The Easiest Way to Save Up For Your Annual Vacation

I’m constantly amazed how quickly we’ve replaced spending on things with spending on experiences.

One big reason for this is the rise of Facebook. As we scroll through our feeds, we see friends who have spent time in all sorts of exotic locales. Their pictures are beautiful, always filled with smiles. These same friends gush about their vacations when they get home. “The food was amazing! The scenery was breathtaking! The hotel was phenomenal!”

It’s little wonder people so desperately want to travel the world when they’re up against that. Some of us take it to a new extreme, quitting our jobs to pursue a life of full-time travel, even if it is temporary. Most do things a little more responsibly, choosing instead to contain our travel to a two-week window of allotted vacation time.

Many of us have trouble saving up for a vacation, so we finance it instead. That’s a terrible idea. Even a $1,000 vacation financed at regular credit card rates can cost $1,200…$1,500…or even more before it’s paid off.

That’s not what you want to do.

If you’re having trouble saving up for anything, try this trick.

Brown bag your lunch

It doesn’t seem like a big change, but packing your lunch can add up to some serious savings over the course of a year.

Say you’re currently spending $10 on lunch out every day at work, while you could pack something for $3. That translates into savings of $7 per day, or $35 per week. Based on a 50 week annual schedule, that works out to $1,750 in annual savings.

That might not be enough to finance an entire exotic vacation, but it’s a nice start. It’s definitely enough to pay for a week away that’s a little closer to home.

Even if you just eat in four days a week and go out with your office buddies each Friday, it still adds up to significant savings. You won’t quite end up with $1,750, but you’ll still save $1,400.

The powerful reason why

We’ve all heard about the latte factor, which states that little recurring expenses have a way of really screwing up your budget. The latte factor can mean different things to different people. Some people might drink a lot of alcohol. Some might buy too many clothes. Or some might go out to eat too often.

The solution is usually pretty simple. Figure out what you spend too much money on, and cut it out. Or at least reduce it quite a bit.

There’s a problem with that. Restricting ourselves doesn’t generally work. There’s a reason why we crave whatever our latte is. We enjoy it. If we start telling ourselves we can’t have it, guess what we’re going to want even more?

Brown bagging our lunch is a little different. Yes, you are restricting yourself when you do it. But you’re also giving yourself an opportunity to really think about the benefits of doing so.

If you sit at your desk brooding about how your lunch sucks, this plan has no chance of succeeding. You’ll talk yourself into going back to Wendy’s or Subway in no time.

If you take the opposite approach, it’s got a great chance of succeeding. Thinking about your next vacation while munching on your 132nd consecutive sandwich will make the sacrifice seem worth it. You’re making yourself uncomfortable for a specific reason, not because it’s the right thing to do.

Tricking ourselves 

The average person is terrible with money. They need tricks like this to get them to save.

It’s even valuable for those of us who already save a big portion of our income. Saving 10% is great. Saving 15% is even better, especially when you can do so without changing your life in any big way.

A big part of saving is tricking ourselves. Try it today and see how far it gets you.

4 Easy Ways to Save on Your Cell Phone Bill

It’s amazing how quickly we’ve all become addicted to our smartphones.

I didn’t even own a cell phone until 2006. Ten years later, I’m officially a smartphone junkie. Whenever there’s a lull in the conversation for even a millisecond, I’ve got my phone out of my pocket looking up the latest nonsense happening on Twitter. How anybody killed time before having a smartphone is a mystery that’ll never be solved.

With our fancy cell phones come a big financial commitment. People routinely spend at least $100 per month on talk, text, and data plans. I find this preposterous. There’s no reason to pay that much, yet millions of Canadians do.

Here’s how you can save money on your cell phone bill.

Shop around

I’m amazed at the number of people who refuse to go with one of Canada’s low-cost cell phone providers, choosing instead to give their cash to Telus, Bell, or Rogers.

Switching to Fido, Koodo, Virgin Mobile, Public Mobile, or any other discount carrier is an easy way to knock $10 or $20 per month off your bill. The best part? These discount carriers are owned by the big guys and use the same network. I’ve been a Koodo client for about a year now, which is owned by Telus and uses Telus’s network. I’ve never had an issue with signal quality or dropping calls.

If you insist on going with one of the “big three”, make sure you go with the one that provides other services so you can at least get a bundle discount.

The best time to shop around is during the holidays. That’s when all the providers are trying really hard to woo new customers, since it is their busiest time. You’d be surprised how many people give the gift of a recurring liability to their loved ones.

There’s one problem with shopping around. You can’t do it while on a contract. Which brings me to the second way to save money.

Don’t get a contract

On the surface, getting a phone contract is a great deal. The phone company lets you buy a piece of technology interest-free in exchange for committing to use their network. Anytime somebody lets you use their money for free, you should do it.

But there’s one big problem with having a contract, and that’s the inability to switch to a different provider. You can’t take advantage of exclusive deals for new customers if you’re forced to stay with one provider.

The other thing the phone company counts on is you forgetting about the contract. Some providers are nice about it and only charge extra for the amount of time it takes to pay off the phone. Others aren’t, and will hold you to a more expensive contract as long as you’re a customer.

Monitor usage

I’d be willing to bet that 80% of us regularly don’t even get close to using our data caps.

I realized this a couple of years ago. I had two gigabytes of data as part of my plan. After looking at my usage for the previous six months, I discovered I never even got close to using all my data. In fact, I hadn’t even gone past one gigabyte. I immediately downgraded to an inferior plan and saved $10 per month.

It’s the same thing with unlimited minutes. I hate talking on the phone. If somebody calls me, I’m doing my best to shoo them away. My voicemail tells people that they’re far more likely to get a response if they text or email me.

So why would I have unlimited minutes? There’s no good reason for it, so I dropped that part of my plan too.

Even if you go over one month, the penalties for doing so are less than if you’re continually paying for service you don’t use.

Call and complain

Many people who are happy with their providers don’t really want to go through all the hassle of changing. But they’d like to get the same kinds of deals as new customers. What’s a person to do?

The answer is simple. Just call into your provider and ask for a better deal.

You’re not likely to get much with the first person you call. Front-line customer service reps have very little freedom to offer anything but a token amount. Ask to be transferred to a manager or a someone in the customer retention department.

These are the people who can help you. You might have to threaten to leave to really get the ball rolling though.