Are you among the millions of Americans in desperate need of a vacation but can never seem to scrape together enough cash? Maybe you make more than enough money, but struggle to save enough beforehand and end up putting it on your credit card. Perhaps you’ve already figured out the money stuff and need to find a way to travel more. Where ever you are, this post will provide everything you need to save for your dream vacation starting today.
A number of years ago my husband, Jer, and I took a three-week trip to Greece. We had traveled quite a bit during the previous decade so we were taken aback by people’s reaction to our trip. I’m not sure if it was the location or the amount of time we were gone, but over and over we heard the same response.
It’s going to take a long time to pay that off.– Everyone
When we took that trip, Jer and I were in the first year of a five-year plan to pay off our mortgage. There was no way we were going to rack up credit card debt for a vacation. So we saved our money to pay for that trip AND paid off our mortgage in two and a half years.
How we save for vacation
Nearly a decade ago, we realized that our lives could be very different than anything we had ever known. From that point on, we took in every piece of information we could find about creating financial freedom. We read books, listened to podcasts, and worked together as a team. We got intentional about where our money was going, started budgeting, and identified categories where we could significantly cut back.
For anyone who just felt overwhelmed with the mention of reading and budgeting, don’t freak out just yet. Our success was the result of three simple things that you don’t need a Ph.D. in accounting to do.
Anyone can do these three things.
- We made the decision that our lives were going to be different.
- We took tiny steps toward our big crazy goals each day
. Westuck with it and supported each other along the way.
Was it worth it?
I know some of you are thinking exactly what I was thinking nine years ago. I thought we were doing great financially. We had money saved for retirement. We didn’t have any credit card or student loan debt. Why would we go through all the trouble of ramping up our savings and paying off debt? Life’s short, you might as well enjoy it while you’re young. Right?
Having been on both sides, I can confidently say that the only thing I’d go back and change would be starting sooner. If we had been as serious about our finances at age 25 as we were at age 35, we’d be in a very different place right now. Probably a place far away from Minnesota winters.
But creating financial freedom is so much bigger than not having to shovel snow when it’s 30 below. I wrote a post last year about the surprising benefits of creating financial freedom that you can read here. Most of the things I shared were much deeper than money.
First, you’ll improve your confidence by simply setting and achieving small goals. Next, you’ll take pride in being your authentic self when all of your actions align with your values. You’ll always
You can save for vacation too!
Before we move on, let me share something I’m not proud of. When I read articles like this, I’m just waiting to stumble upon a reason that the writer has been so successful with the topic they’re writing about. When I find it I say, “Ah ha! Of course she’s been so successful, both her parents are doctors.” Or, “I knew it. He’s so much further ahead because he has a law degree from Stanford.” From there it’s easy to tell myself, “These people are nothing like me.” And then I can lower myself back down to my old standards.
I’ve got bad news for anyone else who does this. That excuse isn’t going to work here. Neither Jer nor I grew up with money. The fanciest education in this household is from St. Cloud State University. And we certainly didn’t have a well-connected network to help us climb the ladder.
It was hard but we figured it out and are better humans because of it. More importantly, we can take what we learned and help make your journey much easier.
Throughout this post, I’m talking about saving money for travel. But this could apply to any big purchase you need to save up for. Maybe you need a new fridge, furnace, or a new roof … you know, adult stuff that’s way less interesting to read about.
Before we dive in, I also want to point out that I made all the steps rhyme. What?! Yes I did.
Repeat it with me – create your fate, calculate, set a date, accelerate, and automate! Again – create your fate, calculate, set a date, accelerate, and automate!
(Maybe it sticks, maybe it doesn’t; at least I had a little fun.)
Let’s dive in.
1 – Create your Fate
The first step is to say what you want and set a specific goal. If you could go anywhere in the world, all expenses paid, where would you go?
Now write that down with as much detail as possible. Don’t forget to name your why. For example, you might write:
I’m going to take my family to Paris this year. We’re going to spend 10 glorious days dining in French cafes, visiting the churches and museums, and enjoy a slower pace with the people we hold most dear. We’re going to rent a little apartment so we can all be together and create the memories of a lifetime before the kids head off to college.– You
2 – Calculate
Like it or not, when we’re setting financial goals, we need to know the numbers. If you’re like my dear husband, this step might fill you with angst. But you gotta do it. Either you go through the monotony of figuring out how much it will cost, or it remains a farfetched dream indefinitely.
You don’t need to spend a whole day on it, but you should give it some effort. Do a quick search on the price of flights for the time of year you want to go. Look up the going rate for three bedroom apartments on Airbnb. Find out how much you should expect to spend on food and drinks per day. Don’t forget admission fees, activities, tips, and additional transportation costs.
In addition to figuring out exactly what you need to save, the other benefit of this step is that it begins to make your dream a reality. Go ahead and google “things to do in Paris.” I bet you’ll be itching to book a flight immediately. Paris wasn’t even on my radar. Then I googled it and got sucked into the stunning architecture.
3 – Set a Date
Now that you know where you’re going and have a good idea how much it will cost, figure out how quickly you can make it happen. The sooner the better. Planning and saving for a trip that’s 6 months away is much more exciting than one that’s 18 months in the future.
4 – Accelerate
By now you’ve determined that your family of four can make this trip happen in the next eight months. And you’re certain the entire trip will cost less than $8000*. That means you need to set aside $1000 per month in your vacation fund.
*You could do this much cheaper OR much more expensively. People are always shocked when I tell them exactly how little we spend on travel. You can learn our top money saving tips in this post.
Now you need to figure out where that $1000 will come from. I personally know a lot of people who spend more than $1000 per month going out for food and drinks on the weekends. So some of you might find a huge chunk of money there.
Have you considered bringing your lunch to work? If two adults who typically spend $10 to $12 a day start packing food from home, they could easily save $16 per day or more. That’s $350 per month. Not to mention the added benefit of losing a few pounds.
What do you do for entertainment? If you cut your weekly trip to the movies you could sock away an extra $200 each month. There are plenty of fun free things to do like exploring your local museums and parks.
Some of your largest expenses might be things you didn’t expect. When I started tracking our expenses, I was floored to discover that I was spending $800 per month on groceries for a family of two. How and where you shop really does matter. Now we spend about half that and eat healthier too.
Sit down with your family and go through your expenses with a fine-toothed comb. Check your bank and credit card statements and don’t forget to consider your monthly cash outlay. I’m sure that most of you will find what you need and then some. If you need help, here are 103 ideas to help you save even more.
Increasing your income is another great option. Ask for a raise, get a new job, or start a side hustle. Not only will this boost your vacation fund, but it will do wonders for your career for years to come.
Don’t wait to start booking
5 – Automate
If you asked everyone who knows me what my top three strengths are, all of them would say organization. So if I were to rate my ability to transfer this newfound cash into savings, I’d rate myself at a 9.8 out of 10. That said, I still always automate.
Just like you, my time is precious. I don’t have time to make sure every dollar ends up where it needs to go every time we get paid. At the beginning of each year, I decide how much we need to set aside each month. Then I set up automatic transfers to take care of the rest.
This system is especially great for those who are less gifted in the willpower department. If you think you’ll be tempted to spend that $1000 on new shoes, create a system that will eliminate the temptation.
I transfer most of our savings to accounts that are a pain to get money out of. These accounts don’t have checks or ATM cards and I intentionally set them up that way.
Editor’s Note: I wrote this post to inspire my middle-class American peers to do more of what they love. I know that there are many people out there who’ve already cut everything I suggested and still have a hard time making ends meet. No matter how low you feel right now, know that there is a way out. There are so many options and resources available to you.
If you’re feeling stuck right now, please ask for help. Go to the wealthiest person you know and ask for their advice. Keep in mind that the wealthiest person may not be the highest earner, wear the flashiest clothes, or drive the nicest car. More millionaires drive Toyotas than Mercedes.
Ask them if you could meet for 30 minutes to get advice on your current situation. Note that many wealthy people have a lot of balls in the air and might not have the bandwidth right now. It’s probably not a reflection of you because most wealthy people love to help. If the first person says no, keep asking until you get a yes. And when someone does take the time to help you out, take action. It will probably be uncomfortable, but you’ll be grateful for everything you did a year from now. Plus, taking action is one of the best ways to thank someone for investing time in you.