I attended an event with my wife recently and eventually found myself engaged in a conversation about money.
A young lady began to explain her budget and I got the feeling she was looking for feedback. Based on what I learned about her financial habits, I said, “Do you mind if I ask you a few questions?” She said, “No!” I took this as permission to invade her privacy (just kidding). One of the opportunities for improvement I discovered was how she and her husband save and plan for vacations.
For most of us, our vacation expense consumes the largest amount of cash used within one respective month (emergency expenses excluded). Think about your last vacation. How much did you spend after adding airline tickets, rental car, hotel fees, gas, parking, meals, souvenirs, baby-sitting, and shopping for clothes? Here are some simple tips to help jump start your 2018 vacation plans.
1. Set a realistic vacation budget - Determine how much money your last vacation cost. Next, ask yourself … could I afford it? If you are still paying for fun you had last year, probably not.
2. Save on a consistent basis - If you usually spend $2,500 for a vacation (depending on your family size, this number could be higher or lower), start saving $208 a month ($2,500/12 = $208.33) for the next year versus using a credit card and then paying interest upon your return.
3. Repurpose extra income - If your employer provides a year-end or holiday bonus, save this unexpected wealth. Use your 2017 tax refund as a resource to fund your travel budget.
While conversing with the lady, I explained that my wife and I stay one year ahead on our vacation budget. The money we are using for vacations this year was saved in 2016. The money we are saving in 2017 will be used in 2018. At the current time, we have approximately all the money we need to travel for the next 12 months.
The hardest and easiest part about this process is the first step … saving. Today, you have the choice to begin saving for next year’s trip. Here’s some motivation. Consider how less stressed you will feel when looking for a vacation destination next year and realize it can be paid for in cash. Do the math because numbers do not lie. All it takes is discipline – the ability to train yourself to follow a code of behavior – and you already have plenty of that.
What money tips do you have for planning a stress-free vacation?