Weekend Word to the Wise (Saving)

Today, my partner told me about an article she read in the November issue of Real Simple magazine.

In the very short article, the writer shared a tip he used to save money so he and his family could go on vacation. He stated that he used cash to pay for everything. When he received his change, if he got a $5 bill returned, he folded the bill differently than the rest of his cash and when he got home, he immediately put the $5 bill into an envelope and when he accumulated $50, he would deposit the money into a special, separate, savings account so he would never be tempted to spend the cash or to transfer the money from savings into his checking account. In a year, he had saved $2000, enough to take his wife and two children on vacation.

Back in September 2009, I wrote a post about Budgeting for Vacation and talked about different methods for saving for your dream vacation. This short article is a perfect example of what I was talking about!

It is possible to put aside enough money to go wherever you want to go. It doesn't matter if it's Europe or Florida. If you want to get there, you CAN do it!

Budget for Your Vacation--Pt. 1

How do you budget for your vacation? Do you have a savings account specifically for traveling? Do you decide where you'd like to travel to, try to decide what it might cost and save specifically for that destination?

It doesn't really matter which you method you prefer, the important thing is that you decide where you'd like to go and either make sure you have enough money or start saving and be ready when the right fare pops up.

I am sharing with you several links to some of the best budget travel expense online tools (with the exception of one that is an excel spreadsheet) that are geared toward the budget traveler. Most of them calculate basic costs that you have probably already considered but some of them have some line items that you might not have thought of as vacation expenses but that will impact the amount of money you will actually have on hand to spend while you're travelling.

The first budget calculator I'm linking to is from the Independent Traveler website. This site is a great source for independent travelers and it's loaded with information and several useful online tools the any traveler can utilize (see GlobeDiva travels packing hints for a link to independent traveler's interactive packing list). Independent Traveler's travel budget calculator is a basic travel budgeting tool that allows you to calculate the overall potential cost of your trip that you can save, print, or email to your travel buddies. The nice thing about this particular budget calculator is that there are several empty boxes that allow you to put in personalized costs that make your budget unique.

The next budget calculator I like is from Solotravel.org. This website is geared to solo travelers of all ages. It offers tour providers and trips that are solo friendly and their travel budget calculator allows you to estimate a "per day" amount you might need to budget for a specific country. The link to that calculator is here. Begin by entering the country to which you wish to travel. Continue by choosing your preferences for eating, accommodations, alcohol intake, internet usage, extra costs and the number days you will be staying. You are given a total with a rough idea of amount of money you will need per day in the currency related to the country to which you will be travelling. A link for a currency converter is also available.

An easy to use travel expense calculator comes from easy-budget-planner.com. This is NOT a travel website but a website that offers everyone lots of FREE budget planners. The travel expense calculator allows you to calculate whether you have enough money in your savings account for your trip. If you see that your proposed expenses put you in the negative overall, you know it's time to change your travel plans by making some cuts here and there or time to add more money to your savings account.

If you're dream vacation is a cruise, here's an excellent little travel budget planner that focuses on cruises and expenses aligned with them. Get Sunny is the website and although some of the links on the site come back with errors (as of this writing) the link for the budget planner works just fine. This great little calculator has categories for every possible expense related to cruises you can think of and then some! Once you've completed the calculator, you get back a detailed budget with break-downs for cruising, air travel, transportation, accommodations, sightseeing, and other expenses. Once you've got your total, you can even email it to yourself.

Here is an excel spreadsheet from the website Round The World Trip that helps you budget for an "around the world" trip! After you click on the link you will be taken to the web page that has the actual link for the spreadsheet. Once the spreadsheet opens, you will find instructions on how to use it to help you budget for your trip. This spreadsheet focuses more on countries in the Eastern European area, North and South America as well as Africa, but there is virtually no focus on Western Europe. The instructions ask that you not edit the cells so for me, this spreadsheet serves to give me some ideas on how to work make my own spreadsheet that could help me budget for a really long, round the world type trip; however, I'm not really inclined towards using spreadsheets and I have found the other budget calculators mentioned throughout this post serve my purposes just as well, if not better. I'm including this spreadsheet link for those of you that prefer to budget in this manner.

The final website and budget calculator I'm including is not quite like the calculators I presented above. This particular calculator allows you to figure out how much money you waste on little daily habits (like that Starbucks latte you stop for every morning) and how much money you would save if you just cut back, or eliminated, one or two or several, of these habits. Once the amount of savings is calculated, you can click on a link that shows you where you could afford to travel to with the extra money you saved over the year. This calculator is on an awesome website called TravelMuse and it's a bit similar to Tripit in that it allows you to plan your trip, search the web and save information you're interested in, and share with your friends, all in one place. The savings calculator I'm referring to is called Yaycations and it's really eye-opening to see how much you could save for a trip just by cutting back on a few luxuries. You can also utilize TravelMuse to book travel if you're so inclined. I may never book travel from here but I will definitely use it as a resource to compare costs with other search vehicles. The site is very intuitive and easy to use. This is a fun site to play around on and dream of far away places.

Next, look for my own personal techniques that helped me save enough money to make it to Italy in the upcoming post!

Budgeting for Your Dream Vacation

For those of you who don't know me personally, let me put this right out front for everyone to know. I am not rich. As a matter of fact, I made my very first trip to Europe while I was in the middle of bankruptcy (the kind you repay, not the kind where all your bills are written off).

I share this information with everyone because the most common statements I hear from people when they begin talking about their dream vacation is "I don't make enough money" or "I can't afford that kind of trip right now" or "Maybe when I'm retired".

So I'm asking you...if you can't travel right now, when will you be able to travel? If you can't afford to travel right now, when will you be able to afford to travel? If you aren't making enough money right now, in this economy, what are the chances you will be making a lot more in the years to come?

I ask you all this because I know from experience that for most of us living in the mid to low end of the middle class, these opportunities will probably never materialize. We will probably never get that fantastic paying job making a six-figure salary and as we grow older, our time will probably never be as free as we envision it being in the future. So I ask you, WHY WAIT?

Why wait until you have that job paying 100K a year? Why wait until you retire to take the trip of a lifetime?

I've learned a few things from personal experience that finally sunk in after it seemed everything was falling down around me and I'd like to share these things with you in the spirit of travel and adventure.

• There is no time like the present. You hear this saying all the time but do you ever really stop to think about it? My mom and dad had so many dreams for their retirement. They were going to travel throughout the U.S. My mom loves New Mexico and they really wanted to spend a good deal of time there. My dad retired a few years before my mom did so he had some time to bum around and live the carefree life for a bit while mom finished up her last few years of work. In the middle of waiting, my dad suffered a couple of strokes that incapacitated him and eventually led to his death. All their dreams gone in less than 2 years. I learned several things from my parents and from this experience: First, my parents instilled love of travel into me. We always took summer vacations to where ever my aunt happened to be stationed so I got to see a lot of the U.S. and Mexico this way and we always had a free place to stay. Second, life isn't going to stop just because we think we're finally ready to do what we've always wanted to do. If we don't do it now, we may never get to do it.

• If you think you'll never have the money to travel, you will never have the money to travel! As I said above at the opening of this post, I'm not rich. I don't have a rich mom or dad or grandmother or aunt or uncle to hand me money whenever I need it. What I make is what I live off of and if I need more, I take on more jobs. A few years ago, I bought a house. Owning a home when you're single isn't always easy but I felt I was up for the challenge. A few years after buying my home, all hell seemed to break loose at one time. The sewer line broke, my roof was leaking torrentially into my home, and all of a sudden, my tightly wrapped budget was coming apart faster than I could pick up the loose ends. I didn't have a contingency savings plan for emergencies. The only way I could do the major repairs on my home was to get behind on my house payments. The bank was about to foreclose so I filed for bankruptcy and went for the option that allowed me to pay my creditors back. The only problem was that the courts, in all their wisdom, garnished OVER HALF of my paycheck. With what was left, I had to make a house payment of over $1,000.00 plus my utilities, food, and gas. There was no way I could make that work so I began seeking part-time employment. The Lord blessed me with a second job and I began working evenings and weekends in addition to the occasional consulting I'd been doing for the last 15 years and my full-time job. It was not easy. I worked anywhere from 80-100 hours a week and was so tired I wasn't sure how I would continue to do it but I pushed myself to work day in and day out. It was in the middle of all of this that I would re-visit my old dream of traveling to Italy. I wasn't sure when I would make it there, my bankruptcy was a 5 year ball & chain and I could barely see myself making it out of my financial predicament anytime soon. But the more I worked, the more I wondered what I was doing all of this work for with nothing to show for it but a house, a car, and some material objects. It was about this time, my thinking began to change. If I was already making some changes in my spending habits, why not make more changes. The time was ripe for it and if I didn't do it now, then when???

These two times in my life were the impetus I needed to push me forward and propel me where I wanted to go...and where I wanted to was ITALIA!

Now that you know a little bit more about me and how I gave myself the opportunity to travel, in my next post, I will share with you some hints and tips that worked for me and helped me move in the direction of my dream vacation.