After graduating college and joining the workforce in 2013, the first thing I wanted to do was save up for a trip to my favorite place, Japan! To take the first step towards my goal, I had to figure out where I was spending my money so that I could realistically cut back spending and start saving. That was the start of my budgeting journey!
If you are reading this blog, you are probably passionate, motivated, and very busy. I bet you have a multitude of fun projects and trips in the works. Maybe you are building your very own home gym or saving to go backpacking in Europe or even creating an art business on Etsy. Whatever it may be, determining a smart and realistic budget is the right way to get started.
In the “Realistic Savings Goals Series” we will explore tried and true methods used to save up for a variety of goals.
Today we will discuss how to save for a trip, either domestic or international travel. This method will help you create a manageable savings schedule.
Five Step Process to Save for Travel
- Determine the overall cost. When I was planning my trip to Japan, I thoroughly researched the cost of airfare, housing, food, local transportation, and even souvenirs. It is better to be safe and go a little overboard than to have your savings pool run out halfway through your trip.
- Determine your timeline. When is the soonest you can depart? Figure out your ideal vacation date and then work backwards to do the math. Let’s say you want to save up $1000 for a trip to California, and you have five months to save. $1000/5 months = $200 a month you need to save.
- Determine if it is realistic. Would $200 a month be possible to cut out of your current budget? Maybe you decide to spend less on going out to eat or don’t add to your emergency savings goal for a month or two. If you don’t feel comfortable with this plan, it is time to rethink your departure date. If you wait a total of eight months: $1000/8 months = $125 a month. This turns into about $30 a week. Is this more realistic? If not, keep working backwards.
- Stick to your budget! The hardest part of any budget is sticking to your plan. Some tricks I’ve used in the past include updating my budget spreadsheet weekly (instead of monthly), setting alerts on Mint.com (when I overspend in a category), or taking out cash instead of aimlessly spending with credit cards. Let me know what tricks you use!
- Record everything. Every time I return from a trip, I’m itching to plan the next one. If you record all of your costs (from airfare to snacks) in a separate spreadsheet during or after your trip, this makes budgeting for future travels easier and more realistic. It also is fun (for me!) to compare what you expected to spend versus what you actually spent. Sometimes this is possible to do in your monthly budget, but most trip expenses span multiple months, such as the day you buy airline tickets months ahead or book hotels a few weeks ahead. Keeping everything together in one place is a great way to simplify saving for your next trip!
Bonus: Travel Checklist
There are a lot of expenses to consider when traveling, this checklist covers the basics. If you can think of anything I am missing, let me know, and I will continue to make the list more comprehensive!
- Airfare – Take advantage of price tracking sites like Kayak, Cheapoair, Skyscanner, Mobissimo to determine the best time to buy affordable tickets. Tuesdays are generally the cheapest day to buy tickets!
- Housing – Consider the costs for all housing options such as hostels, AirBnB, or hotels. Consider joining an awards club for free nights or deals. If you stay with friends and like to bring gifts to your hosts, don’t forget to budget for those too!
- Sightseeing and Activities – Do research before you go! What are the top places to see and how much are they? Are there city or combination passes that include a lot of these locations?
- Food – Determine average cost of breakfast, lunch, dinner, and snacks at your destination. Look up unexpected costs of that particular destination, such as places that charge for tap water and bread. If you want to want to save money, think about stopping at a grocery store for breakfast items, snacks, or even food to cook if you are staying somewhere with a kitchen.
- Transportation – Will you be using taxis, trains, subways, renting a car, or walking? Be sure to look up if your location has a special rate for all-you-can-ride for 24 hours, 3 days, or a week!
- Souvenirs – Before you leave, make a list of friends and family for whom you want to buy souvenirs and how much you are willing to spend on each person. Be sure to calculate how much you want to spend on yourself as well.
- Luggage – If your purse, backpack, or suitcase needs to be updated before you leave, you may want to add this into the overall cost of your trip.