You work hard for your money, so it’s important to really experience life outside of your 9-5. Whether you decide to travel domestically or internationally, saving for a trip doesn’t have to stress you out. Instead of scrimping and saving money for one annual trip, consider investing for your trip which will yield higher returns. This approach allows your money to work FOR you rather than the other way around. Like most investment opportunities, it is important to speak with an expert. A stock lawyer can assist in ensuring you make smart investments and don’t get burned by overzealous brokers.
Saving For a Trip
You might be interested in CDs if you are thinking of embarking on a savings plan to help you finance your vacation. One advantage of CDs is that they usually feature a higher interest rate compared to the usual savings or money market accounts. Your money will be protected as it matures and the rates are usually fixed. CDs usually have a minimum amount to open. Some banks also charge a penalty if you need the money before the scheduled time of withdrawal. You may be able to get a higher interest rate at some credit unions, but there may be a qualification in order to open the account depending on the city, state or association. You might be able to bypass some of these depending on where you work. Just pay attention to the maturity dates, as if you withdraw cash before the CD matures, you’ll get hit with penalties.
The benefit to investing your funds in stocks or CDs is that the cash isn’t in front of you tempting you to use it for something else.Opening a separate account for investing in annual trips is the smart way to go about saving. Enlist direct deposit to add to your vacation account so you don’t miss the amount at all. To come up with the amount you’ll ultimately need for your trip, sit down and budget everything out. Whether you’re hitting Vegas or taking the fam to Disney, the ability to focus on a target amount is key. Don’t forget to earmark costs for:
- Car rental
- Meal plans
Once you come up with the projected cost, divide it by the number of weeks until your planned vacation starts. Now you’ll know how much you’ll need to save per paycheck to ensure a well-funded vacation.
Investing For a Trip
Savings and CD accounts are the traditional ways to build up money for a trip. But what if you went about it differently and invested the cash instead?
Rather than adding money to your savings account to build up a vacation fund, consider investing in the stock market. Rather than save $1,000 for a small trip, you could invest $20,000 at a conservative 5% and take a “free” trip every year. You still keep the $20,000. $20K x .05 = $1000.Not only have you made a smart investment, you’ve got plenty of money to take that trip you’ve always wanted. Best part is, you didn’t have to work extra hard for it! This is a great example of letting your money work FOR you rather than against you.
When buying or selling stocks, it’s wise to inform your stock lawyer like Thomas Law Group, who will ensure that you are not losing money in the market due to a fraudulent broker.