- Debt, Financial Advice, Savings, Millennials, COVID-19
- November 05, 2020
- FCU Team
Let’s say that last year you planned to take a hard-earned vacation in 2020. You scrimped and saved every dollar you could get your hands on and like a good saver, created a vacation fund to keep it in. You beat every milestone and resisted every temptation to spend that money…then reality hit and the COVID-19 pandemic all but ruined your trip. If you were able to get your money back and haven’t spent it just yet, you might still be wondering what you should do with it.
Never fear! Read on to learn about some ways you can put that money to good use.
Build an Emergency Savings Fund
2020 has been the year of harsh lessons. One many people learned was the danger of not having an emergency savings fund to buffer against financial hardships. If you’ve been able to keep a steady income, but don’t currently have an emergency savings fund, we’d strongly recommend starting one. An emergency fund isn’t just for once-in-a-century pandemics, of course. Your car breaking down, a sudden illness and vital home repairs are just a few of the many emergencies you could contend with and manage with a decent savings fund.
Take Care of Debts
From student to auto loans, most people owe something to someone. The average American was somewhere over $26,000 in debt at the start of 2020, and has felt increased financial pressure due to the unforeseen effects of the COVID-19 pandemic. This means paying down some of your debt is of utmost importance. Paying off debts before they’re due has a myriad of helpful effects, so let’s talk about those benefits!
Firstly, you save money due to the interest you would’ve paid had you continued just hitting the minimum each month. Second, paying off debts has a positive effect on our mental health. There’s nothing quite like making the final payment on something and never having to worry about it again! Lastly, the money saved from not having to make payments each month will help you to build more savings. Good vibes are key to enjoying a vacation or any of the other suggestions in this blog!
If you’re looking to tackle debt with a more prolonged but effective plan, check out the fifth tip on our 2020 money management blog about the debt avalanche and snowball strategies!
Treat Yourself at Home
If you’ve got an emergency fund and debts covered, look at your wish list and see if there’s something you’d like to treat yourself to. If safe options are available, a makeover or spa day could also be in order if the stress of the pandemic has been getting you down. Don’t forget that the original goal of your vacation was to take some time off and enjoy yourself. While you can’t replicate the experience of going on vacation and enjoying a new place, there are new experiences you can have at home as well. It’s likely we’ll never experience a situation like this again, so do your best to stay positive and focus on things you can control!
Home ownership can sometimes be a war of attrition. You’ll fix something just as something else breaks. With so much to care for on top of life’s other problems, it’s understandable if your home maintenance has fallen a bit behind as of late. If the house has needed a new coat of paint or a good power washing for the driveway, this is where you can spend some of your vacation fund to shrink the list. If you have the time to spare, want to save money and have the necessary skills, be sure to tackle some of those issues yourself!
Grow Your Money
Happy with all the money in your account and want to grow it? Investing might be the best path for you. From IRAs, Money Market accounts and Certificates of Deposit, there is a healthy variety of options when it comes to growing your money. Wading through all the information and figuring out which is the best can be difficult. Lucky for you, we have experience with all of these investment options!
While, investing can be a slow process, remember that the money you’re using today could be put to better use. Thanks to compound interest, a few dollars invested today could be setting you up for retirement.
Do you have any passion projects you’ve been putting off due to creative pursuits or working on starting your own business? Funneling your vacation money into these projects could accelerate them to completion. Time and money seem to be the things always getting in the way of what we really want to do, so if you’ve got the option to take care of at least one of those (or both if you take time off anyway!), go for it!
Don’t forget to be smart, however, as money doesn’t always mean quality. Make sure to take stock of your finances and your project to see if a cash infusion would result in a significant amount of progress. It’s also important to prioritize things like debts before using a significant portion of your funds on these projects.
Give to Those in Need
It’s undoubtedly a time of financial hardship. For those of us lucky to have come out of it mostly unscathed, giving back is a great use for some of your unspent vacation money. This includes family and friends, of course! For donating to causes, think on what you’re passionate about in the world and what problems you’d like to see addressed. Any amount you give can make a difference in a person’s life.
If you’re looking for the right charity for you, take a peek at this charity navigator.
Mix & Match!
Depending on the amount of money you saved up and how you choose to spend it, it’s easy to accomplish a few of the items on this list. So take your time and execute your financial plan! Have any questions about how our account options can help? We’re here for you day in and day out.
Florida Credit Union is a full-service financial institution. Founded in 1954 as the Alachua County Teachers’ Credit Union, FCU now services over 111,000 members in 45 counties throughout North and Central Florida. For more information on the services we provide, visit FLCU.org or call us at 1-800-284-1144.