Realistic Savings Goals: Travel Edition

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.

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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

  1. 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.
  2. 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.
  3. 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.
  4. 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!
  5. 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!

  1. 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!
  2. 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!
  3. 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?
  4. 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.
  5. 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!
  6. 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.
  7. 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.

Starter Budgeting Spreadsheet (Part 2)

In our last post we talked about the Starter Budgeting Spreadsheet. Since this may be the first time you are doing any sort of budgeting, I wanted to provide clear and concise steps to get you started! By the end of this post I know you will be much more comfortable and confident with the process!

Goal for this Week: Review September 2017 income and expenses

Resources Needed: Budgeting Spreadsheet and an account with Mint.com (Sophie’s Top 5 Reasons for Using Mint.com)

Estimated Time: One hour or less

Let’s begin!

  1. Open up your editable copy of the starter budgeting spreadsheet in Google Drive or Excel.
  2. Login to your Mint.com account. Open the Transactions page and export all transactions via the link at the bottom of the page.
  3. The Mint.com export comes in .csv format, you can open this with either with Google Spreadsheets or Excel. Then open your starter budgeting spreadsheet in an adjacent window for easy access.
  4. Manually copy and paste each transaction from September to the appropriate section of your spreadsheet. See how to format the spreadsheet in the “Sample Version” tab of the Starter Budgeting Spreadsheet or in the screenshot below.
  5. Finally, spend a few minutes reviewing the end result. The totals in Column C will automatically add up due to embedded formulas, but it is good to double check that all of your entries are being “summed” correctly.
  6. If you have any trouble using the spreadsheet or find the formulas are not working, please feel free to Contact Me! As we talked about last week, remember that it is a work in progress, and I bet you can quickly find ways to update the spreadsheet to make it easier to use. I encourage you to make it your own!

Congratulations! You are done with September’s budgeting spreadsheet!

Look at the totals for each category and your final profit or loss for the month.

Does it surprise you? Were there any categories that you spent more or less than you expected? I am sure right away you can identify some areas that you could save in for next month!

As you get more comfortable reviewing your finances each month, I strongly recommend updating the spreadsheet to fit your lifestyle. For example, it might be helpful to add new categories in Column A such as public transportation costs, student loan repayments, or specific savings goals for travel or weddings.

Later we will learn how to analyze and review the results in detail to help you confidently create a budget that fits your spending habits and savings goals. Please follow Sophie Explains on Facebook for the latest updates!

Note on adding transactions manually: Although it seems tedious to copy and paste each value of every transaction monthly, I find it essential to identify any red flags, such as recurring payments you thought you had cancelled or abnormal credit card purchases.

Keep in mind that manually adding each transaction can lead to error (as we are only human). Use a method that helps you identify which transactions you’ve transferred to your budget. My preferred method is to highlight rows on the exported Mint.com spreadsheet once I have added them to my budget so I do not miss or duplicate any transactions. Good luck!