Save for a family vacation

If you spend a lot of time reading or thinking about the urgent need to start saving now for your retirement, the idea of spending money on a family holiday may seem like a shockingly irresponsible use of your income.

Yet family holidays — not dollars — are what long-lasting memories are made of, and one day you'll probably wish you'd taken more of them, not fewer.

Make saving a family affair
The best way to save for a holiday is to establish a separate savings vehicle for that purpose and contribute to it regularly. A short-term, high-interest product — such as a high-yield bank account — is probably your best bet. Decide on a monthly amount you can afford to contribute, and watch your savings grow.

If you have older children and want them to participate in the savings effort, come up with ways in which they can help "earn" their part in the trip.

For example, teenagers can earn a "credit" towards the vacation by skipping popcorn at the movies. The younger set can earn credits for cleaning up toys. This is a great way to combine saving for a holiday with teaching your children about money management and budgeting.

Plan a less expensive vacation
Holidays don't have to be expensive, says Ann Douglas, the author of more than a dozen parenting books, including Family Finance: The Essential Guide for Canadian Parents. Not every holiday has to last an entire week to be a memorable event in your family's history. Instead, she says, consider taking mini-vacations.

"Unlike longer holidays, which can be difficult to schedule and even harder to pay for, two- or three-day getaways can be shoehorned into the most jam-packed schedules and the tightest budgets," writes Douglas in an article that appeared last year in Today's Parent. "All you need is a sense of adventure and a willingness to think outside the suitcase."

You may also get a better deal on a holiday by booking it online. If you participate in air rewards programs and you have enough points for a free ticket or two that will cut down on costs significantly. If your holiday schedule is flexible, consider taking advantage of "last-minute" packages at steep discounts.

A more creative option may be to plan a vacation in a country where costs will be extremely low once you get there, whether because of currency exchange or because the cost of living is so low. For example, it's expensive to travel to India from Canada, but once you're there, you can travel on an incredibly low budget.

Of course, your children may not be interested in India — but they may have other ideas that will surprise you. Get out your atlas and start planning!

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Save for a family vacation