Real Simple: Canceled a Trip This Year? Here Are 2 Smart (and 2 Fun) Things to Do With Your Unspent Travel Money
September 9, 2020 — Reporter Marisa Casciano writes, “It’s the year 2020. International borders are closed, airports are empty, and you’re sitting at home with your suitcase and passport wondering, what now?
“That question is starting to feel rhetorical—as if it’s activating a real-life Jumanji board or setting up a catchphrase in an infomercial. But as coronavirus cases continue to rise to nearly 25.7 million around the world, as reported by the World Health Organization (WHO), you’re likely extra-determined to hunker down with your favorite banana bread recipe and Netflix subscription, and consider any major 2020 vacation plans canceled(or at least postponed).
“But let’s be optimistic for a moment, because there is a silver lining to this situation. With expensive travel plans off the table this year, your bank account is now filled with unexpected funds that can be re-budgeted to serve you in other ways. Just write down a list of your financial goals and you’ll realize the perks—like being able to pay down your credit card debtand splurging on a kitchen renovation—for yourself. (A sense of relief may even wash over you, much like it would after spreading out a towel on a lounge chair.)
Casciano turned to CFP® Marguerita Cheng for advice:
“Building up your cash reserve may be a good route,” according to Marguerita Cheng, CFP. “Your desire to plan for the future comes from good, proactive intentions—and a cash reserve, or rainy day fund, will have those same intentions, and only has to be about three to six months worth of income.”
By the same token, your current travel savings can also go toward your “Financial Freedom Fund,” which is similar in concept to a retirement fund, where you’re paying yourself.
“This money is designed to help replace a portion of your income so you can continue to travel throughout your life,” Rita says. “It might be put into dividend paying stocks, REITS, or other income producing assets.”