Saving for a Vacation
With spring break right around the corner, many are beginning to think about their next vacation—and their bank account.
It turns out planning a vacation is good for both your spirit and your finances. Taking a vacation is something everyone should do because it helps you relax and get away from day-to-day chores. The key is planning in advance so you know all of your expenses are covered without creating new debt or other financial obligations.
BMO Harris Bank suggests four steps to make taking a vacation possible in 2013:
Create a vacation budget. The first step is deciding how much you want to spend on your vacation. Is it a weekend getaway or a weeklong excursion? You need to know how much travel, lodging, a rental car, dining and entertainment will cost. You can then divide it up between the months until your vacation to give you a ballpark figure for how much you need to save.
Open a separate vacation savings account. This allows you to watch your money grow and also keep you less tempted to spend it on other expenses. To make saving even easier, you can use an auto savings program to transfer a predetermined amount of money at set times during the month from your checking to savings account.
Save a portion of your tax refund. Also consider saving any work bonuses, gift money and even the loose change you have in your wallet or pockets at the end of the day. Many people are surprised that even small amounts can quickly add up.
Try a one week spending fast. Once a month, try spending as little as possible over the course of one week. For example, don’t spend money on coffee, lunch, going to the movies or happy hour with your coworkers. Instead, take that money and put it in your vacation savings account.