My family just returned from a week-long beach vacation in Cancun, Mexico. It was our first “real” family vacation, outside of visiting family out of state. We had an amazing time and it was so worth all months we had to save up for it! It was so nice to get away and connect as a family without all the distractions that come with everyday life. We had so much fun, which made it hard to come home. My husband and I decided that we definitely want to travel more, but in order to do that, we are going to have to maximize our money by spending less and saving more.
Vacations can add up very quickly, especially if you are traveling with a family. Depending on where you are planning on going, you’ll need to factor in airfare, fuel, lodging, food, entertainment, etc. when you calculate your expenses. Charging everything to a credit card isn’t the smartest option. It’s only a good idea if you can pay your balance in full. You are better off saving up for your trip and paying for it in cash. While the thought of saving that much money may seem overwhelming, it can be done faster than you think if you get serious about your finances. Here are some tips to get you started:
Refine Your Budget
It’s amazing how much money you can save each month just by taking a look at your spending. The other night my husband and I sat down and did exactly that. We added up how much we spent over the last couple of months on our usual expenses such as our home mortgage, auto insurance, car payment and cable internet, as well as our expenses that fluctuate each month such as groceries, dining out, and clothing. We spent more than either of us had predicted, which was a bit of an eye-opener. We used to be diligent about following our budget each month, but over the course of the last year we have gotten lazy. In order for us to save for another trip, we have to be on top of our spending and that means following a strict budget.
It’s so important to create a budget if you haven’t already. If you have one in place, but you’re either not following it, or it’s not working, you need to refine it. Bankrate makes it easy to set up a budget and manage your expenses with their online budget calculator. You’ll need to know your income each month, as well as all of your expenses. Keep in mind, your expenses should only include the necessities. This will help you determine where you will allocate your leftover money each month. You should be putting most of it in a savings account or emergency fund, but if you are saving for something like a vacation, you’ll want to set aside a certain percentage for that too.
Maximize Your Savings
You should be setting aside money each month to put in your savings account. If you’re not doing that now, you need to start right away. It’s too easy to spend whatever you have left each month if it is just sitting in your checking account. I have found that it works best to set up an auto transfer from your checking to savings after each pay period. Even if it is just $100 each time, that will help you build up a savings to help not only with unexpected expenses, but also a vacation.
If possible, I recommend setting up a separate savings account just for your vacation fund. This will allow you to see exactly how much you have saved up. If you are unsure how much to save each month, you’ll first need to figure out how much your dream vacation is going to cost. For example, if it’s going to be around $5000, and you want to travel within two years, you will need to save at least $208 each month ($5000/24 months = $208.33).
Cut Your Expenses
So what do you do when you have created a budget and started putting money in savings, but it’s not adding up as quickly as you would like? If this is the case, you may need to become more aggressive about eliminating certain expenses. My husband and I have had some tough conversations about this. We want the big house, nice cars and name brand clothes. But we also want to save for retirement, pay off our mortgage and travel more. With our income, we just can’t do it all. So that means we have to decide what we want more and adjust our spending accordingly.
You may find yourself in the same boat. You want to “have it all,” but the reality is unless you are wealthy or financially set for life, you can’t have it all. When it comes down to it, do you need to have that car that comes with a $700 payment or that house that is costing you $2000 a month? Or would you rather be debt free and travel more?
If you can eliminate or significantly reduce some of your expenses, you will be able to pay off your debt more quickly and save for those dream vacations. Start by cutting the expenses that aren’t necessities, like cable TV and other subscription services, eating out and going to the movies. And if you want to get super aggressive, you could refinance your home or get rid of your car payment and put the money you would spend on those items each month in your savings account.
You can easily save for your dream vacation if you are serious about your finances. Create a budget that is aggressive, yet manageable and get rid of those unnecessary expenses that are holding you back. With simple changes to your spending, you will be able to save more and enjoy the vacations you’ve always dreamed of taking.
Saving money and taking control of your finances can improve your life in all aspects. Bankrate can help you maximize your money with a variety of financial tools, tips, calculators and more. Visit Bankrate.com to learn more.
This is a sponsored conversation written by me on behalf of Bankrate. The opinions and text are all mine.