by Maurie Backman | Jan. 7, 2021
Itching to get out and travel this summer? Make sure money isn't a barrier.
It's fair to say that 2020 wasn't exactly a great year to travel. Quarantine mandates, safety concerns, and economic uncertainty caused a lot of people to scrap their travel plans and stay close to home. But if you're now itching to get out and go places, you may have your sights on the summer of 2021. By that point, there's a good chance many people will have gotten vaccinated against COVID-19.
Of course, taking a big trip this summer will cost money. The sooner you start saving for it, the more likely you'll be to scrounge up enough cash to cover your costs. Here's how to pull that off between now and then.
Ideally, you're already following a budget to keep your spending in check month after month. And if that's the case, you probably know to account for expenses like food, rent, car payments, and entertainment. But if you're serious about traveling this summer, add that trip as a line item in your budget and set aside funds for it each month.
To do so, you may have to cut back on other expenses -- for example, order less takeout or cut the cord with your cable company and stream entertainment for less money. But if you factor your summer trip in as a recurring expense, you're more likely to actually save for it.
You may find you can only save so much, even if you're willing to cut corners in your budget. If that's the case, a side hustle could be just the ticket.
The beauty of taking on a second gig is your earnings won't be earmarked for existing bills. You should be able to take all that extra money and allocate it to travel (minus taxes on your income). The economy isn't in great shape right now, so a side hustle may be trickier to come by. But what you can do is capitalize on services that may be higher in demand, like online tutoring, which a lot of parents need in an age of remote learning.
We all have things we need to spend money on each month -- food for the table, gas for our cars, and household essentials, like cleaning supplies. If you're smart about charging those expenses on your credit cards, you could rack up enough cash back to help cover a summer trip.
When charging expenses, pay attention to things like rotating reward categories. One of your credit cards, for example, might give extra cash back on gas during the second quarter of the year, so that's the card you'll want to pull out at the pump. Another card might offer a quarterly bonus on department store purchases, so when you're buying gifts, that's the one you'll want to use.
You can also aim to take advantage of credit card sign-up bonuses. But be careful -- you don't want to spend extra money just to score the bonus, as you won't come out ahead. Instead, time your credit card applications carefully and apply for sign-up bonuses you know you can achieve.
Say you're looking at a card that'll give you $500 cash back for spending $3,000 within three months of opening your account. If you normally spend $800 a month on your credit cards, you won't gain anything by charging an extra $200 a month on needless things. But if you expect to pay $1,500 for furniture once your toddler transitions out of a crib this spring, that would be a good time to get a new card with that sort of sign-up bonus.
With a little careful planning, you can save up enough money to pull off the trip of your dreams this summer. And after a year of hunkering down at home, you deserve just that.
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