A majority of Canadians are looking to travel this fall - and they're willing to go into debt while they're at it. A survey conducted online by Pollara for BMO Bank of Montreal found an astounding 77% of Canadians plan to take a vacation in the next three months and 64% will be using a credit card to pay for it. As well, 43% more people plan to travel compared to the same time last year.

Travellers are also willing to pay top dollar for the luxury. Those travelling in Canada expect to spend on average $2,563 and those travelling out of the country are prepared to spend a thousand dollars more.  With Canadians still in record amounts of debt, it's worrying that so many are planning to spend so much on entertainment.

When it comes to holidays there are some general rules we should always follow regardless of our financial situation. These will help us stay on budget and save some money when we do travel.

The Four Percent Rule

Even if we have the money in the bank, spending large amounts of cash on your holiday can undermine your financial goals. By keeping your holiday budget at 4% of your overall household income you can keep your budget on track. For example, if your household income is $100,000 then spending $4,000 a year on vacations is acceptable. Why 4%? It’s an amount of money that can afford you a decent holiday but not chip away at your long-term savings.

Buy Six Weeks Ahead

Especially if you're travelling abroad, the best time to buy is six weeks in advance and to purchase the ticket mid-week. This is when you are more likely to get the best price and selection on your ticket. Many people wait last minute to fly hoping ticket prices will come down but can be disappointed if that doesn’t happen or if the flight is sold out.  Booking your flight to depart and return midweek can also save you some money.

Use What You've Got

Redeeming your travel rewards is a great way to cut down your overall costs. The BMO survey shows more than 15% of Canadians plan to put loyalty points towards travel this fall. Nick Mastromarco, managing director of Credit Card Products at BMO says, “Leveraging reward programs is a simple and effective way to offset travel costs and increase spending power for purchasing flights, booking hotels and a number of other travel expenses.” Dig out your loyalty cards and see how many points you've collected.

Stay Close To Home If Money Is Tight

The BMO survey shows Canadian prefer to travel in our own country and across the border to the U.S. These destinations are a great option for anyone trying to keep their vacation costs down. The main saving of staying closer to home is you can drive to your destination saving money on expensive flights.

Try A Staycation

Vacation means taking time for yourself, finding a place to recharge and taking things slowly - and we can all do that at home! Staycation is a term that has become more popular in the last few years as many Canadians are having to live on less due to a job loss and rising costs of everyday items like groceries and gas. Taking your holiday at home is a great way to get the R&R you’re craving without spending any money. Spend a week catching up on your reading, watching a few good DVDs, having a picnic in the park near your house or using that gym membership that you have been paying for monthly. A staycation is all about changing your perspective when you leave your front door.

A Holiday Is A Luxury

The only time anyone should go on holiday is when you have the money in the bank to pay for it. Many of us forget this when we book our week away in the sun. We are often driven by the need to get some well-deserved R&R, rather than can rationally calculating if we can afford it.  

Rubina Ahmed-Haq

Rubina Ahmed-Haq is a financial journalist and personal finance expert with more than 15 years of experience. Her career spans three continents with appearances on TV, radio, print and online. She is the Finance Editor for HOMES Publishing. You can also read her columns in CondoLife and Active Life. Rubina runs the website www.AlwaysSaveMoney.ca. She has also contributed on personal finance matters at The Toronto Star, The Globe and Mail, National Post, CTV Newschannel, Mississauga Life Magazine, Masalamomma.ca, OurKidsMedia, CAA Magazine, South Asian Focus TV, ANOKHI Magazine, Bridal Fantasy Magazine, Canadian Running Magazine, FRESH JUICE magazine and NEWSTALK 1010.

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