Posted by Carter | Under How to Plan an International Vacation, Travel Tips
Wednesday Apr 23, 2014
How to Budget Effectively for Your Fantasy Vacation
EXPECTATIONS: Priorities, Patience & Perspective
We all have different expectations when it comes to picturing a fantasy vacation. Days spent lounging on sun-drenched beaches, exploring landscapes steeped in history, thrill-seeking amusement parks or adventure sports—with so many exciting options, how do you effectively budget for your vacation?
PRIORITIES: Begin by deciding what type of travel will be most fulfilling for you. If you’re traveling with others, this will be a process requiring more consideration and compromise. Don’t decide on what you think you should do, make your decision based on what you want to do.
PERSPECTIVE: Travel planning is one-part finances, one-part planning, and one-part perspective. YES, perspective! Foster an attitude of successful positivity that can overcome hurdles when things aren’t going according to plan. Keep your eyes on the prize and relax!
SETTING GOALS: Keep Your Eyes on the Prize
There are mixed feelings as to whether you should establish your finances first, and set travel goals after, or vice versa. I am firmly in the second camp. While your finances absolutely come into play when determining your travel destiny, you shouldn’t be planning what may very well be a once-in-a-lifetime vacation based solely on economy! As with anything worth having, your dream vacation is worth waiting for. Don’t get hung up on how long it may take to reach your goal, focus on the fact that you CAN get there!
For the most part your travel expenses are the same expenses that you incur on a daily basis at home, just accrued on a greater scale in a narrower time frame.
Transportation and accommodations will have one of the largest immediate financial impacts on your budget. Purchasing plane tickets, arranging a car rental, or securing lodging are areas where you can save money if your book sooner rather than later.
What prospective travelers often don’t realize is that shopping around for the best price is more than looking for the best rate with a specific company; your departure and arrival locations and times also dictate how much you’ll pay, so compare and contrast these as well.
Once you’ve established where you want to go, and what you’d like to do there, reassess where your money’s being funneled and how to make changes to your spending habits.
REASSESSING YOUR EXPENDITURES: Paring Down
We are a society of consumers, or as I prefer to refer to it, “economy stimulators.” I mapped out my own finances again recently, while planning an upcoming trip, I was shocked at how far I’d fallen off the budget wagon. While I don’t buy much in the way of tangible goods, the restaurant industry receives a generous share of my paycheck every week. Here’s a quick example of how I revamped some my expenditures without sacrificing my social lifestyle.
$25/$50 per week versus $25 every three weeks
Instead of visiting the coffee shop five days a week, I go once a week, and also purchased a 12-cup coffee pot for my department. Co-workers chip in on grounds to keep a steady flow of caffeine through our veins.
$90/$125 per week versus $50 per week.
Living Social, Groupon, & Restaurant.com are a few of my favorite options available that make dining out less expensive, and also introduced me to establishments I might never have tried otherwise!
Enjoying a round (or two) of libations out with friends, or going to a movie are common social activities. As an alternative, opt for a night in and ask everyone to bring a beverage to share. Make it a game night or watch a movie from Netflix. I’ve found that you can enjoy all the camaraderie, while saving everyone a little extra dinero.
Take at least two weeks and chronicle all your expenses, from a snack out of the vending machine, to your car payment. There are numerous financial apps for smart-phones in addition to those for your PC. I’ve been successful utilizing the simple Expense Tracker by AppCheer Inc., while a co-worker advocates for Mint, which are both free apps. A friend tried YNAB (You Need a Budget), which offers a free 34-day free trial. More than enough time to make an assessment of your finances—he liked it enough to buy it! Next, take this information and apply it to reorganizing your spending and savings.
CREATING A BUDGET: That You Can Live With
Now that you know where your money’s going, buckle down. Creating a budget is the least spontaneous part of the travel planning process, but as with any important financial investment “(and planning a trip IS an important financial investment)”, you need a realistic idea of what you have to work with. This is the foundation on which your travel planning is built.
I recommend allotting your cumulative funds into five categories: Non-negotiable, entertainment pre-travel, travel, and emergency.
◙Non-negotiable: Rent/mortgage, insurance, groceries etc. that are essentially inescapable necessities.
◙Entertainment: Simplify and find alternative entertainment. Enjoy a full life, while contributing to your travel funds. Too much sacrifice isn’t good either!
◙Pre-travel: Book any advance purchase items like plane tickets, car rental, lodging and travel insurance. Try to borrow suitcases, backpacks, electronics adaptors, activity or weather relevant clothing from friends and family members. Look for second-hand items next, and buy new only when the other avenues have been exhausted.
◙Travel: These funds are for your entertainment, sustenance, souvenir, exchange rate, and emergency travel budget categories.
◙Emergency: This is your “just in case” fund to accompany your non-negotiable spending, because this will help ensure you don’t dip into your travel funds when unexpected things happen.
Any additional monies that come your way, say from bonuses or gifts, try and spread the wealth out between your budget groups evenly.
AVOIDING TEMPTATION: Robbing Peter to Pay Paul
It is said that it takes a month to create a new habit. So, in your first month be sagacious when following your new budget, it gets easier with time, I promise! Your emergency fund should be a sufficient contingency for most things that crop up, and you still left yourself some wiggle room to live it up, so you can leave your travel resources alone to grow.
MOTIVATION: Maintaining Excitement and Enthusiasm
Find ways to keep yourself motivated during the saving and planning process.
A picture is worth 1,000 words . Take a photography class to help capture those perfect shots that will be a chronicle of your travels.
If you’ve never kept a diary or journal, start! Take a few moments each evening to write down anything and everything, including all the hard work you’re investing leading up to your vacation. Once you’re on your trip keep up the momentum of documenting your adventures. It doesn’t matter if it’s only for yourself or you choose to share your writing with friends and family, it will be a nostalgic reference and source of further inspiration for you later! Watch a foreign film from your expected travel destination, or join a pen pal program. The possibilities are endless!
Stay engaged, stay positive, and you’ll get there!
SAVINGS WITH KEMWEL: We’re Here to Help
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