Vacations are expensive. You didn’t need us to tell you that, did you? But with the right savings plan, you can actually set aside enough for a great vacation a little at a time without breaking the bank.
We came across this meme on Facebook a while back, and if you’re on a tight income (or a single income), it’s a great strategy:
As a matter of fact, this is a great way to save up for Christmas presents, or anything where a hundred a month might come in handy for the next season.
But we wanted to up the ante, and make way for some fantastic vacation opportunities. For a couple, this is obviously a lot more expensive, and takes a lot more planning and budgeting. However, combining this with our travel points card (it’s a Visa card, but we accumulate points that we can cash in for value on flights, hotels, etc.), along with Amanda’s obsessive quest for the absolute best value in flights and Airbnb bookings, and we were able to generate a much bigger budget.
Instead of starting off with $1.00 and adding a buck a week, we started at $50. Each.
Since Amanda is a teacher, we naturally plan our holidays for the summer. So we begin with Week 1 on July 1st (or the closest Monday to it), and make a deposit a week. The best trick: do the deposit into a high-interest savings account (2.5% or more) so your money increases even more.
Here’s what it looks like for each of us:
So that’s close to $8,000 in savings over the course of a year. It sounds like a lot, but these little incremental additions to the budget are really quite painless. Obviously if this is a squeeze on your regular budget you’ll have to jig the numbers to fit what you can manage. Just use a spreadsheet and start from a number you’re comfortable with. You can also do this in monthly values as well if that works for you.
This does take a bit of patience down the line. Getting close to vacation time, we cut back on eating out and do a little more coupon clipping to make sure we’re covered for those installments. But when you’re planning for savings over the course of a year, it really puts your goals into sharp perspective and makes your “why” a lot easier to see. It also has the added benefit of giving you clearly observable progress, week by week.
And hey, if you don’t end up going on vacation, there’s nothing stopping you from buying something nice, doing a little home makeover, or even putting that money into your nest egg. However you slice it, a clearly defined savings plan that increases just a little at a time is the best way to plan for a big goal!
Comment below, and let us know what you do to save up for big family fun or personal targets.