Want to leave the country? If you’re thinking “yes, but my wallet might feel it,” then you need a plan! Any vacation is going to be a drain on your finances, especially if you leave the country. You will usually need at least two weeks to enjoy the sights, and that means time off from work. So, how do you pay for the trip and your expenses, knowing you’re looking at a loss down the road? The solution is saving, and here’s how it’s done.
Begin with a good interest bearing savings account where you can place your money. This should be separate from your usual bank accounts, and difficult to move money from. That way, you’re not tempted to spend. Interest is typically calculated based on an annual percentage yield, or APY. Putting even small amounts into this account will grow your money within a year. Within two, you’ll be ready to book something for sure.
Whenever you can, use installment plans to try and pay for things related to your trip as a form of saving. For example, book a plane ticket on your credit card for 6 months in advance and pay it off bit by bit. You will pay interest on that debt, but you’ll also pay it down slowly and avoid the shock of the upfront fee.
If you set goals for your trip and find some dollar amounts that are real, you can easily do the math and figure out what you need to save in order to achieve your goal of vacationing. Then, you can enjoy your guilt free trip.
About the Author: Samuel Phineas Upham is an investor at a family office/hedgefund, where he focuses on special situation illiquid investing. Before this position, Samuel Phineas Upham was working at Morgan Stanley in the Media & Technology group. You may contact Samuel Phineas Upham on his Facebook page.