Apr 12, 2019
Here’s How to Save for that Summer Vacation
Automated savings can help you meet your vacation budget goals.
Spring is finally here, and as the weather gets nicer, you might start thinking about a summer vacation. It’s a popular time to travel, with more than 5 million U.S. citizens traveling each month within North America, according to federal data.
But vacations can be expensive, and nearly three quarters of U.S. families plan to spend more than $1,000 on summer travel alone, according to one recent survey.
While that sounds like a lot of money, it’s possible to construct a savings plan to help you meet your summer vacation goals.
Save $1000 in ten weeks?
Here’s an example: If you could manage to set aside $100 a week, and put it in a vacation fund starting in May, you’d have $1,000 by mid-July—the height of summer. Even if you put aside half that amount weekly, you’d have $1,000 saved up by late summer. And late summer can be a great time to go away since it’s usually less crowded, things like lodging and car rentals are cheaper, and the weather is still fine.
How can I save money?
It’s important to budget in your financial life, and that includes budgeting to save. You never want to spend more than you earn, as that can quickly run you into debt.
Many financial experts recommend something called the 50-30-20 budget. Here’s what that means: Ideally, 50% of your monthly take-home pay should be devoted to the expenses you must pay every month, for things like rent, mortgages and student loans. Another 30% could be allocated to “wants,” or non-essential expenses such as the occasional dinner out or night at the movies. The final 20% of your budget should be allocated to saving and investing.
As part of your savings plan, experts also recommend creating a rainy-day fund. It’s a savings account that should contain between three and six months worth of expenses for unexpected events, such as medical care, car repairs, or even a lay-off. After you have your rainy-day money set aside, you can use the rest of your savings for other goals—such as a summer vacation.
Let Recurring Transactions help you
The more you can automate your savings, the more you can potentially save, according to economists. Stash has a set of savings tools for that: Recurring Transactions. They can help you automate savings.
While Recurring Transactions has two features that can help you save money, one called Auto-Invest lets you automatically transfer money into your Stash accounts. You select the amount you want to set aside, when, and how often you want to set it aside, and whether you’d like Stash to automatically invest it in your ETFs and stocks, or simply place the money in your cash account. And you can use your cash account to start saving for a summer vacation.
Stash wants to be your financial partner, and we want to help you meet your financial goals, including saving, investing, and building wealth.