The Smart Way to Save for Travel, Vacations, and Kids Activities

family on beach

Need to travel for an upcoming business trip? Planning on taking the family on vacation? Kids showing interest in a variety of after-school and summer activities? How are you going to pay for all of it on top of your regular monthly commitments? Don’t fret, it’s all possible with a little smart planning and leveraging of the money you’re already spending, and I’m going to tell you how. But first, I would like to define money for you and perhaps even challenge how you currently think about it.

Money, according to Merrian-Webster, is “something generally accepted as a medium of exchange, a measure of value, or a means of payment.” I think we all can agree on this definition, albeit a clinical one. In other words, I would say that most people think of money as something we use to get what we want. We work for it. We save and invest it. We use it to buy food, gas, and pay our rent or mortgage payments.

None of this is wrong or incorrect, but I would add that money is a tool, arguably one of the most important and powerful ones we will ever use. Money is also an idea. Think about this. How often do we really handle physical money these days? Rarely. Almost everything we pay for is done with a credit card, Apple Pay, Android Pay, Venmo, or even Bitcoin. Thus, money is really an idea. Something we as a society understand has value and that we exchange for the things we need and want, and we do this without actually exchanging anything physical.

How do we use this tool to save for travel, family vacations, and activities for our kids? First, start with a calendar and notepad. Write down the different trips, vacations, and kids activities your family will want/ need to save for.

-When are they happening over the next 6 to 12 months?

-Do any of them overlap?

-Do any of them interfere with other obligations, like work, that are non-negotiable?

-How much will each cost? Are they recurring or one-time expenses?

Once you've mapped this out, add up the costs for each of the months and total them into one annual or semiannual amount. This is the start of your budget. If you don’t have a budget already, this is where you will want to make one for your normal lifestyle spending.

In the work I do with my clients, especially the entrepreneurs and founders I specialize in helping, cash flow is one of the most important pieces we focus on. We tend to think about the balances of our bank, retirement, and investment accounts. Although the balance is important, the cash flow coming into and out of your balances is what actually pays for the things you need. This is why a budget is so important. You can’t plan (save) for things if you don’t know how and if you can’t actually afford them.

If you’re just starting a budget, I suggest you find a budgeting program, like Mint, Quicken, or eMoney, to start tracking your cash flow. It can even be as easy as setting up a basic excel spreadsheet. Whatever you decide to do, just make sure you do it.

Once you have the budget and cash flow up and running, you can see how much money you actually have to work with (surplus, hopefully) on a monthly basis. Plug in the costs you already wrote down for the travel, vacations, and kids activities to see what you can afford to do without going into debt in the process.

How do you leverage money you are already spending? Here are a variety of ways to do this, but I will focus on the one I use regularly: co-branded loyalty programs—airline, hotel, car, and even Disney!—with credit cards. I have written extensively about this in my blog, Smart & Simple Finance, which you can access from my website.

I routinely use existing and new credit card bonus offers to get more out of the money I am already spending on my business, travel, family, and every day bills. The trick is, and this is very important, not to spend more money then you already are. This is why a budget is so important. Know what you can spend each month without going into debt, then leverage it.

What do I mean by leverage? An example, I currently employ two virtual assistants. I can pay for this service via check or credit card. There is no additional cost to me to use my credit card, so I use my Delta-branded American Express card to pay the monthly bill. This is money I’m already spending and that I have built into my budget. By using this card, I’m now getting a mile for each dollar I spend. This can add up fast when you start thinking about all the things you could charge.

In addition, I keep an eye out for sign-up bonus offers from credit cards—say 50,000 miles, points, etc.—to take out their card and spend X dollars in the first three months. These points/miles can be used for a variety of things, like free airline tickets, free hotel nights, free car rentals, or even discounts at resorts, like Disney World. If this seems of interest, I encourage you to research it further to learn the nuances of these programs and if they make sense for your situation.

In summary, I would boil it down to three things. Know your cash flow, plan your next 12 months of activities and travel, and leverage money you are already spending. Doing these things will make you feel better about your finances, leverage money you are already spending, and ultimately do more of the things you and your family love to do. Here’s to doing more without spending more.

Photograph by Eric Tadsen

Derek Notman is a Certified Financial Planner® and Founder of Intrepid Wealth Partners LLC. intrepidwealthpartners.com