This is a guest post by Emily Starbuck Gerson of Maiden Voyage. Emily is a 20something professional writer and editor based in Austin, Texas. She’s a travel junkie who runs the blog Maiden Voyage in her spare time. You can find her on Twitter at @TheMaidenVoyage.
I hate to admit it, but I can be an impulsive shopper. Target is a danger zone for me. While I don’t generally do major damage, I’ve found that small impulse purchases can quickly add up and wreck travel savings goals.
My primary checking and savings used to be at the same bank, which meant transfers were instant. If I needed new shoes but didn’t have quite enough in my checking, I could just transfer over $50 from my savings to my checking and go shopping right away.
I needed something to keep me accountable on my travel savings goals, so I opened up an interest-earning savings account at ING Direct, a primarily online-only bank. Because the bank has low overhead, its interest rates are usually better than other banks. I was able to link it up to my Bank of America checking account.
It takes two bank business days for money to transfer between the two accounts. While that may be a pain for some people, I think it’s a major benefit! It means it’s impossible to spontaneously spend the saved money. You have to wait two business days before it arrives in your checking account, removing the temptation to impulsively take little bits here and there.
You can move money manually, but you can also do automatic savings plans, which is a way to fast-track your savings. Most banks allow you to do this online, but I think it’s most beneficial to do it between two different banks so that you have the lag time.
For my automatic savings plan, I chose to have $15 automatically go from my regular checking account to that ING savings account each week. It’s a small enough amount that I don’t notice it leaving my checking account, but it’s enough that whenever I remember to check my savings, I’m always pleasantly surprised to see how it’s added up. It allows you to contribute to your travel goals without even thinking about it.
Whenever I have a trip soon on the horizon, I up my weekly contribution amount to more like $30. That doesn’t mean you can’t still manually add to the account when you want to. Whenever I end up with a little more money in my savings than I need, I manually transfer some money over.
If you want your travel savings to grow but have impulse spending tendencies, open up a savings account at different bank from the bank where you have your checking account. An online-only bank is preferable since their interest rates are higher. Then set up an automatic savings plan so that money for your travel fund will add up when you’re not even thinking about it!
Flickr Photo: j.reed