Erin Confortini, a financial coach, says that she uses the 50-20-30 method to divide her income into her needs, savings and wants, including travel.
Travel is a powerful way to enrich our lives, broaden our horizons, and create lasting memories. However, the allure of exploration often comes with a price tag that can make even the most passionate traveler rethink their plans. But financial coach Erin Confortini, known as @itserinconfortini on TikTok, is shedding light on the math behind saving for vacations. By following her expert advice as per her viral video, you can unlock the secrets to experiencing more adventures in your 20s without breaking the bank.
Confortini kicks off her wisdom-sharing with a crucial point: setting a budget for your travel expenses. She recognizes that for young adults, balancing the desire for wanderlust with fiscal responsibility can be a challenge. Confortini advises, "First, you do need to establish a budget for how much is reasonable for you to spend on travel in any given year." She introduces a method that simplifies the process, aligning it with the 50-30-20 budgeting framework. Under this approach, 30% of your net income is designated for discretionary spending, which includes travel. To calculate the annual travel budget, you multiply your annual net income after taxes by 0.3.
Crucially, the next step is to consider how much of a priority travel holds in your life. This decision becomes pivotal in determining what percentage of your discretionary spending category should be allocated to travel. Confortini elaborates, "And that will help you figure out what percentage of your one category should go towards travel." Imagine you decide that you want to allocate 5% of your overall net income for saving towards vacation experiences. To calculate the monthly amount you need to set aside, multiply your monthly net income by 0.05. This becomes the sum you should diligently deposit into your dedicated vacation fund every month.
Confortini, a seasoned traveler herself, advocates for the use of a separate sinking fund, specifically for travel purposes. She explains her method, saying, "I keep a separate sinking fund in my high savings account specifically for travel." This approach offers a structured way to manage your travel budget. When opportunities to embark on new adventures arise, you can easily gauge whether you have the financial resources available to seize them. As Confortini wisely notes, if the money is present in your vacation fund, you can confidently commit to the trip.
However, if it falls short, you'll know it's time to exercise patience and save for that dream vacation down the road. Talking about her own financials regarding travelling, she says, "I keep a separate sinking fund in my high savings account specifically for travel. And when I'm asked if I want to go on a trip, if the money is in that fund I go and if it's not, I know that I shouldn't be taking another trip right now and should save up for one down the road."
Financial coach Confortini concludes her enlightening TikTok video by inviting viewers to seek more insights on budget-friendly travel tips. Her wisdom is a testament to the power of thoughtful financial planning, allowing one to savor the wonders of travel without the burden of financial stress. Confortini's guidance reminds us that with a well-thought-out budget and disciplined saving strategies, one can make their travel dreams a reality, all while navigating the exciting terrain of your twenties.