Saving enough money to go on your dream vacation can seem daunting, especially if you’re not bringing home huge paychecks. Too many people go into the savings process half-heartedly, and become discouraged when they don’t see high gains after a few months – We’re not going to let that happen to you!
Building savings in a short amount of time can be difficult, but it’s certainly not impossible. And if you follow these tips and guidelines, you’ll be on that flight sooner than you ever expected.
If you’re serious about saving, you’re going to have to embrace the concept of budgeting. Before you actually start saving, spend a month meticulously documenting all the money you earn and spend – every single penny should be recorded. Once you know exactly how much you’re making and spending in an average month, it’s much easier to set your goals and get started.
This step is just as important as budgeting. If you only have a vague idea of how much money you’ll need for your trip, your savings will falter. Do some research to find ticket prices, hotel prices, average cost of dining and activities, etc, in the places you want to stay and visit. Calculate the bare minimum you’d need to save in order to take the trip according to your comfort level, then add more to the budget for “padding” and discretionary funds when you’re there – it’s always better to have a bit too much money rather than not enough! This is also a good time to set a timeline. Think about when you’d like to go on the trip, but be realistic.
Now that you have a record of your daily spending habits and earnings, go through your spending record and mark each of your “unnecessary” purchases. This is what’s going to help you the most – limiting your extra expenses in daily life. If you want to save very quickly, you may need to make some lifestyle changes – no more Starbucks, take-out meals, spa days, gym memberships, magazine subscriptions, etc. It’ll be hard, but totally worth it. Calculate how much money you’ll need to spend each month on rent, utilities, food, bills, and transportation – that number will be your new spending goal.
You probably already have a general savings account. Don’t use it! Instead, open a new savings account that will be reserved specifically for travel funds. This will make it easier to keep track of exactly how much money you’ve saved up, and will keep your rainy day savings untouched.
Remember your savings goal? Allow yourself only that much money per month, plus maybe a little extra for unexpected purchases. Have the rest of your earnings automatically transferred into your travel savings account. Example: Say you receive two paychecks monthly, each for $2,000, and your bare-bones spending goal per month equals $1,000. Set up automatic transfers that seamlessly deposit a percent of your earnings into your travel fund. Consider transferring any “leftovers” to your travel fund as well. Even if you only have 50 cents leftover, put that 50 cents into your travel fund!
If you still use cash here and there and come home with a few quarters and dimes, place them in a jar on the counter. Over time, spare change can accumulate faster than you think! Just before your trip, cash in those coins and add that money to your food and activities budget.
The most important thing to remember is that you won’t reach your goals if you’re not actively trying to. It will be difficult! But after a some time, you’ll start to think of money in terms of travel. Sure, that $40 could buy you some after-work drinks with your friends, but it could also buy you a ferry ticket between Spain and Morocco! There will be inevitable slip-ups here and there, but stick with the plan, and you’ll be off in no time.