Well, summer is almost over and the children are getting ready for school. During the summer, you might have taken a vacation to Disneyland or somewhere other than home to relax and de-stress. If so, you are among the many families that took a much deserved break. However, did your summer vacation follow you home? What I mean by this, is did you charge your trip on credit cards? Did you buy stuff during your vacation and charge it to your credit cards?
If so, your vacation did follow you home. Are you going to be able to pay the card or cards off when the bill comes? If not, you now have debt from your vacation. You will probably be worrying about how you are going to pay the bills. Now, you have added stress and the vacation does not seem like such a great idea. It’s too late to plan for that vacation, but you can plan for future vacations. You need to get on top of your finances. Become a fighter and deliver the one two punch to your debt!
You have to start with a budget, do the debt snowball, and save. Start saving in your HRRA and add some for your next vacation. Given the condition of your debt, you might not be able to go on a vacation next year. However, once you start saving for it, you’ll have enough.
But wait, you might ask, “How much should I save for my vacation from every paycheck?” Take the amount that followed you home and divide it by the total number of paychecks you receive each year. If you get paid monthly, then you divide by 12. If you get paid, biweekly you divide by 26. If you get paid semi-monthly you divide by 24. Let’s say your vacation cost you $3,000. For monthly paychecks, you would save $250(3000/26=250) from each check. For biweekly, you would save $115.38 (3000/26=115.38) per check. Finally, for semi-monthly,you would save $125 (3000/24=125).
By doing this each year, your vacations will never follow you home. When you come home, you will not have to worry about any debt from them. Keep in mind that if your next vacation is going to cost more than the one for this year, you will need to save more from each paycheck. Otherwise, you won’t have enough money saved.