As always, the first step in saving for this financial goal is to make a plan. An easy way to plan for an overseas vacation is to talk to an investment advisor about setting up a Regular Investment Plan.
This plan will automatically send a predetermined amount of money from your bank account to an investment account where it can be invested in a stock, actively managed mutual fund, or index fund of your choosing every month. A mutual fund is an investment vehicle which pools the money of many investors and invests it in a diversified basket of securities, while an index fund is a type of mutual fund which the portfolio is constructed to track a market index such as the TSX/S&P composite index.
Choose an amount of money to set aside that you can afford to live without, and set the date that money is being transferred from your bank account to a day or two after you receive your paycheques. This will force you to set the money aside before you can spend it on leather-bound books and rich mahogany.
Since your goal is stability, I would recommend having the funds transferred into a separate account that you cannot spend with the tap of a card.
Next, you’re going to want to start planning out your low-cost vacation. A great place to start is looking at Instagram for inspiration. There are a plethora of accounts that feature must-see vacation destinations; some of my favorites are @bestvacations and @vacations. Looking for low-cost activities to spend your day once you’re there? Pinterest will give you all the ideas you could possibly want.
One of the best places you should look at for booking cheap airline tickets is The Flight Deal. Next you can head over to Airbnb and start building a wishlist of affordable places to stay. If you’re willing to sacrifice comfort, you may want to consider staying in a hostel. What hostels lack in amenities, they more than make up for in price.
Another thing to consider when looking over your options is the cost of eating out. You may be better off by choosing someplace that has a functional kitchen if it means you can save money by cooking all your meals.
Once you have decided on the amount you’re going to set aside every month, and how much you’re willing to spend on your vacation, you will be able to figure out how long it is going to take to reach your goal.
If you decide on some other method for saving for your vacation, it is important to make sure your plan is SMART: specific, measurable, achievable, realistic, and time-bound. In fact, the SMART principle applies to any financial plan.
The days when seeing the world was reserved for the bourgeois have passed; today, the only thing you need to live like a global citizen is a little discipline.
Photos by Meagan Casalino
