72% of millennials value experience over material possessions. Business thought leaders coined the term “experience economy” to capture this value system. If you’re someone who spends more on experiences than possessions, you’re probably more interested in budgeting for your next trip abroad than for a house or car. Here’s how you can budget for your next big trip.
Brush Up Your Organizational Skills
Steph Jagger, who traveled around the globe and skied more than 4 million vertical feet, has some insight into what it takes to plan a dream-come-true trip. These kinds of trips take significant organizational effort. If you don’t organize first, you’ll end up pouring money down the drain at some point or another along your journey.
How are your organizational skills? It’s time to take them to the next level. Steph Jagger, who managed to save 31,000 dollars and take a year off from work to pursue her dream, planned her trip down to the nitty-gritty details -- even the weight of her toothbrush. Take a page out of Jagger’s book and channel all of your excitement for your trip into organizing.
As you organize, aim at creating a stable itinerary for your trip, as well as nailing down the most expensive items. Then estimate the amount you will need for the things you can’t plan for accurately. Tack on money for unexpected costs and emergency situations. Next, divide the total by the number of months you have until your big trip. This is how much you need to save each month.
If the number seems unattainable, reconsider your costs. Research ways to cut travel costs, and work with your budget until you reach a number that is realistic.
Work Hard Beforehand
Consider taking on a second job while you save for your trip. Not only will you be able to put aside extra cash, but you will also be using up a chunk of your leisure time, which can create even more savings. One travel expert at the “Travel Latina” puts it this way, “(A side job is) also a great way to keep yourself from having the time to go shopping or to go out drinking with friends”.
A Word On Debt
When you work hard beforehand and accumulate a portion of the money you will need for your trip, you will be less likely to slide down the slippery slope of credit card debt. If you do need to put some of your trip expenses on credit cards, commit to a plan that will allow you to pay off the cards responsibly.
Look for cards that have a deferred interest plan, which will give you a window of time for paying off the debt before interest rates kick in. Create an automated deduction from your weekly or monthly income, which you can comfortably put towards car payments once you return from your trip.
Now that you know how to budget for your next big trip, let the dreaming begin! Researchers have found that the mere act of planning out a trip increases happiness. Enjoy planning your trip, down to the minute detail. Figure out how much you need to set aside each month. If you can’t save up enough beforehand, use credit cards wisely.