Post written by Angie Geer, Bean Counter | Proud Mama | Doting Wife | Cooking Enthusiast | PTA Volunteer (Sucker)
School’s out and the kids are already driving you nuts! You’re exhausted from work, so why not take that vacation? Wait…your vacation fund is empty?
It’s true…some of us just don’t budget properly to build that vacation fund up. Of course, some of us also incur unexpected tax burdens or simply have had too many costly household repairs that drained our disposable income.
In my family, we take an annual trip to Vegas every year, but it’s no walk in the park for us either. We’ve had a rough year with unexpected expenses, but we did so well with our budgeting that I’m happy to report we’re able to make it happen again this year.
So maybe you can’t build up to take that vacation every single year, but let’s look at some steps you can take to make it more of a reality:
Track Your Expenses
Your heart may fall out of your chest when you actually see how much you’re spending each month in certain areas. I’m a QuickBooks nerd, so we use that in my family, but there are so many options out there that are simple and inexpensive. Once you have an idea of what you’re spending in each category, you can construct a realistic budget.
Create a Budget
I know this sounds remedial and you’re thinking…yeah, yeah, yeah….but be honest with yourself: Do you have a budget? (That’s what I thought. Now zip your lips and listen.) Whether you’re using Excel or one of the great apps you find online, the rules are the same.
1. Start with listing the net income you bring in each month at the top. (Pretty, isn’t it? Hang on tight…it’s about to get ugly.)
2. Start deducting your fixed expenses. Examples include mortgage, loans, utilities, childcare, autos/insurance, etc.
3. Define what you want to go to savings and/or a vacation fund each month and deduct that amount.
4. See what’s left over and start divvying it up into your other categories such as groceries, meals and entertainment, clothing, etc.
This is also the time when we stop looking at what we’ve spent in these categories in past years and start being realistic about what we SHOULD be spending.
Once you’ve got your budget in place, FOLLOW IT. If you slip up, get back on track as quickly as possible.
Tips for Staying on Track
*Be disciplined. You’ll have to break some old habits, but it’ll be worth it. You must constantly monitor yourself. Don’t be a slacker!
*Be aware and be preventative. I personally had a rough tax year because I didn’t realize how a couple of changes would affect me. It’s important to consider all changes in your life and seek advice along the way.
*Be a nerd. My grocery budget stays on track with a little extra work. With few exceptions, I only go to the store once a week. I write out my weekly meal plan. I start my grocery list with the items needed on my meal plan. I then add on the usual staples we need, as well as items from my family’s wish list (how entertaining is this list…’puppy’ and ‘iPhone’ have appeared on my list before from my 10-year-old). I jot down on the side of each item the estimated cost. And add it all up.
How close are you to your weekly budget? Is it ugly? Start knocking off items that you don’t need, or things that can wait until next week. If you’re under…go ahead and add something you know you need for the future to make next week less painful.
Here are a few links that offer suggestions on personal finance tracking and budgeting apps. Find the one that’s right for you.
Sure, a vacation may not be possible every year, but you deserve one, so let’s at least try to make it happen!
Thank you for taking the time to read the Financial Optics blog! If you have any questions about this post or any other questions, give us a call at 913.649.1040. We’re happy to help.