Travel Budget and Savings
Saving for Trips
There is plenty of planning when it comes to traveling but budgeting is one of the hardest and most stressful activities associated with it.
Many years ago, I used to keep an empty jar on a shelf. My financial situation was not rosy but traveling, if only to visit relatives, seemed essential. So I forced myself to save for it. I committed to putting $20 in the jar, whenever I could: once a week or once a month. Starting way ahead of the date of the actual trip meant that I had actually committed to a date. It was not going to be ‘some time this year’ or ‘some time in this lifetime’. It was going to be on such and such date. I made plans with my relatives, I bought the plane or bus ticket so I wouldn’t back out of it and then I started saving.
The jar had a pretty long shelf life, if I may say so. I used it for several long-distance trips over the years because I didn’t know any better.
But now I do. Or I think I do. Until I find out about anything better out there, I’m recommending savings accounts. For my trip to Portugal I used SmartyPig online savings account and it worked out fine. Seeing my feeble savings grow, even by pennies every month, made me feel good. I consider SmartyPig one of the most user-friendly online banks out there and I’m going to continue using it. Now I have a ‘buy new electronics’ goal and an ‘emergency fund’ goal set up.
I’ve had a Discover credit card for many years but never thought to open a high-interest savings account because I already have 2-3 regular bank accounts. It just seemed too much. Now I’m reconsidering. The Discover savings account is one of the best deals out there in terms of interest. Again, this works best when you have a long-term savings goal. Interest rates fluctuate so keep in mind your expectations and your goal’s limitations. Just because you place money into a savings account with a high-interest rate, doesn’t mean your money will double. Read about it and see what amounts for what duration will provide you with enough return to make a difference. The truth is that anything makes a difference because it’s free money. You just have to let it or make it grow by not withdrawing and consistently depositing money until your goal is reached. Then the interest is extra.
You must keep in mind that you always have to save more than your minimum. Traveling budgets must always take into account the unknown, the unpredictable. What if something happens? What if your rental car breaks down? What if you must go to a hospital and your international medical insurance is not recognized, for some reason? That has never happened to me, but it’s a good example. People get bitten by strange insects, they have food that doesn’t agree with them, step on something sharp, get the flu, etc. Personally, whenever I needed medical care, I received it, either free of charge or for a measly sum of money. But maybe that one incident will make you lose your connection and you have to pay for an extra bus or train ticket.
You must always have something extra. I usually add on a third of my traveling budget, on top of the minimum. Ideally you must have at least half. It’s like an emergency fund for traveling. If you have one for your daily life, why not have one for when you travel?
I regretted getting rid of the jar because I associated it with worthy efforts of saving and memories of beautiful trips. It was a symbol of what I can achieve, in spite of various random financial predicaments. Evolving with the world, technology and my needs, and recognizing other options for improving my personal finances has been another reason of pride. Traveling takes a leap of faith and so does doing something new. You don’t have to do it recklessly. Get informed, try it cautiously, then become good at it. Start saving today and get ready for new adventures.