Eight steps to saving for your trip of a lifetime
By Suzie Barnaby
As you ease your way out of the chilly ol' winter season, it's awfully tempting to start conjuring up plans of how you will spend your next big holiday.
Dousing your sun-kissed skin in cool sea waters followed by a zesty Margarita or two at the swim-up bar. Bonding with the family you never seem to get to spend enough time with as you adventure around a completely new city, full of intrigue and delightful surprises.
Or maybe your next holiday will be spent with your nose in a book in a place that offers absolutely no distractions.
Whatever your holiday daydreams hold for you, don't let them be trodden on by the financial reality of having to pay for them.
To help your holiday dreams become a reality we have prepared an eight-step Travel Plan that will help you get on that plane sooner rather than later:
Step One – Plan your holiday
When planning for your next big holiday you’ll need to map out exactly what kind of holiday you wish to take. Do you want to head overseas or travel in Australia? How long do you want to travel for? Do you plan to travel solo or will you be taking your partner or the whole family?
Step two – Prepare a budget
Once you have figured out your travel plans, it’s time to establish just how much you will need to fund that type of holiday. You’ll need to factor in flights and travel, accommodation, food and drink and spending money.
Step three – Create a savings plan
This will start with you first of all defining your savings goals. We recommend that you break the total figure you will need into achievable, smaller goals and then work out a savings plan based on each goal. This can be done by creating savings goals down into weeks or months. Just be sure to assign realistic savings goals that you stand a chance of achieving.
Step four – Set up a dedicated travel fund
By having a dedicated savings account for your travels you will easily be able to keep track of your progress. We recommend that you choose an account that gains interest such as a Term Deposit or Reward Saver Account. You may even consider a share investment if you have some time before your trip. It's important that you then resist the temptation to access this money. For convenience and to maintain your savings discipline, set up an automatic transfer amount from each pay you receive.
You could also consider using a Mortgage Offset Account as your dedicated fund. If you directed $200 per week to your Offset Account you could save over $20,000 in just two years, as well as saving interest on your home loan.
Step five – Investigate strategies to reduce your tax
Use strategies to minimise tax so you receive more 'take home' pay and/or a healthy tax refund to put towards your travel fund. If this is something you are interested in finding out more about, we'll be sharing a few of our recommended tax minimisation strategies at our upcoming Dream, Plan, Travel Event on October 18.
Step six – Reduce your expenses
To squeeze in some extra savings into your cashflow you will need to firstly assess how to reduce your expenses or create extra income.
There are a few ways that you can work to reduce your existing expenses. One way is to take a mindful approach to your spending. Every time you go to spend money think about what you are spending on is really a priority or if you could better use those funds to top up your holiday fund and spend on your travels.
Spend less on lunch, eat out less often, cut back on a coffee each day, cancel your gym membership and get outdoors instead. Take on free activities such as visting the library or volunteering for a local charity, the latter will also make you feel rich in other ways.
Step seven – Commit to your dream
You can use before and after pics to inspire you for this one. If you are a visual person, perhaps create a chart that demonstrates how much your travel account is growing each month or download a money app that helps you track your goals. Pin a photo of where you want to go and what you want to do on the front of the fridge where you'll be motivated every day.
Step eight – Find a support person
Sometimes when we know a goal might be hard to acheive, it can help to nominate someone that we can be accountable to. Choose someone who inspires you and share your travel goals with them, then keep them up-to-date with your progress.
Dream, Plan, Travel Event – Reserve your seat
If you would like to find out more about planning financially for the trip of a lifetime, please come along to our Dream, Plan, Travel event which will be held at 5.30pm on Thursday 18 October, 2018.
You can register for this event by clicking here.