1. You need to have an emergency fund in place
It’s the very first step to building a strong financial picture. So if it’s two incomes, you should have three months. If it’s a single-income house, you should have six months sitting in the bank. Your emergency fund is the one thing that can get you out of all kinds of danger and sticky situations, especially before taking a vacation. It’s always a relief to know that your emergency fund exists – should anything ever happen, like some really bad car accidents or getting laid off from work, it’ll be there to get you through those first few weeks so you don’t have to rely on friends/family as much or incur high-interest debt in order to stay afloat financially. It makes sense that everyone has an emergency fund – heck, we’re living in uncertain times! And like computer backups and insurance policies for your home, the more cautious (and responsible) among us are going to plan ahead for uncertainty.
2. Wipe out your credit card debt before taking a vacation
If you want to start on the right foot, wipe out your credit card debt. The average American has a large amount of money in their checking or savings account that is there just for emergencies like this–and they are paying interest rates as high as 20% per year! So now is the time to use these funds and have no worries about what will happen if something goes wrong.
3. Building travel into your budget
You know that feeling when you’re booking your flights to go to a vacation? The excitement builds as the countdown to departure ticks away. Get excited about travel by budgeting for it! That way, not only will you have money set aside if anything ever happens and is needed on a tight deadline or emergency situation, but also having something so eagerly anticipated actually motivates one to spend less while traveling because they are anticipating all of their future adventures instead of just paying for each individual trip separately.
4. Save 20% of your investments before taking a vacation
Savings rates are a vital point to consider when investing. Saving 20% of your investments can help you feel more confident about the future and give your portfolio an edge for retirement, healthcare or other expenses that await in old age.
A common rule-of-thumb is that people should save at least 10-20% of their earnings each year on top of Social Security payments; but this number could be as high as 50%. I like saving 30%-50%, which gives me peace knowing my savings will last longer than it takes to live if anything were ever happen down the line while also avoiding getting too deep into debt with loans or credit cards if they have been used excessively during life’s financial peaks and valleys.
5. Start a savings account for your travel vacations.
The best way to travel is on your own dime. The trick? Start a savings account for this purpose before you start working, and stash away money every month from now until then!
6. Make sure you can afford travel journey insurance
Why is travel insurance so important?
It’s always a good idea to prepare for every possible situation when you’re planning your trip. One way of doing this, as suggested by many experts and travelers alike, is purchasing traveler’s health insurance before heading off on an adventure across the globe. Especially with COVID-19 still present, there are many risks taken into consideration it becomes clear how crucial having coverage can be whether you’re taking short trips domestically or long-term trips internationally.