My goal for this year is to be richer. We all know that. I have stated that in my first post, and in the about page for this site. The problem is I am not sure I have fully figured out how to save more money than I did last year while enjoying my life to the fullest extent and not giving up things that I enjoy.
For example, I want to take a vacation soon. I envision it to be 3-4 days in either San Francisco, or Orlando. Looks like air fare and hotels will add up to approximately $400 for this trip. If you add in food, that’s more like $500-$550/person. The companion I have in mind is in graduate school, so I have to pay for them too. Since we will be sharing a hotel room, in total, it will probably cost us $800 or so.
What I am struggling with is where should this money come from? Should I just spend it from my savings? Or do I have to give something up to make up for this?
Until now, I have kept all the money that are left over after my expenses in one savings account. Since all the money was together, whenever I wanted to do something, I would just take it out from the savings account. This means, I had no idea how much money I was spending on discretionary items.
Starting this month, I am depositing $100 every month into a separate account for discretionary spending only. Theoretically, this will take care of vacations, eating out etc. I have to be honest though, I used to dine out multiple times every week – so $100 is very low, and I may have to adjust this amount upwards. But I want to stick with it for at least 2 months to see if I can do it.
Since the discretionary accout was born just this month, it has $0 in it. This means, my options are:
- wait 8 months (which seems too far away) to save up enough money for this trip
- just use money from my savings account this time, and use the discretionary account for future vacations
- “borrow” money from the savings account for this trip and then pay it back from the discretionary account in the future
- don’t take the trip – instead do something that costs $100 maximum
I haven’t made up my mind about what to do yet, but I will keep you updated. Let me know if you have any thoughts/advice.
