Tip of the week: Go without now to get what you want later
Published: October 9, 2012 at 3:58 PM
Allow me to suggest that anyone reading this post has the money for both a passport and a trip abroad. The trouble is you're probably spending that money on something else. :^(
So let's share some ideas on how you can stop spending money on stuff you don't really need - so you'll have that money available to spend on the stuff you really want. Please add your tips in the comments.
Let's start with a long view. For many people, the car payment's the biggest check you write each month after your mortgage or rent payment. But it's the easiest one to mine over the long haul for vacation money. Here's what you do: Drive your current car into the ground. Don't trade it in for a new car (and a new loan) after you've paid it off. Keep driving it for as long you can, until the a repair bill comes in that's greater than the remaining value of the car. That's when you'll know it's time to buy.
Here's the trick, though. Keep making your payments in the meantime, even after your current car is all yours. You won't make the payments to the bank, of course. You'll make them to yourself, by putting the money into a savings account.
Once the car's dead, if you've driven it for several extra years, you'll likely have enough money in the bank to pay cash for a new (or slightly used) and fuel-efficient car. (Save at the pump, too.) You might even have some money left over. If you do - that's your trip money! Keep stashing cash every month, and you'll be able to pay cash for your next car, too. And the car after that, and after that. You'll never have to pay interest on a car loan again. And, the leftover money - the cash each month that would have gone toward loan interest - will be yours to pay for theme park trips.
Okay, I live in Southern California, where I get more than 60 high-def TV channels over the air, free. When I want to watch movies or cable TV shows, I turn to Netflix or Hulu. (Amazon Prime's another option.) I watch ESPN online. What I don't do is pay for cable or satellite TV. Even with the Netflix cost, that still saves me hundreds of dollars a year that I can spend on other entertainment I like more than "Here Comes Honey Boo Boo." If travel is more important to you than the Travel Channel, try going without cable or satellite for a few months. Worst comes to worst, someone will give you a sweet "introductory" deal to get you back if you can't hold out, saving you some bucks on the monthly TV bill.
Food and drinks
Going out to lunch on a workday? Pack a lunch instead. Cook and freeze meals on the weekend so you won't have to go out when you're busy during the week. It's cheaper. Gotta go out? Get a glass of (free) water instead of buying a drink. Buy a reusable water bottle and refill it, instead of buying bottled drinks. Cutting soda out of your life will save you money, calories, and weight. What's not to like about that? Brew a cup of coffee at home and skip the trip to the coffee store, too. Saving five bucks a workday on soda, coffee or lunch adds up to $1,250 a year. You can get a round-trip air ticket between Chicago to Tokyo and a two-day Tokyo Disney passport for less than that. DisneySea, here you come!
Play the rewards game
This tip's for advanced savers. If you can pay off your credit card every month, go ahead and get yourself a rewards card that helps you get points or credits for your theme park trips. Airline or hotel-branded cards, or affinity cards from Disney or Universal, can help you get points with each purchase, and often throw in another bunch of points for signing up. These cards can be good deals only if you avoid high interest charges by paying in full each month. Many cards will hit you with a high annual fee after the first year, so make sure that the benefits you'll be getting are worth that cost. But 30,000 free airline miles can buy you a free trip round-trip ticket at certain times of the year, right there.