Budgeting is an essential skill that isn’t always taught in school.
Meaning it’s up to individuals to take responsibility for their own financial education. Starting a budget from scratch can seem overwhelming. It’s normal to dislike feeling restricted by currency signs. Having to really focus on how much we spend and on what isn’t necessarily an easy task – or a desirable one!
But if you are at all interested in travel, budgeting is a pretty essential step in taking control of your finances. – especially if you’re trying to save for your next trip. Here are some steps to help you start:
1. Determine your income
Calculate your total monthly income, including your salary, any side hustles, or other sources of income. This total will give you an overall picture of what your current financial standing is.
2. List your expenses
Write down all of your monthly expenses, including bills, rent/mortgage, groceries, transportation, entertainment, and other regular expenses.
3. Categorize your expenses
Categorize your expenses into fixed expenses and variable expenses.
Fixed expenses are those that stay the same each month. Like your rent or car payments. Variable expenses are those that change each month. Like what you spend on groceries or entertainment.
3. Set financial goals, like your next destination
It’s important to identify your short-term and long-term financial goals.
This can be anything from paying off debt to saving for a down payment on a house… or in this case, a vacation. When you choose your destination, decide how long you want to spend there.
4. Create a budget plan
Based on your income and expenses, create a budget plan that allows you to save money and achieve your travel goals. Make sure to prioritize your fixed expenses and leave some room for variable expenses.
As for your budget plan, you can create one that accommodates more than one financial goal. It doesn’t have to be restricted to only travel or only towards a house.
5. Track your spending
Keeping track of your spending will help you to make sure that you’re staying within your budget. I like to check in with my budget once every two weeks. Ideally on Monday.
You can use a spreadsheet or a budgeting app to track your expenses. If you’re old school, like me, use your trusty pen and paper or keep track of it all in your notes on your cellphone.
6. Review and adjust your budget
Your budget’s as reliable as an ex-partner’s promises – sounds good in theory, but rarely sticks to the plan, so check in with it regularly to make sure it’s working for you.
You may need to adjust it as every now and then to accommodate any changes in your income or expenses.
Getting better at budgeting for travel…
Starting a budget is the first step towards achieving financial stability and reaching your financial and/or travel goals. By taking control of your finances, you can reduce stress over money and start enjoying your life more.
(If you’re looking for insight on making a little extra cash before your next trip, check out my other post Effective Ways to Make Extra Money… For Travel.)
