I recently fell in love with traveling. I have been on 6 trips in the last two years. I have 3 more in the works for 2012. I have a lot of financial responsibilities like most Americans. So how do I manage all my bills and still pay for all of these vacations, while achieving my financial goals? It is not easy, but anyone can do it if you have discipline. Here are some tips that can help you save for your next vacation:
1). Research- If you have a certain destination in mind, research the cost of the flight and hotels in that city or country. Include your discretionary costs as well to be prepared. Also, be sure to compare prices. It’s doesn’t make sense to pay more when you don’t have to.
2). Create a savings plan- Once you have estimated all your costs, divide the amount by number of months left until your trip and add this amount to your current budget. Usually I plan a trip 6 months in advance. So I would divide my total trip costs by 6, then I divide that dollar amount by 4 (the number of times I receive a paycheck) and make deposits every payday. Another option is creating an annual budget. Since I go on at least one trip every year, my vacation budget starts at $1000. I allocate 10%-15% of net pay each pay period to my special vacation savings via automatic transfers. If you are planning a big getaway, use resources likeSmarty Pig.
3). Book online and in advance-Use the internet to research and pay for the cost of flights and hotels. Many reservation call centers will charge a fee for booking over the phone. Also, you should always book flights, hotels, rental cars, etc. on Tuesday or Wednesday. Majority of airlines drop rates on that day and rental cars are plentiful. You should book flights and hotels at least 8 weeks in advance to ensure availability. Rental cars are tricky. If you are going to a city that has a major event happening during your vacation, it is best to book a rental car as soon as you can. Otherwise, I would shop around until 4 weeks before your vacation.
4). Bundle your bookings- Use Expedia, Hotwire, or Bookit to create a custom vacation package deal. These are my favorite travel websites. But there are so many more that offer great discounts and rates. You can save 20% to 75% when you bundle. Hotels contact these companies to help sell their rooms to reach full occupancy. Each company sells a “block” (a predetermined number of rooms) at a set price for a specified time. So it’s best to shop the competition and compare rates on the travel sites.
5). Use special financing options: BillMeLater has partnerships with various airlines, travel companies, etc. Many of these companies accept BillMeLater as a form of payment with a 6-no interest, no payments financing offer. Using a credit account that offers same-as-cash deals are always a great deal in my book. However, the key is you have to be disciplined enough to make your payments on time and before the promotion period ends.
6). Be resourceful and creative- Going to a town where relatives live? Look them up, and let them know you will be in town. In most cases your relatives will offer you a place to sleep, thus helping you save on hotel costs. If they offer to be your chauffeur, you will curb rental car costs. Take public transportation and get a true glimpse of the inner city, instead of cabs and car services. And another novel idea: walk through the city! You will get a better view and exercise at the same time.
Here are examples of my vacations and how much I saved. As I learned to research better, my savings increased each trip. 2 of these trips were paid with BillMeLater on 6-month, no interest payment plan.
February 2011: Los Angeles, CA
-Number of Travelers with me: 1
- Air Tran: $600 roundtrip
-Hotwire: 3-Star Hotel (1 double room, 4 nights) and Full Size Sedan Car: $437
-Saved $ 158 by bundling
-Cost per person per month= $87 each month for 6 months
August 2011: Philadelphia, PA and New York (Times Square & Harlem)
-Number of Travelers with me: 0
-Air Tran: $335 roundtrip (includes priority seat fees)
-Hotel: $0 Stayed with a friend
-Mega Bus to NYC- $40 roundtrip
-Public transportation- $80
-Saved $ 315 by not booking a hotel or a rental car.
-Paid with my Vacation savings
October 2011: Atlanta, GA
-Number of Travelers with me: 3
-Air Tran: $1,172 roundtrip
-Hotwire: 3-Star Hotel (3 double rooms, 3 nights) and SUV Rental: $792
-Saved $ 215 by bundling
-Cost per person per month= $82 each month for 6 months
I love to hang out with family and friends. Who doesn’t, right? Recently, I noticed that I spend most of my free time hanging out, and I spend a lot of funds doing so. Now I have to ask myself: When is enough “enough”? I honestly believe that I can save some money, and still have some fun.
I keep a schedule of budget and my cash flow in an Excel spreadsheet. I typically review it 3 to 4 times a month to see if I am staying within my limits. But I never established a true limit for entertainment and dining out. I thought I could go without hanging out. The truth is I tried and felt extremely bored. It’s time that I find a common ground for my financial goals and my social life.
I reviewed my budgets and spending from August through October of this year. I spent $775.91 during this time frame. This averages to $258.64 each month. Needless to say, I am so ashamed. I could have paid for an upcoming vacation with these funds.
My approach to my problem is simple: Make a plan and work the plan. The new plan is to cap all my entertainment expenditures to $120 each month. This should allow me enough “wiggle room” between work, my social calendar, and my financial goals. After all, I did not include a boring life in my 3 year plan and the first step in my plan is to be realistic in regards to my money habits.
To work this plan, I feel that physically drawing out $120 each month to spend force me to stay within that boundary. It’s a form of an adult allowance, and to be honest I miss the days when I did get an allowance. The excess funds will have to be deposited in the safest place I know: my online savings account for emergencies. By doing this, I will be implementing one of my favorite money principles: Out of sight, out of my mind.
Also, I have to change my social habits as well so I can stretch that $120. Two simple changes should do it. The first change I will have to make is eating before I meet up with my girls for cocktails. If I did this every time I went out between August and October, I would have saved approximately $ $250. The second habit I will have to implement is a drink maximum along with a drink price limit. I am the type that loves the $15 martini. By sticking to a 3-$10-drink maximum once a week, I could save $120 each month.
Making these small changes should put me on a path that leads to my financial goal… leaving many happy hour celebrations behind.
Do you know your limits? Post a comment or question.
"Putting My Money Where My Mouth Is" is a journal about real life experiences and concerns of Jéneen R. Perkins. The purpose of the blog is to exhibit the real life challenges and answer the tough questions posed by the concepts of business, entrepreneurship and money.