Savings Plan for Holidays
This post is a bit boring. There is no Great Wall of China, no tropical beaches, no desert oasis and no cute little monkeys from South East Asia. This post is about how to work out a savings plan for holidays.
At the end of the day, it all boils down to minimising debt, being super strict with spending and making travel your priority. If you are new to travelling, you may be surprised at how cheap some destinations are. For extra tips on travelling cheaply, see my post on How to travel cheaper.
Work Out Your Savings Plan
STEP 1 – work out income:
Write down all of your income as a weekly amount.
STEP 2 – work out expenses:
Write down all of your regular expenses as a weekly cost. You need to include EVERY expense, including small things like morning coffee purchases. I know they only cost a few dollars but they REALLY add up. Don’t fib to yourself about how much you smoke, or spend on small things like takeaway lunch or this process won’t work.
STEP 3 – work out larger expenses:
Write down all of your monthly and yearly expenses (such as insurance premiums or car registration), and convert them to a weekly amount. For e.g. my car registration is $680 per year, so I need to set aside $13.10 every week for it in a bank account if I am to afford the bill.
Do this for absolutely EVERY expense, including an amount for christmas and birthday presents. This step is really crucial because these kind of expenses quickly eat up any holiday savings you might have.
STEP 4 – analyse and work out how much you can afford to put away for holidays:
Add up and analyse these figures. If you are spending more than you earn, then obviously you need to change your lifestyle ASAP. See my post on ways to save money.
If you have $30 left over every week, start saving it now and stop wasting it! This would give you $1,560 after 12 months which I know from experience is enough to visit some really awesome places.
STEP 5 – start saving:
Open a bank account for holiday savings, and make sure there is no card attached. You don’t want to be able to access these funds easily! Every week transfer your regular holiday savings amount into it as SOON as you get paid. If you don’t do this straight away, I guarantee it won’t be there at the end of the week.
Endeavour to save more when you can. For e.g. if you have a weekly shopping budget of $170 and only spend $150, then you have another $20 you can save that week.
STEP 6 – review:
Repeat Steps 1 – 4 every few months to ensure you are on track.
STEP 7 – be strict with steps 1 to 6.
This is the hard part. However, unless you are loaded you will need to make travel savings your priority until your goal is reached. Ask yourself before you buy anything, ‘do I really need this?‘ or do I just want it.
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