Dear Carrie: I'm a single mom in my late 30s. I had the good fortune to travel with my family when I was younger and want to provide the same opportunity for my 10-year-old daughter. On my salary, people tell me I'm dreaming, but I think travel is important. Any tips on how I can incorporate this into my budget? — A Reader
Dear Reader: Because you mention your budget, I expect you're already on the right track. Saving successfully for a goal is about prioritizing, but to do so, you first have to have a handle on your expenses. If you have a budget — and stick to it — there's no reason why you can't save for whatever goals are important to you. You may have to make trade-offs along the way, but this will help you focus on what you really want.
Before we get into specifics, let me say that if traveling with your daughter is a top goal, don't let others discourage you from doing it. Your goals are unique, and only you can determine how to achieve them. Here are some ideas that may help you do just that.
FIRST, COVER THE BASICS
This is axiomatic. Before you can spend money on extras like travel, you have to make sure you can comfortably cover all your essential expenses. This includes not only costs like housing, food, transportation and insurance, but also any debts you need to systematically pay down.
On top of these monthly expenses, my list of essentials also includes making regular contributions to a retirement account and making sure you have an emergency fund. I imagine that saving for your daughter's education would also be high on your list.
MAKE TRAVEL A LINE ITEM ON YOUR BUDGET
Once you have these financial bases covered, look at your discretionary income and expenses and prioritize to carve out a line item in your budget for travel. For instance, what do you regularly spend each month on going out to eat, entertainment or gym fees? Can you earmark a portion of that money for travel? Be honest about how much you can really afford to set aside each month toward this goal.
SET A SPECIFIC DESTINATION — AND DOLLAR AMOUNT
Granted, it's not always easy to give up one thing for another. So for extra motivation, make your travel goal concrete. Choose a destination, do some basic research and come up with a dollar amount you need to save. You could even give yourself a couple of travel targets. For instance, a weekend trip to Washington, D.C., might be easier to swing than two weeks in Europe. Prioritize these destinations, perhaps focusing on the ones that are more within reach.
SET UP A DEDICATED ACCOUNT WITH AUTOMATIC DEPOSIT
With your destination and basic costs in mind, set up a specific travel savings account. Have this money automatically transferred from your checking to your travel account. If you keep this money separate, you won't be as tempted to spend it on something else, and you'll also have the pleasure of watching your travel balance grow.
PUT GIFTS AND WINDFALLS TOWARD YOUR GOAL
You can boost your travel savings by putting any gifts, tax refunds or other unexpected money in your dedicated account. You might get an extra boost by suggesting to family members that a contribution to your travel fund would be the best gift to give you and your daughter for birthdays and other special occasions.
BE SMART — AND CREATIVE — ABOUT WAYS TO TRAVEL
Travel deals are everywhere. Consider getting a credit card that offers travel points toward flights, cars and hotels (but pay the balance off each month). Sign up for online travel sites that alert you to deals and let you compare prices.
Consider renting an apartment rather than staying at a hotel. It's usually cheaper per night — and you'll save on eating out. Try a website like airbnb.com or vrbo.com. If you prefer a hotel, avoid the big names and seek out small bed-and-breakfasts. They're usually run by locals who can make your trip even more interesting.
Also look into local transportation at your destination. Research bus and train passes. It's not only potentially less expensive, but also a great way to meet people and really get to know a place.
GET YOUR DAUGHTER INVOLVED
Your daughter's old enough to share in the excitement of planning a trip — and to help save for it. If she gets an allowance, have her put a percentage in her own travel account. Are there chores and odd jobs she could do to earn money for the trip? Tell her what she'll be responsible for, such as buying her own souvenirs or extra treats. This can be a good lesson in saving and prioritizing spending.
Lastly, don't get into debt to do this. Plan and save in advance, rather than running up credit card bills. You'll enjoy the trip more. And when you get home, rather than struggling to pay it off, you and your daughter can savor the memories while saving for your next adventure together.
Carrie Schwab-Pomerantz, CERTIFIED FINANCIAL PLANNER(tm), is president of Charles Schwab Foundation and author of the forthcoming book, "The Charles Schwab Guide to Finances After Fifty," available in bookstores April 2014. You can email Carrie at [email protected] This column is no substitute for an individualized recommendation, tax, legal or personalized investment advice. To find out more about Carrie Schwab-Pomerantz and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.