The start of a financial year is a good time to set fresh personal goals, and for one keen traveller, taking a planned approach was the key to saving for a dream vacation.
In 2017 Chris Field joined the 9-5 grind for the first time since leaving university. Armed only with a tonne of enthusiasm, he had a goal to tick a holiday in Thailand off his personal bucket list.
We explain the steps he took – and how you too can start achieving your wish list this year.
How to cut spending to grow savings
A key starting point to growing savings is to look for areas where cutbacks can be made to free up extra cash for saving.
For 20-something Chris, the first port of call was to trim his biggest expense – rent, though it involved some short term sacrifice.
“I moved into a share house with my girlfriend Aysha, who planned to come with me to Thailand,” explains Chris. “It took a fair bit of searching to find a place we could afford, and it was further out than we wanted. But it meant we could save money each week and we knew it wasn’t forever.”
How to set a realistic saving target
Instead of aiming to save what’s left after paying daily living costs, give savings a top priority – and be sure to set a realistic target to achieve your goal.
With his rent stitched up, Chris put an automatic savings plan in place. “I shopped around to find an account paying a good rate, then organised a direct debit out of my bank account and into a savings account each week.”
However, it turned out that Chris had underestimated the savings he would need, and he was well short of the mark. He spoke with mates about their overseas holidays, only to hear horror stories about arriving home with maxed out credit cards because their cash had dried up.
“Instead of relying on a credit card, Aysha and I decided to ramp up our savings,” recalls Chris.
To be sure he was setting a realistic savings target, Chris pored over the internet, pricing everything from airfares and accommodation to day trips and transport. It gave the couple a clear figure to work towards, and by swapping a few nights out for evenings at home they were able to give their savings a much-needed boost.
How to stay motivated when saving
Having a friend or family member take on the role of money mentor can help you stay on track with your goals. There are also plenty of online tools like savings calculators, free budgeting apps and expense trackers that can help with financial management.
For Chris, having Aysha as a travel buddy was a big driver. He notes, “One of the great things about having a shared savings goal is that you encourage each other to keep going. It also means you’ve got someone to steer you away from splurging when you’re tempted to spend on things you don’t really need.”
How to boost income to help savings
Exploring options to add to your income through freelance work or putting your hand up for some overtime can be a way of reaching your savings goal sooner.
As a keen photographer, Chris was given the opportunity to do a few paid photo shoots for a local sports team, and this opened the door to more weekend gigs. “I wouldn’t say it made me wealthy,” says Chris. “But the extra cash certainly took me a step closer to my savings target.”
Now…reap the rewards
After nine months of dedicated saving Chris and Aysha were ready to head overseas. In October they set off for Thailand, free from worries about not having enough in the kitty to do everything they’d planned for. Best of all, they arrived home debt-free.
The experience has been a valuable learning journey.
“Saving for an overseas trip taught me the importance of having a goal to work towards and putting a plan in place to achieve it. When Aysha and I are ready to start saving for a home, I’ll take the same approach,” says Chris. “If you work things out so that you’re organised, it’s not that hard to build savings. And if the goal really means something to you, the sacrifices don’t seem so important. It’s all about sticking with your priorities.”
If buying a home is on your bucket list in the coming year, make a date to speak with your Aussie Broker to understand how much deposit you need plus expert tips on how to achieve savings goals sooner.
You may also be interested in How to stick to resolutions to grow savings, 5 tips for keeping your budget on track this summer and How to train yourself to be a better saver.