You’ve heard me talk about YNAB plenty of times. YNAB is also known as You Need A Budget, an awesome budgeting program. And today I’m going to talk about vacation planning with YNAB. We’re all going to be able to vacation again someday, and here’s a great way to start setting aside some money as you plan.
What is YNAB?
You Need a Budget is a software program that comes with a specific method on how to budget. While I use the and love the YNAB software, the important thing is the method:
- Give Every Dollar a Job
- Save for a Rainy Day
- Roll With the Punches
- Live on Last Month’s Income
They’re pretty simple rules, and you work your way through them. When you first start, you won’t have enough in savings to live off of last month’s income. But with time and work, you will get there, and it is so freeing to have planned ahead for bills and not have to worry about how they’re going to get paid. I have my credit cards set on autopay (I pay the full statement amount every month so I don’t pay interest), and I never have to worry that one of the payments is going to overdraft my bank account because the money is right there.
Vacation Planning with YNAB
I don’t know about you, but I had to cancel all of my vacations this year (we had a big two week trip to the UK and Ireland planned and I’m so bummed we didn’t get to go), so I’m already thinking ahead about trips we want to take when travel is allowed and safe again.
So as I’m dreaming up these amazing trips, I thought I would talk about how I do vacation planning with YNAB. One of the budget categories I set up for myself is called “Vacation.” Some people break down their vacation budget into things like Vacation Travel, Vacation Lodging, Vacation Food, etc. I like to keep it simple. Every month, once I’ve budgeted money into my required funds (mortgage, bills, food, etc), I put a little bit of money into my Vacation fund. Some months it’s more than others. Some months, it’s nothing at all, depending on what expenses I had that month. But it’s an easy way to make it add up.
Some people vacation plan by putting money into a separate bank account they can’t touch. That’s always an option, I suppose, but it’s not one that I like. First off, I don’t always set aside the same amount of money for vacation expenses each month, so setting up an automatic withdrawal every month wouldn’t work. And I don’t always spend the vacation money at the same time.
Let’s say I’m planning a trip in August. If I were putting money into a separate account, on February 1, I would have put money into that account. Then, on February 15, I decide to buy my plane tickets because I see a good deal (and I use Southwest, so the money is refundable in the form of Southwest credits – that’s a post for another time). Now I have to transfer money back from that account into my bill paying account or directly to my credit card.
By using a YNAB budget category, there is no money to be moved around. I just log the expense into the Vacation category and then pay the credit card bill when it comes. It’s a whole lot easier.
Couldn’t I inadvertently overspend and not have the money for the trip? Sure. But I work hard to make sure that doesn’t happen. Before I spend anything, I check the budget. And let’s be honest – if an emergency comes up and I have to spend the money, well, I can put my vacation off to another time and transfer the funds from the Vacation fund.. That’s what Rule #3 is all about.
Benefits to using YNAB to Vacation Plan
It’s nice to see the money add up every month, knowing that I will be able to have a bit of fun, even now, when I don’t know when our next vacation will happen. So right now, I’m just putting aside money as I can. And when we start to actually plan a trip, if I have an idea of the expenses, I can be sure I’m setting aside enough money. If I’ve saved up more than I need, it doesn’t mean that I will splurge on the trip – maybe I’ll just have leftover money for the next adventure.
What I love about vacation planning using YNAB is the flexibility. I can set aside what is right in that month. I’m not locked in to any set amount, the money is there and I can watch it grow, but if something happens and priorities shift, I can use my vacation fund to cover those issues. When our vacations got cancelled this year, I temporarily stopped funding the budget category in order to put some money towards some home projects we wanted to complete. Priorities shifted, and the budget went along with it. We were also open to pulling money out of the vacation budget if needed.
Using YNAB is an easy way to quickly see what money you have in your vacation budget or any other fund you might setup. You can keep it on your phone and immediately know whether or not you have the money in the budget to spend. It’s a great way to stay on top of regular expenses and to save for future spending.
- YNAB Goes to the Cloud – A Review
- How Should You Change Your Budget If You Get A Raise?
- Saving on Your Summer Vacation