Hey friend and happy Monday! I hope you had a great weekend (and a great Easter if you celebrate it)! This week’s blog post is a check in to see how the savings challenge is going for you. I’m personally following the $2000 savings plan to fund a joint birthday trip in December/January with my friends (Capricorns, WYA?!). So far, I am ahead of schedule which is great and I’ll be more than ready once we start booking later this year. If you are behind schedule or saving in general is just a struggle for you, here are some tips and tricks that have helped me!
Keep your savings goal front and center
Step number one for me is creating a savings goal and keeping it top of mind so that I always know what I’m working towards. If you have a specific destination in mind, go ahead and do some research to get an idea of your expected costs (flight, hotel, transportation, food, and activities). If you don’t know the destination, make an educated guess based on what you do know - flights to the Caribbean will likely be inexpensive whereas flights to Africa may cost more, vacations during peak periods like summer and holidays will be pricier, etc. Once you have a savings goal set, write it down, add it to a vision board, change your phone background, etc. so that it becomes a top priority as you move throughout the year. This will help you follow through with actively saving for your trip.
Stimmy, come through!!!
Many of us experienced that beautiful moment where we opened our banking app to see an extra $1400 in the account. What did you do with it though??? If you needed it to pay bills, pay down debt, or create a rainy day fund for emergencies then 100% that should be priority number one. However, if saving for vacation is also high on the list of priorities then a portion of that direct deposit should have also gone straight into the vacation fund. At minimum, $5 is better than nothing but if this check contributed to a majority of your discretionary income this year, then saving most if not all of the $1400 is your best bet to ensure you meet your savings goal.
Tax refunds and performance bonuses are key!
Similar to the stimulus check, if you received a lump sum tax refund and/or performance bonus, setting aside a portion of this amount would also put you ahead of schedule when saving for vacation. Once again, if you rely on these payments for a specific purpose, use as necessary. Just make sure your vacation fund is also on the list!
Make extra cash
Of course, if you don’t have much discretionary income currently, find ways to get some! Drive for a rideshare services, get a part time job, work overtime, hold a yard sale, do freelance work, rent out spare bedrooms, etc. There are plenty of side hustles available so find one that works for you!
Set a budget
Oftentimes, what makes saving so hard is not a lack of money, but rather a lack of control. Many of us simply do not take a look at our income vs. expense ratios to ensure we are not going crazy with the spending. We live freely day by day unless there is a visible problem (i.e. a negative amount in your bank account). Budgeting allows you to create a spending plan that ensures you will always have enough money for the things you need and any other priorities. There are plenty of budgeting apps that will help you better plan and track your spending. And having a set budget will help you think before you swipe your card!
Have a designated “Vacation Fund”
Whether you prefer to save for vacation by pulling out cash or save by creating a separate bank account, make sure you have a designated “Vacation Fund.” Having a separate account allows you to visually see and track your vacation budget to know exactly what you are working with so that you can plan accordingly. It also helps you avoid accidentally dipping into your travel savings during regular spending sprees.
Automatic savings transfers
Another way I successfully save is by setting automatic bank transfers. I currently transfer money to my savings account with each paycheck so that it is gone before I have a chance to spend it. This ensures that I don’t accidentally forget to save and that I don’t unintentionally dip into money that shouldn’t be touched. This way, regardless of what I do day to day, my savings is taken care of.
Cut back on unnecessary expenses
Take a look at your current financial situation and determine where you can make changes. If you pay $50+ for cable to only watch 3 shows available online, you may be able to get rid of that expense altogether. If you are subscribed to Spotify, Apple Music, and YouTube Music, try to downsize to only one. If you currently have a gym membership but are comfortable working out in your apartment complex’s gym, get rid of it. If you love having your nails or hair done, try doing it yourself instead (it will take time but you got this!). Start making your own coffee at home instead of spending $3+ a day ($1000+ a year) at Starbucks. Cook dinner at home instead of eating out every other day. Cancel your Amazon Prime subscription. Yeah, I said! Cancel it! This will not only free up $150 in memberships fees per year, but you aren’t buying anything important on there anyway! 90% of the time it’s unnecessary items, impulse buys, and random gadgets you saw on TikTok that you probably shouldn’t be buying if your goal is to save money anyway! In fact, I dare you to check and see how much money you spent on Amazon last year. Your Amazon purchases could probably fund your vacation on its own tbh. I’m messing with you...kinda lol. But whatever you decide to cut back on, keep the end goal in mind. You can do it!
Actively track daily spending
I haven't done it recently because I have been spending much less since the pandemic (I don’t shop online much and I’m always at home) but I used to have an excel sheet where I would input everything I spent each day/week to actively keep track of my random expenses. This was important because I found myself swiping my card more than usual because it’s only $1, only $5, only $10, only $20. But every “only” adds up and before you know it, you've accidentally spent hundreds on impulse purchases. If you are in the same position, actively tracking your expenses will help you better understand your spending habits and potentially show you where you can cut back. Remember, $5 a day is not just $5 a day, it’s $1800 a year and $20 a week is $1000 a year. So minimizing impulse buys could really help you in the long run!
Is this worth a night in a hotel?
Have you ever thought about time in songs (“I showered for 3 songs” instead of “I showered for 15 minutes”) or in episodes of a show (“4 episodes long” instead of “2 hours long”)? Well I also like to think about large sums of money that way and it really helps! The new PS5 cost a 3 day Caribbean cruise, a Louis Vuitton handbag cost a week long vacation in Bali, a night out (entry fee, multiple drinks, multiple shots, and potentially food) can quickly rack up and cost the same as one night in a hotel abroad, and an online clothing shopping spree can easily be any of the 3! So whenever you are about to spend large sums of money, asking yourself “Is this worth a vacation?” could be the trick you need!
How is your saving challenge going? Do you use any of these methods? Did you find any of these to be helpful? Are the saving plans from the previous post not challenges at all and you need something larger than $2000? Let me know in the comments!
Solid advice!