Is There a Point to Saving for Vacation Right Now? Finance Experts Say Yes
When the pandemic struck this year, a lot of doors closed—in the early days, the door to board a plane and the door to your bank were among them. The devastating effects the coronavirus has wrought on peoples’ personal finances have been difficult across the board. For wanderlusters, though, missing out on the joy of traveling is proving to be an added stressor.
It begs the question: During such a fraught time, is there even a point to saving for vacation?
“Even if you cannot travel for the rest of this particular year, it’s always nice to have the resources available for when you can travel,” she says.
Saving is always a good idea because it provides the desire to make a plan and execute on it, says Amanda Clayman, a financial therapist and Prudential Financial’s financial wellness advocate.
The pandemic ratcheted up anxiety levels in many of us, but the simple act of following through on a goal is one effective way we can make ourselves happy, Clayman says. It’s a moment to take back our lives in a sense.
With over 15 years of experience working in the financial advising industry, Clayman says planning for a vacation is actually one of the first suggestions she makes to most clients. Why? A travel fund is often a reasonable goal, and one that can be tangibly earned while establishing a better relationship with money. It also lays the foundation for more aggressive and longer-term savings plans such as for retirement or paying back student loans.
Clayman suggests thinking of saving as a form of play—a mood booster on a dragging day.
“This should not be stressful. Think of this as a fun activity that you can engage in,” Clayman says.
Hill urges those who are dreaming of taking a trip when it’s safe to do so to start planning. Envision where you’d like to be: maybe an over-water bungalow in Bali or a penthouse with an infinity pool.
“The best thing to do is figure out what you want to do and how you want to experience it,” Hill says.
Then, establish how you’ll make it happen. Clayman says the best way to attack this is with a “lifestyle review,” or an analysis that determines how much money you can put aside. After taking a look at your finances, she recommends trying to make changes in your day-to-day spending. Most people, she notes, don’t think critically about their budget until something goes wrong. An easy first step is to cut out mindless spending, Clayman says. So, no more excessive online shopping derived from boredom or sadness.
While there’s no perfect dollar amount for a trip, Hill explains the experience (and your road map to getting there) depends on what you can afford, and how much time you’re giving yourself to save. The U.S. still has a long way to go before coronavirus isn’t a threat—so, one way of looking at it is that this gives you more time to save.
Clayman warns not to commit any money to travel options that are not fully refundable and flexible amid the pandemic. But even before you build up that travel savings account? Ensure you have an emergency fund in place first, she says.