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Increasing your Financial IQ

Budgeting for Goals: Vacation

Budgeting for Goals

You can set a budget for a vacation the same way you budget for other annual expenses. Take the one-time amount and divide it by 12 months, then plug that number into your monthly expenses. But making room in your budget for that extra monthly expense is the tricky part.

Here are some tips to help you afford a nice vacation:

  • Pick a couple of months throughout the year to skip eating out altogether. The money you save here can add several hundred dollars to your vacation budget, and you’ll make up for the missed meals out while you’re on your trip.
  • Bike, walk, or carpool whenever possible. If you save one tank of gas per month, that’s another $30-$50 you can contribute to your vacation.
  • Cancel your cable (unless you’re under contract). Cable packages can cost you anywhere from $40-$80 a month. Subscriptions to video streaming services are less than $10 a month, and some networks stream past episodes of their shows on their website.
  • Pick up extra hours or side jobs. If you have the option to earn overtime at work, an extra shift every couple of weeks can fund your monthly vacation savings. If you’re salaried, you can look for odd jobs such as babysitting or lawn care (shoveling snow in the winter).
  • Use your regular expenses to pay for your vacation. Many credit cards and even some debit cards come with rewards that include free travel. Put all your regular monthly expenses on one of these cards BUT be sure you stick with your budget/or and pay them off.

If these options don’t work for you, consider a less expensive vacation option. Camping is much cheaper than staying in a hotel. Preparing your own meals will cut down on vacation costs as well.