Budget For Travel 1 Way
There is the necessity to budget for travel if you want to ensure that it becomes a part of your expenses. I used to be one that would plan a trip in advance with actually budgeting for it. Confessional time: I used to put my travel expenses on my credit card without having the money for the trip. This is sometimes people don’t talk about really is how are they funding these glamourous trips that you see photos on Instagram and Facebook.
Now I am reformed as becoming a part of debt-free community I no longer make these mistakes. I preplan my travel for the year and I save upfront. Its nothing better than going on vacation and coming back without the credit card travel debt. It’s really a trap to get you further and further in debt. I now use my credit card reasonable as they are great tools to earn reward points and miles if used responsibly and if the card is paid off each month.
BUDGET FOR TRAVEL USE A SINK FUND
Travel is so important to me that I actually have a sinking fund to support my addiction to travel. Sinking funds are a concept I did not hear of before but so many financial literacy advocates such as Dave Ramsey recommend sinking funds. He even encourages setting up one for Christmas. Websites such as CNBC also discuss sinking funds and how beneficial they can be to budgeting.
What’s a sinking fund?
Is an expected expense that you know is coming it is a budgeted amount that you save each month to meet a goal for the year. For example, let’s say you like to vacation and know that on average you spend $3,000 a year on vacations. You would put aside $250 a month for 12 months. This is ideal because you do not go into debt by using a credit card to fund your vacation.
You also come back from vacation knowing you have peace of mind as you won’t have this recurring debt every month to service. This is defintely the best way to vacation and I am grateful that I learned about this method of saving in advance for something that is such a priority for me.
BUDGET FOR TRAVEL WHERE TO SAVE TRAVEL SINKFUND
Best place to save this money?
In a separate account so that you do not touch it and only use it for travel. This requires discipline however if you live on a budget it makes things so much easy. Say goodbye to coming home to pay for your vacation. You vacation will be paid for before you travel when you come back you only have fond memories of your trip and not reoccurring monthly credit card debt.
How do you fund your travel?