Growing up I traveled every summer, but as a college student, I couldn’t afford to travel as much. Although money was tight (we’re talking Great Recession tight), I decided that I would make travel a financial priority once I found a job and had the income to pay for it. After graduation, I saved for a year and I went on my first solo trip to Paris. But that wasn’t the only thing that I was saving for. At the time I was also working on paying off student loan debt and saving up money for a downpayment on a house. So how do you budget for travel and still take care of all your other financial responsibilities? Well, here are five tips on how to budget your trip while tackling other money goals.
How To Budget Your Trip & Save Money for Travel
1. Make travel a line item in your budget
If you want to make travel a priority, include travel as a line item in your monthly budget. Travel is right up there with my mortgage, phone bill, and gym membership.
Press play and listen to this episode where we chat about how we plan for trips and save for travel.
2. Create a travel savings account
The best place to save money for your next vacation is in a travel fund or travel savings account, a separate bank account devoted to your travel savings and expenses. Personally, I have over 11 bank accounts and one of them is a travel fund.
Helpful Tip: When you first start budgeting for travel, allocate a small amount of money towards your travel fund every paycheck. Consider starting with $25 (or any insignificant amount) and then increase over time.
3. Treat travel like a recurring bill
If you want to make travel a financial priority in your life, treat it like a recurring bill. Just like how you pay your bills the same time each month, do the same when saving for travel. This helps build consistency in your money routine.
To treat travel like a recurring bill, I recommend automating your savings. Set up direct deposit with your employer and choose the amount you want deposited into your travel fund every paycheck.
Again, automation takes care of all the heavy lifting for you so you never have to worry about moving money into your travel fund.
Read Next: How to Plan Your Next Trip
4. Practice reverse budgeting
So you’ve made travel a financial priority. You created a travel fund to keep track of your travel savings and expenses and every pay period you automatically save a specific amount of money towards your next vacation. Now what?
Well a few years ago when I thought that I couldn’t possibly save another penny for travel, I started tricking myself into saving more money by “reverse budgeting”. Essentially I started tracking what I did not spend. To drive this concept home, here are a few examples.
Let’s say, you’re walking by Starbucks (it’s pumpkin spice season) and you’re craving a latte. If you decide against it, immediately pull out your bank app and transfer that $5 into your travel fund.
Did you walk instead of taking the train? Add those savings into your travel fund.
If you saved 10% with a coupon code, that’s savings as well.
While reverse budgeting is a manual approach to saving money, it helps you identify new saving opportunites in your budget and reduces the likeliness that you’ll spend it elsewhere.
How I do it: When I reverse budget, I include “reverse budgeting” in the transaction description. Then at the end of the month, I search by the tag and add up all the transactions to see how much I saved. Last month, I saved an extra $232 by reverse budgeting, this is in addition to my other travel savings!
In summary, if you want to start making travel a financial priority in your life, budget your trip by including saving for travel in your monthly budget. Next, save consistently and treat it like a recurring bill. If you stick to this process, I guarantee that you’ll be traveling in no time. Just like anything else in life, when you truly want something, you will find a way to make it happen.
If you want even more tips on how to budget, check out my budgeting course which shows you step-by-step how to improve your finances and reach your financial goals sooner.