It happens to us every year: We travel out-of-state for a vacation of some sort (usually driving to visit family or just a week of relaxing using our timeshare), and we only give ourselves 2 or 3 months in which to save up. Actually, 2 is being generous 😳 – it’s more like a couple of paychecks.
Well, this year we plan to do things differently. We anticipate making 2 trips this year, and we plan to start saving for both of them now! If we can manage to put a little aside each month, then we won’t feel such a huge sting when it’s time to travel.
I know this isn’t exactly a new concept, but I fear that although most of us know this is what we should do, few of us consistently put this into practice.
Spreading The Cost Of Your Vacation
The easiest way to do this is to simply count the number of months until your trip, divide the total travel costs by that number, and then deposit that amount into savings each month. For example, if we plan to take a trip in 10 months that will cost approximately $1,000, we will simply put $100 into our savings account at the end of each month until the trip.
Depending on the mode of travel and your accommodations, this might not be possible. Many times, booking a flight well in advance will yield the best overall price. The same can be true for other types of expenses – many times hotel rooms can be more expensive depending on how close to you travel and booking dates are.
In cases where you need to book your travel well in advance, the savings account method won’t work. However, if you were to find an interest free credit card (one that gives you 6 months or a year to pay off a purchase before any interest accrues), you can spread out the payments, while getting all of the advantages of booking the trip early.
So, as in the example above, if you purchase the flight ahead of time in order to pay less for the ticket, you can still pay a certain amount each month, rather than trying to fund the entire purchase at once. As long as you pay it all within the promotional period, you will have paid less, escaped interest costs, and avoided taking a huge hit to your bank account.
I’ve written before about how we use a promotional credit card like this to spread out our car payments with no interest.
Getting Paid To Travel
Another benefit of using a credit card is that you can usually get rewards, such as miles or even cash back. Some offer this perk for travel related purchases, while others extend this to all purchases made with the card. If you combine this with a promotional period where your balance is not accruing interest, then you are saving money now, and possibly earning a discount or even free travel for your next vacation!
This is one of the biggest reasons why I don’t hate credit cards like so many pf bloggers…they can provide great benefits if used correctly!
So my hope that is that many of you will take a few minutes to consider your travel plans for the year, and start to save for them. If you are in a good financial position, then you should take advantage of a promotional offer on a credit card…preferably one that offers rewards!
photo credit: freedigitalphotos.net
- Do you normally save up for your vacations ahead of time?
- Do you currently use a rewards card to pay for travel? Any bad experiences you want to share?
- How far in advance do you usually book your vacations?
© 2014, Khaleef “Fat Guy” Crumbley. All rights reserved.