Huh? I hear you asking. Most parks are closed for the winter. Even the year-round parks are having their lowest attendance of the year. Most parks already have announced their new ride for the 2010. How can this time of year be so important?
Because it is the time of year that can make or break your financial ability to go on the theme park vacation you want next year. Spend foolishly now, and holiday bills will sap your bank account throughout 2010, leaving you unable to afford the vacation you want.
But save wisely now, and you'll be enjoying a stress-free theme park visit in 2010 - paid for by money in the bank.
How can you make that happen? I've enlisted the help of the Web's premier personal finance expert, Liz Pulliam Weston, who joins us on Theme Park Insider for our Guest Q&A today.
I worked with Liz for a short time when we were both at the Los Angeles Times. She, of course, went on to bigger and better things. Today, Liz Pulliam Weston is the Internet's most-read personal finance columnist and the author of "Your Credit Score: Your Money and What's at Stake." You can find her online at MSN as well as on her personal finance blog.
Robert: We've long advised our readers to save in advance for their vacations, rather than borrowing the money by paying with credit cards. (Cards are okay, especially if you are earning points, but only if you pay the balance immediately.) But *how* should people save? Their regular bank account? A special account? A jar in the kitchen? (Hey, seeing that jar everyday would provide motivation....)
Liz: Indeed it would, although I’m thinking of that sequence in the movie “Up” where they keep breaking into their jar to pay for life’s various setbacks! Any time you put money aside, you’ll be tempted to spend it, especially if it’s right under your nose.
So set up the jar for the occasional small family contributions. But also set up an automatic transfer from your checking account to a savings account. I’m a big fan of online banks’ savings accounts. They tend not to have minimum account balances or monthly fees, so your money is left alone to grow. It’s really easy to set up a transfer from your regular checking account, and it’s a little bit “out of sight, out of mind,” since you’re not seeing the balance every time you check your regular bank accounts.
Robert: What are a few, relatively simple things that readers can do to save a few extra bucks each day, money that they can then save for a vacation, or whatever other goals we have?
Liz: There are lots of things you can do to trim your budget, including stuff that you might not want to do forever, but you can do for a short time because you know it’s getting you closer to your goal.
The typical family spends thousands of dollars a year on eating out. Anything you can do to trim that bill will help. We’re all busy, so one of the easy ways to cut the food bill is to make double portions when you cook and freeze the excess for a later meal. Also, shop using the weekly ads. The items featured on the first page are often the store’s loss leaders. Plan your meals around those cheaper items, have one meatless meal a week, pack lunches, snacks and drinks and you’ll save a ton of cash. Sites like CouponMom.com can help alert you to the really big sales and show you which coupons to use to get the maximum discounts.
You can save a small fortune by giving up a habit. Some are easier to shed than others. If your family drinks a lot of soda, switch to tap water. If you’re a drinker of alcoholic beverages, cut back there. If you’re a smoker, ditto. Keep a picture that represents your vacation on your fridge so you can remind yourself why you’re making this sacrifice.
Another big money-sucker is your television. Most people pay for cable or satellite and many pay for extras, such as premium channels and movies on demand. But unplugging the tube for a few months can save you money in other ways, since you’re not constantly bombarded with ads that are expertly crafted to make you want to buy more stuff you don’t need.
Whatever expense you trim, it’s really important that you divert the money you save into your savings account. If you don’t, it will just get spent on something else.
Robert: What are the biggest rip-offs in travel expenses these days? (Unnecessary fees and charges that too many people end up paying for?) How can we avoid them?
Liz: We could write a whole book about that, couldn’t we?
People really get clobbered on fees when they’re not prepared. Some don’t realize that most airlines charge for the first checked bag now. Others don’t weigh their luggage before they go and get smacked with overweight fees. Or they think they can still get a drink or a snack on the plane, not realizing they could blow their whole food budget for the day before they ever get to their destination.
My advice these days is to expect to pay for everything (except maybe to use the bathroom, although that may change). Make sure you bring your own meals, snacks, entertainment system and headphones. These items are helpful for any mode of travel, but especially airplanes, which charge for almost everything that used to be free.
And prepare for the worst. I always stash a few Zone bars in my purse and carryon, in addition to whatever food we’re carrying, in case the trip takes longer than we think. If you’ve got a baby, bring four times the number of diapers you think you’ll need. Just think about those folks trapped on airport tarmacs for 9 hours.
The rental car counter is the place where some of the most outrageous fleecing takes place. You can’t do much about the various taxes they pile on (although it’s awful that visitors get tapped to pay for facilities that benefit locals far more, such as stadiums). But if you have a gold or platinum credit card and decent auto insurance, you can waive the add-on insurance. The up-sell can be relentless at the counter, so try to figure out in advance what you need for your trip and resist the efforts to get you to spend more.
Robert: Okay, the flip side: Are there any seemingly extra expenses associated with vacations that many people skip but really shouldn't?
Liz: The whole flying experience has become so grim that sometimes it’s worth paying a few fees to have a better experience. If you’re traveling with family, for example, pay to check your bags. It’s so much better than trying to drag everything through security and then find space on the plane.
Because I travel a lot, I also think it’s worth investing in a pass to an airport lounge. I can use it to get business stuff done when I’m traveling on my own and it provides a little sanctuary when traveling with my family.
I’d also budget for at least one meal out a day, even if you’re making food the rest of the time in your room. Chances are it’s Mom making all those meals, and she could use a break.
Robert: What's the better "bang for the buck"? A single, big vacation during the year, or several, shorter "mini vacations"?
Liz: I’m a big fan of little get-aways, because coordinating more time off is tough with our family schedule. But we still try to get in one longer vacation at least once a year. You need more time to really get relaxed. And I think we should try for one really “big” trip—either a foreign locale or a trip that takes more than two weeks—every few years if we possibly can. Those big trips create lasting memories and can give you a whole new perspective on your life.
Robert: Is there any difference between using a credit card or a debit card on vacation? If so, which should vacationers use?
Liz: The only time I pull out a debit card on vacation is to use it at a bank ATM to get cash for tips and taxis. Everything else goes on the credit card.
A debit card helps keep you from overspending, but it’s tied directly to your checking account. If a bad guy gets hold of the card or the number, your account can be drained in seconds, and it can take days if not weeks to get the money back.
That’s a huge contrast to a credit card. If your credit card is compromised, you don’t have to pay the charges. You’re issued a new card and life goes on.
Also, the credit card serves as a middleman if there are any problems or disputes with what you buy on the card. Things can go wrong on vacation and I like that extra layer of security knowing I have a “court of appeals” if I don’t get what I paid for.
Robert: How can readers motivate their kids to become savers in advance of a family vacation?
Liz: The coin jar/piggy bank approach works really well. I think kids should have an allowance as soon as they understand money buys stuff, and we can encourage them to set a portion of that allowance aside for the trip.
But I’d also encourage them to raise money for their vacations. Have a lemonade stand, walk the neighbor’s dogs, mow lawns, whatever. That gives them experience in being entrepreneurs and shows them that if they want something, they can create the money to get it.Tweet
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