Thursday’s post, Saving for Plane Tickets, Part One, broke down airfares to different destinations into a daily, weekly and monthly savings budget. Of course, the most straightforward way to save $3/day is to divert it immediately from your paycheck into a separate account, preferably one earning higher interest and which is difficult for you to access (that is, spend). Those who are so disciplined must be applauded. The rest of you should probably keep reading 🙂
This post delivers six ideas for building up travel savings without too much thought or deprivation, by putting your essential and non-essential spending in perspective and “snowflaking” the positive effects of any money-saving measures you may already follow. Find my advice after the jump.
+ Vice Method: Pick a vice, any vice (smoking, lottery tickets, beer drinking, bath products, books, etc.). Track and match your monthly spending each month. Too poor to double your vice budget? Eliminate or reduce a vice or two and pocket the difference.
+ Virtue Method: Have another goal you’re working on, like reading a book a week or training for a marathon? Reward yourself by putting away a set amount per step, such as $10/book finished or $1/mile, towards travel. Those with less money should look for ways to reduce their upfront costs (for example, buying books used, selling the books when finished, or borrowing them free from the library or friends), setting aside the savings for travel.
+ Clean Sweep: Do a monthly check under the couch cushions, on top of the dresser or dryer, in coat and pant pockets — anywhere that money lurks. Multiply the amount found by 10 and save the total. If you’re pinching every penny so tightly they never roll away, use the clean sweep to identify things you’re not using but which have resale value: textbooks, DVDs or CDs, vintage or formal clothing, sports equipment, appliances. Sell the clutter and put away the profit towards your trip.
+ Wallet Dump: Each Wednesday (yes, Wednesday), empty everything $5 and under from your wallet and save. If you’re broke, check instead every transaction for old bills and coins still in circulation: take out and save every bill with a round face, all pennies and dimes, old nickels and quarters with the eagle on the back. Living on the Euro? Set aside all foreign-backed coins.
+ Bill-Pay Round Up: Round the total of each monthly bill you pay to the nearest $5 and give yourself the difference.
+ Port Toll: Heading out to work? It’s gonna cost you 25 cents to get through that front door. Same goes for coming home. Pay again if you go to the grocery store, to the gym, to pick up the kids from school. Keep a jar by the door for easy collection.
How can you compound these savings? Start with the following:
> Make it a competition. Challenge yourself to save 10% more than your goal per month. Race your spouse or travel partner to see who can save or earn the most towards your total.
> Get that money out of easy reach and into the bank as soon as possible. Cash lying around is likely to be spent on something else — like the Port Toll jar being “robbed” for laundry. It’s far less easy or tempting to dip your hand into an account than into an envelope in the desk drawer . . .
> Earn the most interest on your money that you can. Brick and mortar banks are offering pretty miserable rates these days, so you might want to consider opening a savings account with an online bank, thereby doubling or tripling your interest yields with minimal effort.