To me, having a travel fund is just as important as an emergency fund because going on trips is a huge part of my life. If I didn’t save for vacations now, chances are, I’d put it off until later in life and then realize I’m too old — or worse, too broke — to travel. I don’t want life to pass me by without experiencing awesome adventures.
However, putting money aside can be difficult. Saving doesn’t just magically happen one day. After that realization, I was far more intentional about prioritizing my goals, saving each month and scaling back on how much I was spending.
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I know I’m not alone in this struggle. According to a 2017 GOBankingRates survey, more than half of Americans have less than $1,000 in savings. This is a big problem. If people don’t even have $1,000 set aside for emergencies, they probably face an uphill battle to save for a house or a car or to pay off debt.
Save for Emergencies Before Travel (Then, Save for Both)
I should mention as a precursor that even though traveling is a priority, I made sure I had at least four months’ worth of living expenses put away in my emergency fund before going off on my travels. After building up that cushion, I felt better about saving for both simultaneously.
Also, my emergency savings goal is to have at least a year’s worth of living expenses put away. For my travel fund goal, I want to have enough cushion that I don’t have to work and travel at the same time. I’m still working toward both of these goals.
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Why I Created My Travel Fund
The reason I want enough money saved in my travel fund so that I don’t have to work while traveling is that I spent a large part of 2017 doing just that — working and traveling. I can now confidently say that juggling work and play is far less glamorous than it seems. Coordinating meetings in different time zones while figuring out sightseeing plans quickly became a pain. Sometimes, WiFi was not easy to come by, and in general, it was hard to relax since I had looming deadlines and projects to handle. I started to think about how much easier it would be to simply be on vacation — and for that, I needed a travel fund.
Also, managing credit cards points and strategizing for the cheapest flights and hotels became added work. The stress of constantly calculating how much I needed for each trip became an annoyance that I knew I wanted to overcome. I realized that if I had a fund set aside just for travel, it would put my mind at ease and make travel-related decisions much easier.
Utilizing My Bank’s Subaccount Feature
Each month, I contribute a set amount into my savings at Ally Bank. The great thing about Ally is that it allows you to create goal-based subaccounts for free. So, I distribute the money evenly into my three subaccounts: my emergency fund, travel fund and a down payment for a house
Look at your own bank’s options for savings, since Ally isn’t the only one to offer things like this. Capital One, for example, also offers goal-based accounts. You can name them anything from “Christmas gifts” to “vacation fund.”
I also automate my savings so that a set amount gets pulled from my checking to savings each month. Whenever I have extra money from a tax refund, I throw it into my savings.
What Is a Priority for You?
Besides the actual act of saving money, the most important part of saving is understanding your priorities. What do you want to accomplish? If you are part of the more than half of Americans who have less than $1,000 in savings, focus your efforts first on your emergency fund, building it up as quickly and aggressively as you can. Then you can save for other goals, based on what your interests are. I know travel isn’t a priority for everyone, so figure out what’s important to you — it could be a house, a car or something else entirely — and be more intentional about saving for that goal.
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