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Money-Smart Travel Part 1: Save Now, Live It Up Later

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When you think about it, planning is one of the best parts of taking an exciting vacation. Putting your dazzling itinerary together and daydreaming about all the amazing things you’ll see can really get the juices flowing. However, if you haven’t planned for the financial impact of your trip, money concerns in the months after your excursion can tarnish your happy memories.

It might seem like a strange time to be thinking about vacationing, but preparing well in advance can help relieve the stress and strain of paying for your travel. That, in turn, frees you up to focus on all the fun parts of getting ready for your excursion.

Here are a few pointers for assembling funds to ease your mind before, during, and after your incredible vacation adventure.

A Price Tag For Paradise
Creating a trip free from financial stress starts with knowing how much the journey will cost. Clear several hours on your schedule to get a complete grasp on the entirety of your outlay. Though it may seem daunting to stare down such a big number, ultimately, it can give you peace of mind knowing you won’t have to worry about months of supersized credit card bills after you return home.

Calculate Before You Vacation
Once you know the grand total for your getaway, it’s time to start your plan to make it happen! Divide the cost by the number of months until you’d like to depart; this is your monthly magic number.

Ponder Your Pillars
As with so many financial goals, making your adventure a reality comes down to the four pillars of personal finance: expenses, income, assets, and debts. If the monthly magic number is more than what you can currently put toward your vacation fund, don’t fret. It just means you’ll need to make a few adjustments in one or more of the below areas.

Pillar I: Expenses
Planning for your vacation is a terrific time to review your monthly spending plan. Typical areas of emphasis for clearing up space include dining out, entertainment, and subscriptions. But no one knows your situation better than you, so go over your expenditures to see which areas of spending money are a lower priority.

A recent study found that the average American spends $1,200 per vacation. By challenging yourself to trim just $100 per month in expenses, you could pay for a trip each and every year without having to worry about generating additional income.

Pillar II: Income
This one can be a bit trickier. If you can work a few extra hours at your job, consider using the overtime to rev up your travel fund. But you don’t want to spend 50 weeks of the year miserable just having two weeks of bliss. Income is an excellent area in which to think creatively. What things would you enjoy doing to get more cash rolling in?

Pillar III: Assets
Many people find happiness in accumulating memories instead of material possessions. If you think you might fall into this category, consider bulking up your trip savings by liquidating unwanted items via online auction sites, social media marketplaces, or an old-fashioned garage sale.

Some big-picture thinking might be in order too. If your home or vehicles are more than you need, downsizing your life a bit could mean more magical travel moments in your future and less stress about affording them.

Pillar IV: Debts
When measuring the monthly costs affecting your ability to save, consider the impact of carrying expensive credit card debt from month to month. The interest you pay each month on unsecured debts could help you get to that special place faster or maybe even enjoy a more deluxe experience once you’re there.  If you pay interest on a balance, consider looking for a lower interest card that meets your needs.  Your Credit Union has cards that start at interest rates half or less those you typically find at banks.

Set It And Forget It
Trying to remember to put money away for your vacation every month isn’t likely to be your best strategy. Instead, setting up a savings account specifically for your trip and having money automatically deposited from each paycheck into that account gives you a simple and guaranteed way to amass the funds you need. Your Credit Union makes this easy with “My Account.” This savings account lets you automatically deposit small amounts each paycheck into an account that you name e.g. “Hawaii Vacay.”  These soon add up with interest to a nice nest egg, ready and waiting for the big trip.

Frame Your Mind
Do you spend time daydreaming about relaxing on that beach or climbing those ancient ruins? You can put that spirit to work for you. First, make the background image on your phone a picture of your dream trip. Then any time you’re tempted to make an impulse purchase, pull out your phone and let the dreamy picture help keep your eyes on the prize.

Flex Your Flexibility
If circumstances change and you’re just unable to save at the monthly amount you initially anticipated, consider pushing back your travel dates. It may be a bummer to think about delaying your getaway, but waiting until you have the money before you travel can mean not having to pay interest on the cost of the trip. Not only does that save you money, but it can also help you take the trip after this one sooner.

Many Happy Returns
If you find it challenging to save, there’s no need to feel shame about it. If you use your tax refund each year as your travel fund—and that strategy works for you—keep it up. It’s better to rely on a tax refund than a performance bonus because the latter may or may not happen in any given year.

When you’ve got the financial aspect of your vacation figured out, the fruity drinks taste sweeter, the exotic dishes are more delicious, and the relaxation is more delightful. You deserve that.

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