Saving for a Vacation Can Help Improve Your Finances

Saving for a Vacation Can Help Improve Your Finances

In our "60 Motivating Seconds With a CFP®" series, we’re bringing you simple tips designed to help you make progress on your money—in just a minute's time.

Today, Stephany Kirkpatrick, CFP®, with LearnVest Planning Services, explains how socking away money for a relaxing getaway can help you stay on track with your bigger savings goals.

Remember saving money as a kid, making daily five- or 10-cent deposits into that piggy bank on your dresser?

You probably knew exactly what you were saving up for, whether it was a bicycle, a video game or a lifetime’s supply of ice cream cones.

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Yet when it comes to grown-up savings goals—like building up your nest egg—keeping your eyes on the shiny prize doesn't always come as easy.

One of the main blockers? Without a gratifying, short-term payoff encouraging you to diligently save a portion of your allowance—er, paycheck—every month, your motivation to keep going can wane.

That's why I love the idea of dusting off that piggy bank to start stashing away cash now for a vacation you can enjoy in just a few months' time.

Why It Works Hefty bank balances don't materialize overnight. But by creating smaller savings goals for yourself, you'll enjoy the fruits of your labor much sooner—and you'll train your brain to see that diligent savings habits do pay off.

That knowledge is what can buoy your confidence when it comes to those loftier, long-term goals, like, say, saving up for a down payment on a home.

RELATED: 8 Money-Saving Summer Travel Secrets

"Calculate how much you can reasonably spend without sacrificing your other financial priorities, and divide that figure by the number of days left until you want to get out of town."

How to Get Started There’s something special about watching your savings add up right in front of you—it's a visual representation of all of your hard work.

But since it's unlikely you'll have time to accrue any interest in an online savings account for this exercise, consider using a real jar to stash away your vacation money.

I recommend a clear one—like a mason jar or fishbowl—for an obvious, happy reminder of your progress. And put it somewhere where you're more likely to empty your pockets, such as on a table near your front door or on your nightstand.

Once it's in place, the next step is to give your goal some definition. What kind of trip would get you excited about saving?

Do some research to find out what's feasible given your budget—and don't feel discouraged if you can't swing a two-week South African safari. A more modest vacation, like a weekend camping trip, can be just as rejuvenating.

Then calculate how much you can reasonably spend without sacrificing your other financial priorities, and divide that figure by the number of days left until you want to get out of town.

For example, if you can afford to spend $300 on a camping trip that’s three months away, you’ll need to save just under $3.50 per day.

Easy, right?

Before you know it, you’ll be sitting around the campfire toasting s’mores—and feeling like an old savings pro!

RELATED: The 3-6-9 Guideline for Emergency Savings

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc., that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. Unless specifically identified as such, the people interviewed in this piece are neither clients, employees nor affiliates of LearnVest Planning Services, and the views expressed are their own. LearnVest Planning Services and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.

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