How to Budget for Your Dream Vacation

If you have a dream vacation, then you should know that you can make that dream a reality with the basic planning and budgeting tools you probably already use in your daily life. Whatever your dream vacation is, given enough time and with a high enough motor, you can pull it off without resorting to secured loans and other borrowing options.

Get Your Household and Savings Budget in Order

Personal or household budgets are an essential money management tool, and the chances of pulling off a vacation budget are far less if you don’t already manage a household budget. If you don’t how, learn to budget. It isn’t hard. It doesn’t require advanced math skills, and while it can be a little intimidating at first, it will give you greater control and understanding over what you take in and what you send out. Better yet, this is the foundation upon which your dream vacation will be realized.

Starting Planning Early

Many people begin planning in January for vacations they’ll take that summer, and while it’s great if you have those means, it isn’t the best way to save for a dream vacation. Dream vacation suggests something bigger and better than normal. Let’s say your dream vacation will cost $5,000. If you start planning a year out, you’ll have to figure out how to save or earn about $13.70 a day. If you start planning three years out, then the amount shrinks to about $4.57.

Setting Money Aside: Reduce Spending

Whether you need $4.57 or $13.70, you need to figure out how to set that money aside. One of the most practical ways to do that is to lower your expenses so you have a greater surplus. Let’s say you give yourself $150 in spending cash each week. If you cut that down to $125, then you’ve just gained about $3.57 a day toward your goal. Little things like making your own coffee or packing your own lunch can make a huge difference over the course of a year or longer.

Setting Money Aside: Increase Income

The other way to increase your surplus is to increase your income. Perhaps a promotion in your career is still some ways off, but that’s OK since there are other ways to earn more, and you don’t necessarily have to take on a second job. Something as simple as a yard sale can add a nice junk of money toward your goal. Seasonal work is a good option too. A few hours a week during summer or the holiday season can really reduce what you need on a per-day basis to meet your goal.

How to Save Your Money

The means you choose through which to save your money can be an important factor, and your saving strategies should change based on your goals and the circumstances. Some people can save their vacation dollars in a sock drawer. Other people will spend it. If you’re a spender, consider opening a savings account at someplace other than where you bank normally. Make it a hassle to access the money, and if you’re a year or more out, there are savings accounts available that offer better rates in return for restricted access, such as not allowing or penalizing you for early withdrawal.

Stretch Your Vacation Dollars

Affording your dream vacation isn’t just about saving more money but also doing more with the money you will have. Just as you’ll look for ways to spend less at home, look for ways to spend less on your vacation. Don’t cut corners in areas that will diminish your experience, but prioritize your activities, identify aspects that matter less and find ways to spend less on those items. Traveling during the off-season, fixing your own lunches or opting for public transportation are all choices that can significantly reduce the cost of your dream vacation.

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