Before Booking Your Summer Getaway …
These Money Moves Can Keep You From Sweating the Details on Vacation
In the heat of summer, it’s hard not to daydream about lounging on sandy beaches and sipping on your favorite frozen concoction. But is taking a summer vacation realistic for you? Before you start planning your escape, consider these vital financial moves first before spending on your next getaway.
Pad that emergency fund.
Did you know four out of every ten Americans can’t afford a $400 emergency, according to a report from the Federal Reserve Board? Before you hit the road on that summer trip, make sure you’re saving cash to cover any unexpected injuries, illnesses or life-threatening home repairs. Once you have at least $1,000 saved, congratulations! You’re doing better than most. From there, commit to saving at least three to six months of living expenses to ensure you’re protected against any future emergencies.
Don’t be tardy paying down student debt.
Student loans are becoming more and more of a necessary evil for many Americans seeking higher education. The average student loan debt for a graduate in 2017 was $39,400, according to Student Loan Hero. Ensure you have a plan to pay back your debt that works within your budget before you start looking at vacation destinations.
Stay focused on future you.
We all know we should be saving as much as we can for retirement. But if you’re looking for a hard number, 10% to 15% of your income is a good rule of thumb. Once you’ve established the habit of saving for retirement, it’s important to save the right way – by investing in a mix of stocks and bonds in line with your age and risk tolerance. This is where blooom helps.
Save for vacay before spending on vacay.
Taking a summer vacation is more of a luxury than a cultural norm, according to a recent survey from Bankrate. Forty-nine percent of Americans don’t plan to take a vacation this summer, and one in four survey respondents are not taking a summer vacation because they can’t afford it. Only 36% of respondents who get paid vacation days plan to use all of them this year. So how can you get that well-deserved R&R?
If you think you might have to stay home until next summer, consider changing your destination and/or accommodations to something more practical first. Check out the New York Times’ recent article about the 11 Ways to Save Money When Booking Travel for valuable tips and tricks to maximize your vacation budget.