How I’m saving for travel this year
In about 10 weeks, I will be boarding a flight to Portugal for an amazing vacation. I’ve been wanting to go back to Portugal since I was first there back in 2012, but with so many other financial priorities this year (namely aggressively saving for our down payment), we weren’t sure if a 3-week European holiday was something we were going to be able to pull off. Was it the responsible thing to do, and could we even afford it?
We had a fairly big discussion about what our priorities were, and we realized that while buying a home is something we really wanted to do, living a balanced lifestyle was more important. And that meant travel. So I created a few spreadsheets and budgeting scenarios which would get us to our savings goals. Because RD isn’t as involved with his finances as I am, creating these scenarios helped him to better understand what we could (and couldn’t) afford as we started to plan what our trip would look like.
It was around this time that I really wanted to separate my down payment and my travel savings into two separate accounts. Because my travel money is always fluctuating depending on how much I spend and save in a given month, I wanted to be able to visualize exactly how much I had. But I also wanted more than the 0.8% interest that my bank was giving me.
After taking a look at the different banking options I had, I decided to keep my current bank for daily spending (and some of my investments), and move all of my cash savings (except my Emergency Fund) over to the EQ Bank Saving Plus Account, which has the highest interest rate I could find, at 2.30%. And even though it had the highest interest rate, there was no minimum balance requirement, and you didn’t have to lock your money in for any sort of time frame. These were two keys I was looking for, if there’s a good travel deal happening, I didn’t want my money locked away for a specific amount of time!
If you’re unfamiliar with EQ Bank, it’s a digital bank with no minimum balances, no monthly fees, and unlimited day-to-day transactions. So yes, it’s a high interest savings account, but it also comes with a lot of features that you’d find with a chequing account – like the ability to pay bills, transfer money between EQ accounts instantly (and for free), as well as 5 free Interac e-Transfers® per month.
I’ve been a customer for about 18 months now, and have been using it as my primary cash savings accounts for the last 6 months. The transition and implementation has been pretty seamless, and I can’t really see myself deviating from this set-up anytime soon. I really like how it works as a companion product to my current banking system, so I don’t have to decide which bank to use – I can use both. :) I’ve been able to transfer savings to and from my everyday bank and EQ, pay my credit card directly when I’ve spent money on travel, send money to RD with Interac whenever he’s paid for something, and I’ve been using the mobile app to deposit my freelance cheques directly into my savings – eliminating the need to have that money touch my chequing account.
I don’t have that much cash savings at any given time, but the money I do have, I want to be helping me get to my savings goals sooner – so for me, the 2.30% interest rate is a huge bonus. It’s almost 3x what I’m getting right now, and my travel savings combined with my down payment savings means I’ve been earning almost $120/month in interest alone this year. Not too shabby for a savings account!
So as a special treat for my readers to get your own summer savings started, new accounts opened have the chance to win one of 10 $150 deposits into your new savings account! That’s enough for a nice dinner out on your next vacation! :)
Author: Krystal Yee
I’m a personal finance blogger and marketing professional based in Vancouver. I’m a former Toronto Star (Moneyville) columnist, author of The Beginner’s Guide to Saving and Investing, and co-founder of the Canadian Personal Finance Conference. When I’m not working, you can usually find me running, climbing, playing field hockey, or plotting my next adventure.