4 Ways To Save Money for Your Vacation
You need a vacation every so often to refresh your mind and reinvigorate your soul. But the reality of life is that you can’t always afford a vacation. For many households, a vacation is only possible by delaying some other expense or by using credit cards. Both strategies may work one or two times, but neither is a sustainable source of vacation money.
The only way to fund your vacation responsibly is to create a vacation savings fund. You should consider the deposit of money into that fund as one of your regular expenses–you do it every month, whether you feel like you can afford it or not. Unfortunately, this is far easier said than done. When you are living paycheck to paycheck, or close to it, you can "try" to save year-round, and still end up with no money to show for it.
That’s why you have to trick yourself into saving up your vacation dollar. Here are four strategies to help you do just that.
Use automatic transfers
An easy vacation savings strategy is to set up automatic transfers to move money from your checking account to your vacation savings fund. This works best if you schedule the transfer to occur on the same day you deposit your paycheck. That way, you won’t have to worry about overdrawing your checking account accidentally.
The key here is to ignore the existence of that vacation savings account. Your savings efforts will be foiled if you dip into the account anytime you need some cash. You might set up the transfer and then ask your bank if you can remove that account from your online banking interface.
Manage credit card debt
Do you roll over balances on more than one credit card? If so, you have an opportunity to free up some vacation cash. Start paying the minimum payment on the card with the higher balance. Then pay as much as you can afford on the card with the lower balance. Once you pay off the lower balance completely, you have one fewer monthly payment to make each month. The amount that you were paying to the lower balance card can be split between the other credit account and your vacation savings account.
Hide your raise
Your next raise at work could be your ticket to vacation savings. Take the amount by which your paycheck increases and stash it away into your vacation savings account. You might use automatic funds transfers, so you don’t have the chance to spend the money elsewhere.
Use your payroll deductions
If you really don’t trust yourself with any savings at all, have Uncle Sam save the money for you. Change your payroll deductions so that you are paying higher payroll taxes for every check. You’ll get a year’s accumulation of those higher taxes as a tax refund in the spring. Deposit your tax refund check and then start booking your trip.
Note that this strategy only works if you currently tend to break-even on taxes every year. If you weren’t paying enough in payroll taxes to start with, the increase will keep you from owing money at year-end. However, if you are used to paying taxes every spring, you may be spared that regular expense.
Kate Rivers writes for MyCitiesGuide.com where you can browse vacation ideas and build custom vacation itineraries.
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Tags: saving, vacation planning, vacation savings
