This post is the fifth entry in my money management series. To start at the beginning, see post one: money management, post two: housing, post three: food matters, and post four: a penny for the coffee, a penny for the tea here!
Over the last year, our third largest spending category (10% of expenses) was travel. I feel really fortunate that we can be spending a significant portion of our funds on something that is so much fun (as compared to the #4 category – automobiles). Plane tickets are so much more fun than new breaks!
This year we spent the majority of our travel dollars on our July trip to Sweden, but looking over the list brings back other fond memories of smaller trips we’ve taken. I love getting to see friends and family since we’re all so spread out. The internet is great, but spending time together, face to face is definitely the best.
It’s about time for us to start mapping out 2010. Bryan and I usually sit down in December or January and figure out what trips we want to take and then map them out over the next couple or few years. Then we make sure we have the vacation time we need and can save up for those travel expenses.
I don’t right now, but I used to have a bank account set aside for vacation savings. I had some funds automatically transfer into the account every month from our primary checking account, and then when we wanted to take a trip, we had dedicated money to do so. Now that I’ve written that down, it sounds like a good idea. I think I should set up an account for that again!
At our current bank (Charles Schwab), I have a primary checking account, a savings account ($1,000 emergency fund), and a long-term emergency fund (slowly working toward saving enough money to cover 6 months of expenses). I think I should also set up accounts to segregate vacation funds and maybe another one for car repairs, and maybe one for household expenses like a roof (eeek) or a new sofa.
In general, I hope we can control our other expenses enough that we can afford to allot a sweet percent to something we all love doing so much.
althea, just thinking about having all those different accounts is enough to give me a headache. couldn't one argue that the long-term emergency fund is for something like car repairs and a new roof, other emergencies, etc.? i think it's a good idea to have money set aside for fun stuff like travel or buying artwork (or pottery!) but i wouldn't overdo it.
That’s a tricky one. I like the simplicity of fewer accounts, but I can see the need to have different “pots” for different saving spending needs.
Another way might be to define how much you intend to save each month or payday and what percentage of that should go toward each goal. I’m picturing a savings pie chart.