Start saving now to earn the vacation you deserve.
Despite the on-and-off travel restrictions many of us have faced, we can still hope to once again relax on sandy beaches or ski down snowy slopes.
In fact, now could be a great time to start saving for your next vacation—and a Tax-Free Savings Account (TFSA) might be your best choice.
A TFSA is great for short-term savings (like a vacation or an emergency fund) because it can be withdrawn any time without being taxed by the government.
You can also earn interest in a TFSA, so you will make more off your savings if you save more and don’t touch it. This is what makes it versatile for long-term savings as well (like a down payment or retirement).
To put away funds for your next vacation, open up a dedicated TFSA for your savings. You can then name the account a custom name (i.e. “Vacation Fund” or “Palm Springs 2023”) to motivate yourself.
Once you have your dedicated vacation TFSA, we recommend setting up automatic scheduled transfers to your vacation account for each payday. That way, you don’t have to think about saving—it will automatically be taken care of when you get paid.
Another vacation-saving tip is to put any extra income—such as from birthday gifts or tax returns—and put it directly in your TFSA to increase your savings and boost your interest earnings.