Managing your finances can be difficult, but a few quality tips and tricks can go a long way. Each week we'll be featuring a new tip on anything from daily spending to retirement planning from a member of the Finance Collective. This week's tip comes from Take Your Success and is a great life hack on how to start saving up for your next vacation!
"What's a travel fund? Good question. It's just a separate savings account that is dedicated solely to travel.
It stores every single penny that you're eventually going to use for transportation and living expenses. And by keeping this travel money in a separate account, you protect it from being spent on regular day-to-day expenses. That means you're not mixing your checking account balance with your travel fund. You're not mixing your regular savings with your travel savings...
Like I wrote in my post titled Best Savings Account for 2017, if you want to get serious about saving your money, then you need to set up an automated system.
Nothing can compete with its efficiency. Set it up once, and then it's a 100% hands off system that guarantees you're making progress to save money. Plus, it requires no willpower—where manually saving money is decision-heavy and often ineffective.
And here's how this automated system specifically works for you and your travel fund. Once it's set up, it goes like this:
Your checking account receives income.
The next day, your checking account automatically transfers money to a separate (different bank) savings account—aka your travel fund.
Transfers repeat every month.
You end up with a big, fat travel fund to see the world." -Take Your Success
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