Vacation Dreams: How Planning Gives You Permission to Spend

Have you figured out yet whether you’re the big spender or the master saver in your family? We all seem to fall into one category or the other. And if there’s one subject that always reveals who’s in which group, it’s the question of vacations.

Whichever side of the vacation divide you’re more drawn to, saving up or cashing in, there’s good news: You have to do a combination of saving and spending to accomplish anything with your money! So if you’re a spender, your chance to do your thing is coming. And if you’re a saver, rejoice. Your natural drive to store up money is going to pay off with the right-sized vacation at the right time.

The main thing to remember in budgeting for a vacation is that when you plan well and save, you give yourself permission to spend. Depending on your outlook and your income, here are a few approaches you can take to balancing budget needs with vacation dreams.

For Savers: Keep Up the Good Work and Reward Yourself Tomorrow

The most natural and emotionally rewarding strategy for you savers is to focus on knocking out debt and building an emergency fund while putting vacation plans on the back burner. Because of your wiring, you get deep peace and satisfaction from knowing that you are making progress financially. For you, spending money on yourself for fun isn’t even on your radar at this point.

If you’re on Baby Step 1, vacations don’t make sense right now anyway. But most people, even natural spenders, can get $1,000 saved up in a couple of months or quicker. If you’re working on your debt snowball (Baby Step 2), just concentrate on paying everything off. No reason to interrupt a good thing if you don’t have to. And if you’re building up a full three to six months’ worth of living expenses in an emergency fund, this might even be your favorite Baby Step so far! Again, you can keep a good thing going without giving vacation a single thought.

The payoff when you finish Baby Step 3 is a no-brainer: Save up for a vacation! Because you’ve turned the corner on debt and emergencies, you have a lot more room to dream. By now you’ve proven yourself to be great at budgeting and saving, so follow through by rewarding yourself with that well-earned trip.

For Spenders: Vacation Budgeting When You Just Can’t Wait to Get Away

Savers may love the plan about delaying vacations while focused on the Baby Steps, but it’s probably a painful idea for you spenders. And that’s okay! For many people, the idea of never taking even a day trip until you’re totally out of debt and have a full emergency fund just isn’t realistic. So let’s look at some practical ways to work vacations into your budget right now, no matter which Baby Step you’re on.

For example, imagine a couple who are on Baby Step 3. We’ll call them Steve and Christy. When they had finished paying off their debt, the last thing they wanted to do was drop the momentum of that victory—they wanted to keep the ball rolling all the way up to a fat emergency fund. At the same time, they felt they owed themselves a small vacation that wouldn’t disrupt their budget.

Here’s how they pulled it off. They decided to take a trip to celebrate Christy's birthday, which gave them three months to fund the vacation. Together they agreed that to keep up the pace on their emergency fund savings, they could only afford to set aside about $200 a month in that period. As Vacation Week approached, they had $600 saved to do their thing. Then something awesome happened. Christy's mom gave her $150 for her birthday. That gave them $750 to spend on a three-day getaway, and they never missed a beat with their emergency fund goals.

This principle works at any point in your journey. The key here is to work your vacation goals into your budget, treating them just the way you would any other spending category. And remember that vacation dollars don’t grow on trees! To make your mini-trip possible, it might mean temporary cuts in other areas, like spending less on entertainment or restaurants.

Whether You’re a Spender or a Saver, Put Your Plan on Paper

Writing everything down on paper is pretty crucial if you ever want to feel that sand between your toes, knowing the whole trip is completely paid for. Savers will do better with this one, but spenders have no excuse for failing to write out exactly what they’re going to do to get from Point A to Point B.

There’s huge power in doing the math, recording how much money you’re working with and how much you need to afford a nice trip. Once you’ve got it all written out, keep it posted somewhere prominent and check back frequently to see how you’re progressing with your goals. As you pay down debt or accumulate savings, the possibility of your dream trip will become more real. Before you know it, you’ll be in better financial shape and holding your own ticket to paradise.

Enjoy Your Vacation to the Fullest

The truth is that no one can truly enjoy a trip knowing that it’s been paid for with borrowed money or funds that should have gone toward higher priorities. Keep in mind that whatever permission you give yourself to have fun has to be backed up with a solid financial foundation.

So even if you’re a spender, take a page from the natural savers’ strategy book and remember there’s equal beauty in spending and saving. Like the natural savers, you can survive the long journey through the early Baby Steps by taking mini-trips. Because whether it’s a quick road trip or a whirlwind European tour, the best vacation in the world is the one you take with no strings attached.