How to Pay for the Big Trip You Want to Take Next Year

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Whether you’re currently in college, just graduated, or are simply finally getting your financial life in order, welcome to our latest series, The Back-To-School Budget. For the next four weeks, we’ll be getting back to financial basics, from figuring out a savings plan that actually works, to finding more flexibility in your day-to-day spending. And thanks to Fizz, you can start building credit as you master all the basics of managing your money.

Close your eyes and think forward to next year: how do you want to be spending your spring break or early summer? On a beach with your friends? Backpacking through Europe? Blissfully enjoying a peaceful staycation with dozens of romance novels? However that dream looks, there’s one thing that’s true: no vacation is ever worth going into credit card debt over. 

That doesn’t mean you don’t deserve to take one — but it does mean you should plan ahead so you’re not hit with social media-fueled FOMO. But if you’ve never actively saved towards a goal before, where do you get started?

Today’s task: set up a sinking fund for the trip you want to take (or any other goal). 

For the uninitiated, a “sinking fund” is a revolving savings account you continually deposit money into and withdraw from as needed. For something like vacation savings, a sinking fund is a great way to make sure you can cover costs as they come up — your flights, the deposit on a hotel room, pre-booked activities, etc. 

Use these steps to calculate how much to start putting away in your sinking fund:

• Add up the total goal amount: What is the estimated overall total cost for your trip? Your costs may include:

  • Transportation: airplane or train tickets, rental car, gas, etc.

  • Accommodations: hotel stay, Airbnb, hostels, camping fees, etc. 

  • Food: going out vs. buying groceries

  • Activities: group tours, museums, show tickets, resort day passes, etc. 

  • Pet sitting while you’re away

• Nail down your timeline: When do you need to have that amount saved by? Keep in mind that some costs may hit your account earlier in the planning process than others.

• Calculate your contribution per pay period: How many paychecks between now and your trip? Your total goal amount ➗ number of paychecks = how much to save per paycheck.

• Set up direct deposit: to ensure you don’t spend the money you’re meant to be saving in your sinking fund, set up a direct deposit from every paycheck so that amount goes automatically into your savings account. 

If you’re new to budgeting and saving, we know setting up any kind of goal can feel overwhelming. Enter Fizz. Fizz is the #1 credit & money app for young adults. Whether you want to build credit safely, manage your money or have no idea where to start, Fizz is there to help you every step of the way.

One of the best features of Fizz is their debit card that helps you build credit. With a Fizz card, you can earn 3% cash back in a category of your choice and other exclusive offers (up to $300 in annual cash back and rewards value) — that means more money in your bank account as you work towards your savings goal. There are no interest rates, late fees, or minimum deposits to worry about, and no credit checks or cosigners required. Your card connects to your bank account and gives you a line of credit based on how much money you have, making sure that you spend responsibly. The card is also paid off automatically every day from your connected bank account, keeping you from building up big balances throughout the course of the month. Users also get real-time spending insights, access to budgeting tools, real time credit monitoring, and more. 

Take the guesswork out of your spending and join over 100,000 members to kickstart your financial journey. Click here and use code TFD to get your 30-day free trial of Fizz!