Creating a spending plan to save for next summer break
Planning ahead can make saving for summer vacations a little less stressful.
The typical cost of a summer vacation is $583 for domestic travel and over $3200 for international trips, according to the Bureau of Labor Statistics. Summer breaks allow time to refresh, relax, and rejuvenate. They may also provide time to visit family and friends or new places. The expense of trips can throw a budget off, costing extra stress and interest payments on a credit card for many months. Start planning for next year’s summer break starting now. This commitment will make it easier to fit into your spending plan.
It is important to save for occasional expenses, like summer vacations, according to the Your Money Your Goals toolkit. While you may already be dreaming of where you will go and what you will do next year, it still may be hard to come up with all the money you will need. First, you have to make the decision to save.
- You can decrease spending on one item or many things. The easiest way to save is to cut a major expense. If that is not doable, you may have to cut back on several smaller costs. Is there spending that can be eliminated? Can you realistically reduce spending on some items and what is your strategy to make that happen?
- Turn the money you are saving—by spending less—into savings. This is a big challenge and requires you decide on a place like a jar or envelope, and then moving the accumulated cash into a savings account.
- You can also increase your income. This can mean taking on another part-time job or ensuring you file your taxes and claim tax credits you qualify for. Again, you must make sure that some of your new income is moved into the place where you have decided to use for saving.
To turn your goal into a financial target, you need two pieces of information. Add up a total estimate of how much your summer break will cost, including transportation, meals, entertainment and any other spending. Look at a calendar to determine how many weeks or months you have before you plan to go. Then break down this number into how much you will need to save each week or month to meet your goal.
If you receive a regular paycheck, you can build savings through direct deposit into a bank account or onto a payroll card. Your plan builds your own personal safety net one paycheck at a time to reach your goal by next summer.
As you build savings, you can have peace of mind knowing that you have funds, a little at a time, set aside for next summer’s plans. And you will save money by avoiding the interest costs from borrowing on credit. Financial planning takes time, patience, and discipline. Find more information about the reasons for and ways to save at MIMoneyHealth.org.