Don’t let a lack of savings keep you from relaxing in paradise.
As the saying goes its never too late, this summer season don’t let the lack of savings keep you from taking a vacation.
One excellent way to start on the path toward vacation freedom is to start a vacation fund and pad it in ways that don’t involve too much sacrifice or discomfort. Here’s how:
Step 1: Open a targeted-savings account.
In order to give your vacation fund an opportunity to grow and thrive on its own, you’ll need to open a separate savings account. Start by researching various online and brick-and-mortar banks for a low-fee (or no fee) account with the highest interest rate you can find. Choosing to keep your vacation fund separate from your other accounts lessens the chance of the money accidentally getting spent. Some banks also provide a separate short duration fixed deposit / sweep accounts you can try that as well.
Step 2: Look for ways to save.
If you haven’t been able to save up the cash for a trip in the past few years, you probably need to find ways to rein in your spending. A good way to discover any self-destructive spending habits is to track all your purchases for a set amount of time – try a few weeks or a month – to see where your money is actually going. You might find that you’re overspending on food or other indulgences, or your kids are bleeding you dry. Whatever the culprit of your money woes, it’s important to identify it and make it stop once and for all.
Step 3: Make it automatic.
Once you’ve identified some areas where you could be saving more, it’s important to divert those funds immediately. You know the saying, “out of sight, out of mind,” right? Do this by setting up automatic bank transfers to your new vacation fund either once a month or on every payday. Making it automatic lessens the chance you’ll forget to save and allows you to “set it and forget it.”
Step 4: Squirrel away “found money.”
Most people come across “found money” at least once per year, whether it’s in the form of a tax return, a bonus at work or cash received for birthdays or holidays. No matter the source, any money that isn’t part of your regular income should be fair game and will be right at home in your newly-created vacation fund. So squirrel it away as fast as you can. Then try to forget it’s there.
Step 5: Keep your hands out of the cookie jar.
Once your vacation fund starts growing, it’s important to practice some self-restraint. Don’t touch your vacation fund unless it is an emergency, and you have no other options. Otherwise, you’ll just end up back where you started – with no vacation fund.
With all these restraints: The next thing you know, you could find yourself relaxing on a beach, exploring a mountainside or taking in the culture of dynamic, big city. It’s all possible with a vacation fund, but only you can make it happen. Will you?