It’s almost April, which means showers, May flowers - and before you know it - summertime!
Your sights are set on your travel destination and you’ve saved up vacation days at work, but do you have a financial plan to fund your vacation? (Hopefully one that doesn’t end up leaving your post-vacation credit card bill looking like your post-holiday season bill. )
Here are 3 tricks to realistically save up the money needed to get you from Point A to Point Paradise by the time summer rolls around.
1. Set It Up.
Right now, set up a separate savings account for your vacation fund so you don’t end up dipping into a savings account, borrowing from an emergency fund, or relying on credit cards. Determine how much you need to save (know what you’re shooting for) and set up the savings account (to measure your progress). SmartyPig is a nifty online banking site that allows you to customize separate accounts with a name and savings amount, plus you can view your progress towards your goal and share it with people; but any savings account will do. Calculate a reasonable amount to automatically pull from each paycheck and set up automatic deposits. Like the satisfaction of hearing coins jingle in a piggybank, you need something tangible to commit to.
2. Fund It.
If you don’t have wiggle room in your budget to fund your vacation, use a “pay yourself first” savings strategy. First, figure out the non-essential items in your current budget outside of rent or mortgage payments, utilities, loans, and other necessary expenditures. Second, pick out spending habits you can ditch, and calculate how much you could save towards your vacation instead. For example, you could:
- Ditch your daily latte fix , save $155 a month, and have $465 saved by July. That equals a plane ticket or weekend hotel stay.
- Cut out weekly dinner and drinks, save $240 a month, and have $720 saved by July. That equals a 3-day cruise or big road trip.
These are estimates, but the idea here is to target ways to save big by starting small. Nominate which spending habits you could sacrifice for a while. Finally, instead of treating yourself to these luxuries, pay yourself first— straight into your savings account. Piggymojo, which encourages you to turn impulse purchases into bank deposits, is another cool, mobile tool perfect for this step.
3. Keep It Up
Diets often fail because we lose sight of the finish line, and suddenly it’s easier to trip up on the next donut that comes along. So keep your eye on the prize and give yourself reminders of why you are cutting your budget. Make your smartphone’s homescreen and computer desktop a picture of your vacation spot, check your savings goal every other day to see your money grow, and mark down on a calendar how many days till vacation. Do whatever it takes to make your plans as realistic and attainable as possible, so you can visualize the concept of saving money as bringing you one step closer to the reality of your summer vacation.
The more you plan out real savings steps, the closer you are to funding your summer vacation in a savvy way without ruining your savings or credit health. It’s the 3-steps- and-3 months-till-summer challenge— get your piggybank set and your vacation bags packed!