Vacation Canceled? Use the Funds to Support Your Financial Goals
Many consumers have had their travel plans sidelined by the COVID-19 pandemic. If you had money saved for a trip this year you didn’t end up taking, you might be wondering how to best use those funds to help you reach your financial goals. Here are several constructive things to do with your unused vacation money.
If 2020 has taught us anything, it’s that we should expect the unexpected. Many Americans learned, for the first time,the importance of having well-funded emergency savings in place. If you don’t have an emergency fund, or it’s not as robust as you’d like, use your vacation money to fund it. Granted, it’s not as much fun as a vacation, but it’s hard to put a price on the peace of mine you’ll feel knowing you have money saved for emergencies.
Pay Down Debt
If you have lingering credit card debt you’ve been trying to pay down, use your vacation funds to make a dent in it. The satisfaction you get from paying down — or paying off — that debt might even leave you feeling more relaxed than a vacation would.
Add to Retirement Savings
If you’ve been wanting to open a traditional or Roth IRA but didn’t have a chunk of funds to do it, now you do! Put your vacation funds to good use by saving them for your future. No matter your age now, it’s never too early to start saving for retirement.
Most of us have spent more time in our homes this year than ever before. That means more wear-and-tear on household systems, appliances, and the house itself. Your vacation savings will serve you well to pay for necessary repairs or upgrades to make your home even more functional and comfortable.
It can be challenging to find the extra funds to put away for your children’s (or your own) higher education. The money you have saved for vacation will make a great foundation for a college fund. Look into a 529 college savings plan or another plan to help make the most of the funds.
The holiday season is quickly approaching. Rather than going into debt buying gifts and decorations, use your vacation money to pay for holiday expenses this year. You’ll enjoy the holidays so much more when you know there won’t be a debt hangover to face in 2021.
Keep it Where it Is
If your finances are in good shape and you don’t need to use the cash for anything else, keep your vacation fund intact. There will come a time when we’ll all be able to travel safely and enjoy new destinations again. Until then, you can rest easy knowing you’ll be financially ready for a much-deserved break when the time comes.