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Smart Vacation

It’s that time again: time for eating watermelon, chasing down Popsicle trucks and catching fireflies. School’s out and days are longer. In our hectic, non-stop lives, we’re really ready for some quality R & R. We’re ready for vacation!

Looking back, many of our fondest childhood memories were summer road trips, family excursions to theme parks, camping trips or visiting relatives in far-off places. As parents, we want our children to have those same memories, and we want to spend some quality time with our children without the interruptions of our normal busy schedules. So the question on everybody’s mind is, “What shall we do for vacation?”

But from my perspective, as a financial literacy educator for many years, I’d tell you that the better question is, “What shall we do and how shall we pay for vacation?” Because, honestly, a wonderful vacation that puts you in hock, adding stress to your already stress-filled lives isn’t all that wonderful, is it?

The solution is not to deny yourself and your children some well-deserved fun and relaxation. It’s now common knowledge that vacations are not just self-indulgent luxuries but actually contribute to our overall health and well-being. It takes a little creativity and some planning, but the satisfaction of taking a rewarding vacation within your means and without sabotaging your financial goals is well worth it.

To give you some inspiration on how to do this, I surveyed my community to get their best tips. Here are some of their ideas:

Pay with Credit and Pay It Off
This strategy starts with a wise choice in credit cards. Find one that pays you in airline miles or cash back, or both. Also make sure that your credit card does not charge interest or finance fees if you pay it off every month. Next, save up for the trip before booking it, charge it on your card then pay it off immediately – preferably before you leave! Here’s how one Bank On Yourself Community member, Barry Levy, did it:

“I am planning a trip to Costa Rica to see the rain forest, turtles, zip line and enjoy the tropical splendor of the area,” says Levy. “It took two months to put aside the vacation funds so I had no problems putting it on a credit card. That way I get cash back, miles back and if a credit card is paid each month in full, it has no interest costs to me or finance charges.”

Originally, Levy had considered going to the Great Barrier Reef. When he priced that trip out, he realized he needed more time to save for it. So rather than over-extending himself, he chose to put the Australian trip off until next year, and will use the same strategy. Also, by playing his credit cards right this year, he should have enough airline miles to cover his flight to Queensland!

Take a Stay-cation
Several Bank On Yourself members talked about the fun of a well-planned “stay-cation.” Of course, staying home rather than going somewhere saves beaucoup bucks in travel, accommodations and food expense. But to get the real benefits of a great vacation, you can’t just stay home doing the same-old, same-old. You need to get creative and make it special for everyone.

For example, I heard of one family that held a three-day “summer camp” for their kids. They invited a few other children over and pitched tents in the backyard. Other parents rotated in to play camp counselor, bringing crafts or games during the day. The family set up a small barbeque to roast marshmallows, and all the moms and dads joined in to sing and tell stories around the “campfire” at night.

Another family chose to explore their own community for a week. Each family member got to choose the excursion or event for the day that was within a 20 mile radius. They ended up visiting a local candy factory, a nearby dairy farm, and the local theme park (twice!). They hiked a local nature trail and took a picnic along. One day, the family split up with mom going to a local spa, dad playing golf, and the children swimming at a friend’s pool with a caregiver. What fun excursions are right in your backyard?

As Bank On Yourself member John Starcevich puts it: “My wife and I go on a “vacation” a couple of times a week. We are lucky to have a great backyard and we enjoy it often. We love our lives and have no need to get away and take a traditional vacation. It saves a lot of money when you are satisfied and thankful for what you have.”

Plan Ahead with Spare Change
It may be a little late to implement this particular strategy for this summer’s vacation. But summer comes every year, doesn’t it? How about starting your vacation planning for 2016 now like our Bank On Yourself superstar Brenda?

Brenda said, “I decided that for my 50th birthday I was doing something special. So I will be flying to Rockland, Maine and getting on a schooner for a cruise up and down the coastline. I have already purchased my plane tickets and my cruise package. Buying them early saved me a lot of money and booking my cruise for my birthday saved me 25 percent off my price.”

Brenda has also saved all the change in tips she earned as a waitress for the past two years. “I didn’t miss it. I never counted on that money to help pay the bills,” she says.

Now that she has her trip completely paid for, she’s saving that “spare change” tip money for spending money for the trip. By pre-planning and consistently putting aside little bits, Brenda is giving herself the vacation of a lifetime. She says: “This is something that I’ve wanted to do for years. I’m afraid of water and told myself that I could either get over my fear enough to do it or just forget about ever doing it. I decided that I could do it.”

Make this a family project. What dream vacation would you and your family love to take? If the children are old enough, let them help figure out the trip and how much it will cost. Then put your heads together as a family and decide what “spare change” you’re willing to commit to the effort. Chart your progress and get the satisfaction out of creating this dream vacation as a team.

Borrow from Yourself
One of the favorite ways our Bank On Yourself community pays for vacations is by borrowing from their Bank On Yourself plan. These are specially designed dividend-paying whole life policies with additional little-known features that make your money in the policy grow up to 40 times faster than the kind of policies most financial experts know about. When set up correctly using the right companies, these policies allow you to borrow from your policy – and your policy continues growing as though you never touched a dime of it!

Alan Twelkemeier and his wife used this strategy to take their first real vacation in eight years! “The first way we used Bank On Yourself was to take a vacation to Mexico. This allowed us to do it guilt-free.” Unlike borrowing from a 401K or depleting savings, the Twelkemiers continued to earn interest and dividends on the money they borrowed from his whole life insurance policy. He and his wife set up a plan to repay their policy loan over a one-year period. At the end of the year, that money will all be back in their plan, allowing them to recycle those dollars and take guilt-free vacations every year for the rest of their lives.

As comedian Milton Berle said, “Laughter is an instant vacation.” And when you take that great vacation you can really afford and fund wisely, you and your family will be laughing all the way to the bank – your “bank” – in your flip flops!

Pamela Yellen is the author of New York Times bestseller “BANK ON YOURSELF: The Life-Changing Secret to Growing and Protecting Your Financial Future.” Learn more at

1. Try to book a hotel room with a microwave and fridge if possible—a lot of hotels include this upgrade for free. If you have a microwave and fridge, you can save money on expensive meals out. Bring bread, lunch meat, fresh fruits and veggies to snack on, and then you will be able to save money for nicer or bigger dinners with the whole family.
2. Slow down! You might be able to plan a hike, bungee jumping, theme parks, and a nice dinner into one day as a couple, but when you have the whole family the pace will be different. Instead of stressing yourself out about not making it to each stop on your itinerary on time, try to slow down and plan for only what you think your youngest child can handle.
3. See a doctor before your trip and make sure to bring a first aid kit. So many amazing vacations can be ruined by a stomach bug or a cold, and yes: you can get a headache even in paradise. Combine that with your changing schedule on vacation and you have a recipe for disaster, so make sure to bring any medications you may need, like tummy medicine or headache medicine. You also should visit a doctor any time you plan to leave the country to make sure that you have all of the proper vaccinations.
4. Whether on a road trip or a flight (no matter how short) bring a change of clothes and have them readily available for you and your baby. Being stuck in a car or plane covered in spit up is no way to start (or end) a family vacation.
5. Remember to see your vacation through the eyes of your kids. What might seem fun to an adult may not always be that fun for the kids. Make sure that everyone gets to have a good time and plan to visit places where they can make lasting memories.
6. Work with your child’s routine, not against it. Do they usually take a nap at 2? Then it is probably not a great idea to plan a tour of the Louvre at that time. Vacations tend to disrupt our usual schedules (which can be great, especially when it means you get to sleep in), but remember that your child has a harder time adjusting than you do.
7. Plan the trip as a family. It can be tempting to try to map out every aspect of the trip before you even tell your kids that you are taking one, but let them get involved. When you have teens, they can sometimes lack enthusiasm for the family vacation since it means sacrificing time with friends, but if you let them get involved and let them help choose aspects like activities, restaurants, or even the destination, they will feel much more excited about the trip.
8. Plan relaxation days. This is easier if you are planning to vacation somewhere tropical, however a lot of times we tend to try to pack our schedules with activities so we can get the most out of our trip. The problem is, when you are going non-stop, both you and your kids can hardly enjoy any of it. Instead, plan relaxation days, or even just relaxation times. Have at least one day where you have nothing planned, and let the day take you where it wants to take you—be that a nice long nap or going for a leisurely stroll.
9. Don’t forget to pack toys and entertainment for the little ones. When you are trying to pack light, don’t throw the baby out with the bathwater (meaning, try to remember that toys are actually a necessity). Crayons, coloring books, puzzles and tablets or portable DVD players can make long car trips and flights much easier for everyone.
10. Stay organized throughout the trip! This may seem impossible, especially with little ones, but remember to try to keep all of your documents (like passports, driver’s licenses, and medical information) together. This can make it so much easier when you are trying to get through airline security or even just trying to find your ID if you are picking up fast passes at a theme park (staycations need documents too!).

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