Tips on Saving for a Family Vacation
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Is there a family vacation that you wish you could have taken this last year? Family vacations are a lot of fun, but they can also put quite the strain on your budget. This year instead of putting your annual family vacation on the credit card, plan for it ahead of time and start saving up.
There are some big benefits to planning and saving for your family vacation. The main one is that you don’t have to go into consumer debt to make it happen. No credit card bills to worry about and no interest to pay for weeks and months to come. Instead you and your family can enjoy the vacation you can afford. As an added bonus you’ll have a lot more breathing room financially come next Christmas (or any other time a little extra cash comes in handy.)
Doesn’t that sound a lot better than coming home dreading the next credit card statement and hoping and praying that no other unexpected expense creeps up until you’ve had time to pay off your vacation?
We’ll walk through a simple step-by-step process that has allowed us to put away a little money here and there into a vacation fund. We like knowing that we will be able to spend our vacation “worry-free” from coming home with debt from our vacation.
Once you have started your vacation fund, that fund will be there to cover your expenses come summer, winter, spring or whatever time of the year you decide to take that long awaited family vacation. That being said, here are the tips that we are excited to share with you!
Budget In Your Vacation
Your first step is to add a family vacation fund to your budget. This works even if you don’t already have a personal budget. Take a little time this week to sit down and figure out what you’re bringing in each month and then add up your usual expenses. Doing this should give you a pretty good idea on how much financial wiggle room you have each month for things like entertainment, gifts, and your new vacation fund.
Get started by getting out a notebook and pen, or opening a spreadsheet on your computer.
Record Your Income:
Start with all the money you have coming in throughout the month. This will include things like
- Your paycheck
- Overtime and bonuses
- Income from Interest and Investments
- Income from a part time job or little jobs like babysitting, yard work, etc.
- Rental Income
For most of us, this will mostly just mean our paycheck. If you need to beef up the income column a little to pay for your annual vacation, consider picking up a little part time job or look into doing something like Tupperware, Mary Kay, or Avon to bring in a little extra cash each month.
Record Your Fixed Expenses
Next you want to look at fixed expenses. Record them in a different column in your spreadsheet. These are all your regular bills that mostly stay the same month after month and are also usually things you can’t easily change or reduce.
Your fixed expenses include things like:
- Rent or Mortgage
- Car Payments
- Cable, Phone and Internet
- Other Loan Payments (i.e. student loans)
Record Your Variable Expenses:
The last thing we want to track is the various things we pay for throughout the month. These are things that either change from one month to the next, or are things you pay for only once in a while. Groceries are a perfect example of the first instance, a bill from the dentist or a new pair of boots an example of the second.
Here are a few more examples of typical variable expenses:
- School supplies
- Medical and Dental Bills
- School Functions / Fundraising
- Hair and Makeup
Of course your family’s list will vary. The best way to get a feel for these expenses and how much you spend on them each month is to record them in your spreadsheet for a few months.
Yes, it takes some time and effort to write them down each day or week, but it is an exercise well worth it. This category of expenses often gives you the biggest opportunities to cut back and save more for your vacation and any other savings goals you may have.
Some expenses in here are non-negotiable. Medical and Dental bills will have to be paid and not going to see the doctor when you’re sick or have a medical condition is probably not a good idea.
But others have huge opportunities for savings. Let’s start with something simple. Let’s say you go get your hair cut and colored every 4 weeks. What if you went with a slightly different style that allowed you to go 8 weeks between cuts and you start to color your hair at home. That’s a potential saving of $50 to 100 every other month.
By far your biggest savings will come from your grocery budget. You won’t believe how much you’re spending on food and how much of that is wasted in food we end up throwing away. Finding just a few little things you can do differently will save you quite a bit each week.
Here are a few simple tips.
- Start planning your meals to avoid throwing out spoiled food.
- Change to store brand options.
- Look for sales and use coupons for items you actually need and use.
- Cut back on the amount of meat you use in your dishes.
- Change from breakfast cereal to eating oatmeal in the morning.
- Eat meatless once or twice a week.
- Pack leftovers for lunch.
- Find a few frugal meals like beans and rice and fix them at least once a week.
If you don’t keep track of anything else, start paying attention to how much you spend at the grocery store. Planning your meals and only heading to the store once a week will not only make tracking what you spend easier, it will also help start your savings.
Start Setting Aside Money Regularly
Take a portion of your disposable income that you are comfortable with and set it aside each week or month. You can stick cash in a cookie jar, or even better, open a special savings account – ideally one that bears interest – and start having your monthly vacation funds sent there as soon as your paycheck hits.
By putting the vacation funds away first, before you start to pay bills, you won’t even miss it. If you wait until the end of the month when all the bills are paid and all the purchases are made, chances are that there isn’t much of anything left. Instead trying paying yourself (or in this case your vacation fund) first.
By the way, this strategy works well anytime you want to save up money no matter what it’s for -a vacation, Christmas gifts, a new car or a down payment for a house.
How much you decide to add to your vacation fund is up to you. Start small, even if it’s just $5 a week and add more as finances allow. As you get better at tracking expenses and living within your means you’ll be able to set more and more aside.
Extra Ways To Add To The Vacation Fund
Of course you don’t have to stop there. Putting $5 a month into a vacation fund may not add up to enough to pay for anything more than a 3-Day-Weekend at a cheap motel. However, if you know your ideal vacation will be well above what you’re setting aside in your monthly auto drafts, consider some extra ways to add to the vacation fund.
Start by putting extra cash throughout the year into the fund. This could be that bonus check you got, the extra pay for working overtime, the cash birthday gift from Grandma and even your tax refund.
Next see if you can beef up those monthly payments. Look through your list of expandable expenses. Could you cancel that magazine subscription or downgrade to a lower cable package? Can you consolidate your cell phones into one family plan and save a few bucks each month?
And let’s not forget about the money you spend here and there throughout the week. If you’re heading to Starbucks several times a week, to grab your favorite $7 coffee drink, consider cutting back to once a week, or making your coffee at home and funneling those savings into your vacation fund.
Start with something that seems fairly easy and that jumps out at you as you look through your weekly and monthly expenses. Let’s say it’s giving up that Starbucks habit or packing your lunch instead of going out to eat. Give it a couple of weeks and once you are used to this new routine, find something else you can save on.
After a while it almost becomes a game to see how quickly you can get the vacation fund to grow. And don’t think you have to do it all alone. Share the progress with the rest of the family and ask them how they can contribute.
If your kids are old enough to do little jobs around the neighborhood like babysitting or cutting grass, or even getting a part time job, encourage them to go do it and ask if they would like to contribute a portion of their earnings to the family vacation fund. It’s a good experience and teaches them valuable life skills about earning and budgeting money.
Of course your kids aren’t the only ones able to make a little extra money on the side. This may be just the motivation you need to get that blog going you’ve been talking about or explore selling handmade jewelry on Etsy.
Book What You Can Afford
After a couple of months of saving up, you’ll get a pretty good idea how much money you’ll have to spend by the time summer rolls around. That’s your budget and your next job is to make sure you find a vacation that fits within those means.
Don’t forget to leave some financial wiggle room for extras like ice cream, fun and spontaneous activities and anything else that sounds like fun as you go about your vacation days.
Don’t book anything that’s pricier than you can afford. The whole point of saving up was to avoid maxing out the credit card this year. You’ll be glad you stuck to that budget when you get home and find that a few weeks after you get back your washing machine dies and your kid needs new glasses.
To make that happen start working the budget. Record your income, record your expenses and review. Set aside a little money each month. It doesn’t have to be much, every little bit will help come vacation time. And don’t forget about the extra ways to add money to your vacation fund we talked about.
Keep going and see how much you can set aside for your annual vacation. Take that sum and book the best vacation you can afford. Comparison shop, make it work and head out on vacation, knowing everything is paid for. It’s a great feeling and it will make your vacation that much more relaxing and rewarding. We hope that you are able to use these tips to work towards a rewarding family vacation that will create wonderful memories with you family!
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