Barbara O'Neill Rutgers Cooperative Extension oneill@aesop.rutgers.edu
The dark days of winter are a great time to plan your summer vacation. First, you’ve probably been cooped up inside with cold weather. Summer vacation planning can help combat “cabin fever” by focusing your thoughts on fun in the sun. Second, you may have a federal and/or state income tax refund coming that can help pay all or part of the cost. Lastly, if you don’t have a big lump sum coming, you have 18 to 25 weeks before your summer vacation to gradually save up the money you need.
Start with some good old-fashioned planning. Decide what you want to do on your summer vacation. Where do you want to go and how much will it cost? Make a list. If you’re handy with a computer, create a Microsoft Excel spreadsheet and add up the cost of various expenses: hotels, meals, airplane or train tickets or gasoline (experts are warning gas could reach $4 a gallon by summer!), park admission fees, kennel fees for a pet, and more. Tally up all the expenses. This is your summer vacation savings goal.
If your tax refund can cover the entire cost of your summer vacation, great! You’re basically done. Consider setting the money aside in a short-term CD so that you’re not tempted to spend it on something else before this summer. Otherwise, calculate how much time is left between now and your summer vacation and “do the math” to calculate what you need to save each week or each paycheck to have the amount you need saved by the time you need it.
Here’s a simple example. Let’s say you need $1,500 for all of your vacation expenses and you have 20 weeks to save. You’ll need to save $75 per week ($1,500 divided by 20) to reach your goal. Next comes the hard part: finding the money. Unless you can generate extra income, you will need to reduce your current expenses to “find” the money to save. To make vacation saving easier, consider setting money aside automatically through payroll deductions to a credit union account or other savings plan.
Starting thinking about your summer vacation now while you have the time to save for it. This way, you’ll have the cash you need this summer and won’t have to use credit cards and incur expensive interest charges. To plan for your vacation or any other future goal, download Rutgers Cooperative Extension’s Financial Goal-Setting Worksheet at http://njaes.rutgers.edu/money/pdfs/goalsettingworksheet.pdf.category; News
