One of the biggest effects of the coronavirus pandemic has been the drastic reduction in people traveling. Countless business meetings have been canceled, weekend trips have been abandoned and most people are working from home instead of driving to and from the office. Perhaps most significantly, though, most people’s vacation plans have been scrapped, at least until next summer.
While abandoning summer vacation plans can be disappointing, to put it mildly, there is one significant upside: you won’t be spending any of the money you were saving for the vacation. That means you have a few hundred, or even a couple thousand dollars saved that you can put to use somewhere else. Here are some of the best ways to the money you were going to spend on a vacation.
Save Your Unused Vacation Money
This is the easiest option, especially if you plan on using the vacation money to fund next year’s vacation. While you can always keep your money in a traditional savings account, you can also put the money in a club account to ensure it doesn’t get touched until next year’s vacation, or you can store it in a money market account to earn more interest.
Invest Your Vacation Money Instead
If you’re willing to put in a bit more work, though, you can invest your vacation money for a year and get a higher rate of interest. You can put your money into a 12-month CD and collect it in time for a vacation next year.
Of course, you’re not limited to only using your vacation money for a vacation. You could also put the money into an IRA to give your retirement saving a boost or put your money into a 6-month CD to help defray the cost of holiday shopping.
Use Vacation Money to Pay Off Debts
Another good way to use the money in your vacation fund is to pay off your debts. Start by paying off the debts with the highest interest rates (usually credit cards), then move on to other loans. While this may not be as exciting as going on a vacation, the sense of relief you’ll feel once you’ve paid off a debt or two is worth it.
Put Unused Money Toward Another Project
Most people have a few large projects that they’re working toward, whether it’s remodeling the bathroom, buying a new washing machine or learning a new skill. Using your vacation funds to add value to your home can be an excellent choice. You can use your vacation money to fund these projects, and once the project is completed, you can use the money you were saving for these projects to fund your vacation next year.
Use The Vacation Money for Another Family Activity
Vacations are family activities, so why not use the money to do something nice for your family? Plan a staycation. You can buy some board games and have a gaming tournament, buy some camping equipment and go on a backyard camping trip on the backyard, or even rent a boat and go out on a lake for a day.
Spend Your Unused Vacation Money
When you get a windfall, your first impulse is usually to spend it. While you probably don’t want to spend all the money you saved up for your vacation, you might want to allocate 10% of it to buy something nice that you’ve always wanted. It’s a good way to prevent yourself from feeling deprived, especially if you want to save the money for next year.
Put Your Unused Vacation Funds to Good Use With First Alliance Credit Union
While not being able to go on a vacation can be disappointing, it does leave you with some money that can give your finances a much-needed boost. You can put the money to work for you in several ways, from financing needed expenses and paying down debts to spending some quality time with your family.
If you want to use your vacation fund most effectively, become a First Alliance Credit Union member today. You’ll be able to put your money into a savings account, club accounts, health savings accounts, an IRA or a Certificate of Deposit (CD).
Want more information on how to use a windfall? Listen to this episode of our Good Money Moves podcast talking about smart ways to use your tax refund.