Overview: These professional financial tips will help you plan the perfect summer vacation on a budget
With summer finally here, many of us are ready to be on that summer vacation. Planning the actual trip, though, could present many challenges – namely, budget. So let’s discuss how 4 simple tips that will help make your summer vacation more affordable (saving both on time and money).
While this blog won’t teach you how to hunt for the lowest prices or best values for your upcoming vacation, you’ll learn other aspects of vacation-planning budgeting through the lens of our financial expertise.
1. Prepay For The Vacation
The first and biggest component to making any vacation more affordable from a money perspective is to prepay for the vacation.
Paying for just about anything with cash upfront makes the purchase less detrimental to the buyer because you won’t have to worry about the debt of the purchase looming over your shoulder.
To do this, the Smith Marion team suggests that you begin funding a revolving trip fund starting now. An easy way to do this is to deposit $50, $100, $150, or $200 every Friday (or payday) into the location of your choice. A few good places to deposit these funds are a separate savings account or a box in your residence.
The most important part of this system is to completely separate this money from your checking account (so don’t just reserve the funds).
2. Wait for Busy Season to Pass
We recommend that you plan to take your vacation about two weeks after a busy season or cycle. Depending on the nature of your work, this can be an obvious period of time. However, if there isn’t a period of time like this available to you, select the period of time that would be easiest to work from out of the office.
3. Pick a Location & Set a Budget
The final item is to pick a location and set a budget. There is no simple way to set a budget for a location, so focus on what you want to achieve on the vacation. Whether it’s sitting by a body of water, or being surrounded by nature, or exploring a new location, just set your budget based on what you want to achieve with your time away from work.
4: Finalize Plans (Calculations + Saving):
Once you’ve gone through all three tips, you can begin the final planning for your vacation! In this step, you can calculate either how much you need to save per week and the amount of time you need to save.
We suggest planning to purchase your tickets as many months in advance as possible (in the case of traveling, we believe there’s no such thing as “too early planning”). We typically purchase our tickets 3-4 months before the actual vacation.
Now that the vacation is scheduled and paid for by funds that were saved, you can save for the last part – to save for the spending money while you are on vacation.
Since you paid for your vacation 3-4 months before you left, that leaves you with 12-16 weeks to keep saving money to cover items like food, drinks, and activities while on your trip.
Happy summer and happy vacationing!
Carlos Carazo, EA, CPA