How to save for a holiday
Pay your own way on school trips, family vacations and at Schoolies.
Whether it’s spending money for a week away with your family or saving for your first parent-free holiday at Schoolies, having enough money to enjoy yourself is an important aspect of travel.
But saving for a holiday or other big-ticket items can be difficult. More than 70% of teenagers know having savings is a good idea but only around 50% actually do it*.
RACQ Financial Advocacy Analyst Nathanael Watts revealed how to create a savings plan to ensure you’re cashed up for your next trip.
1. Set a goal
No matter what you’re saving for, it all starts with setting a goal.
Work out how much money you need and how long you have to save it.
For example, if you’re planning to save $1000 for food and spending money at Schoolies 2020 you have around eight months to meet your goal.
2. Work out your income
It’s all about what’s coming in and going out.
If you work the same shifts every week at your casual job or have a set allowance, you’ll have a pretty good idea of how much money is coming in. But if your shifts change every week it can be hard to estimate how much you’ll earn.
If you work out that you’ll earn at least $100 each week it would take you 10 weeks to reach your $1000 savings goal if you can save the entire amount.
3. Work out your expenses
In addition to what you earn, how much you can save each week will depend on how much you’re spending.
Make a list of what you spend each week. This could include your phone bill, lunches and snacks, clothes, petrol and gym fees. The amount of money you have left over after expenses could be put into savings.
If you’re earning $100 each week and spending $80 of that, you’d be able to save $20 each week. Doing this would take around a year to reach your $1000 savings goal – much longer than your eight-month timeframe.
4. Do the maths
Now that you know how much money you already have left over at the end of the week, you can adjust your spending to save more money. This could mean making a few sacrifices.
Saving $20 a week won’t get you to your $1000 goal in eight months but if you were able to save $35 each week you’d reach your saving goal in time for Schoolies. You could save more money each week by taking your lunch to school instead of buying tuckshop or takeaway, buying less clothes or earning extra money by doing jobs around the house.
Save your savings
It can be exciting to watch your bank balance grow but it can also be tempting to spend ‘just a little bit’ because you’re doing so well, which can derail your savings goal.
One thing I use to help curb my spending is to work out how much time it would take me to earn the money to pay for an item.
For example, if you want to buy a $100 concert ticket and you’re earning $100 a week at your casual job it would effectively take you the whole week to earn the concert ticket. Would you be willing to work for a whole week in return for a three-hour concert? Sometimes your answer will be yes and, if it is, you’ll need to adjust your saving plan to make sure you still have enough time to save for your holidays.
Another tip is to put your savings into a high-interest savings account that doesn’t have a debit card so you don’t accidentally spend what you’ve allocated to your holiday fund.
Happy savings and enjoy your holiday!
*Source: Financial Literacy: Australians understanding money
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