April Challenge�Get a Head Start on Your Next Vacation

This month's reader contribution, about vacations, really appealed to me. No matter when you plan to vacation, the key is to plan. That includes accounting for your expenses before the trip, as reader Steve, from Oklahoma City and a member of Oklahoma Employees Credit Union, recommends. He writes:

Every year we start saving for our next vacation as soon as we return from one. Each month we transfer a fixed amount out of our checking account into a credit union money market "vacation account" that receives a higher rate of interest. My wife and I agree to use this account only for vacation savings.

Right away, we see that Steve emphasizes getting agreement from the family. For any successful family budget goal, you have to have buy-in. Steve goes on to say:

In addition to our monthly transfer, we have an agreement to deposit every gift of money we receive�from Christmas, birthdays, whatever�into this account. The same goes for any rebate checks we receive from product purchases during the year. Basically, every little "extra" check we receive goes directly into this account.

"We are able to save a lot more money that otherwise would just be squandered on incidental expenses."

There's more from our friend Steve: He and his wife also put all their spare change, every day, into a vacation piggy bank, and top it off from time to time with an extra 10 or 20 dollar bill when they're a little flush. They deposit that money every few months back into their vacation money market account. They call this "sweeping the gold dust out of the corners."

There's still more�Steve and his wife pull money out of their money market account every so often and put in into a short-term share certificate/CD (certificate of deposit) to get an even higher yield. He says they often have CDs maturing almost every month that they can deposit into their money market "vacation account" as their vacation date draws near.

Smart savings tactics for any goal

Steve and his family are doing several smart things that you can apply to any savings project:

� They have a goal�to vacation without borrowing money

� The goal has a deadline�the next vacation

� They automate their savings�we've talked a lot about how much more people can save when it's automatic and not random

� They agree on the strategy and work together

2008 Financial Fitness Challenge

Complete prize rules are here. We'll share another prize-winning idea next month.

ST
Susan Tiffany, CCUFC
[email protected]

Published April 1, 2008