credit card rewards holders in 2014 planned to redeem their rewards for summer vacation. These rewards and points can be a nice tool for lessening the financial burden of family vacations, so long as you're responsible about using them. Rewards cards can be found practically everywhere, from airlines and gas stations to hotels and even destinations (such as Walt Disney World, Sandals, Royal Caribbean, and Carnival). The key is to be smart about using them, so here are some things you will want to consider:
- If you’re not particularly loyal to one airline or hotel chain, specific branded rewards card likely are not worth it. To maximize the benefits, pick a rewards card that suits your current lifestyle and shopping habits.
- Read the fine print to make sure you understand the terms and conditions. For example, some cards require a minimum spending amount or time limits on cashing in rewards. Get all the information upfront so you won’t be surprised later.
- This last one’s important. You MUST pay your card balance in full — EVERY MONTH — to avoid paying interest. The benefits of rewards programs are never worth going into debt, which can severely limit your family's future vacation potential.
3. Stay Local to Save on Airfare
Unsurprisingly, airfare is usually the most expensive part of taking a vacation. The average price of round trip flights for advance purchasers (i.e., tickets bought more than 21 days in advance) is over $500, according to a report from Expedia and the Airlines Reporting Corporation.
The good news is you don’t have take to the skies to have a good time this summer. Southern California has a number of beautiful and exciting attractions and destinations within driving distance, including Los Padres National Park, Crystal Cove State Park, and many more. By opting for shorter trips over long weekends in lieu of the traditional week-long vacation, you can even save enough cash to have more than one vacation!
When you take a family vacation, it should be the incredible memories you make and share with your loved ones that you get to reflect on afterward, not the troubling bank statement. If you haven't been able to save up the requisite funds for a big trip this year, you still have plenty of options for enjoying time with your family. Here’s a tip for next year, though: begin saving NOW by opening a savings account to be used expressly as a vacation fund. Set up automatic transfers of a small percentage from each paycheck to consistently add to your savings over time. Trust me, next year’s trip will feel even better when you can pay for it all up front.
I wish you all wonderful and memorable summer vacations!
Planning on taking a summer getaway this year? Have any savings tips to share? Join the conversation by tweeting @Lindsey2Wealth!