It's Nice To Have A Plan

It's hard for me to disagree with Wanda at Well-Heeled when she says, "Now I know it’s not smart to rack up credit card debt, but I can see Tolu’s side of the story. He’s been to 22 countries! I guess you can say the experience was priceless." Word, Wanda. I've also got the wanderlust. I've been to England, France, Italy (and the Vatican, technically its very own mini-country), Germany (where I lived for a few months), the Netherlands, South Korea, Mongolia, and, uh, Canada, and my hunger for travel is piqued rather than sated. My next major travel goal is to ride the Trans-Mongolian Railway, which connects Moscow and Beijing via Ulaan Baatar, an absolutely extraordinary city to which I'm frantic to return. After that, I'd like to travel through North Africa, visiting Egypt, Libya, Algeria, Tunisia, and Morocco.

Unlike the person to whom Wanda is relating, however, I have no $100,000 salary to which I can look forward. For that reason (among others), I wouldn't ever travel on credit. I would, however, defy personal-finance gospel by prioritizing saving for travel over saving an emergency fund. My parents' financial situation permits them to cover my emergency expenses, and (at least for the next few years) they would choose to step in if I had an emergency that money could help me out of. Without that security, I don't know if I could say that for me, travel is more important than a $10,000 emergency fund.

As I begin to get a sense of my financial goals, my plans for my own savings become clearer. Travel plays a big part in those savings plans. It's not, however, absolutely my first priority. I absolutely must open a Roth IRA. I want to open it with Vanguard, where there are minimal fees. Vanguard's minimum balance for a new Roth is $3,000. Therefore, when my ING savings account reaches $3,000, I'll open my Roth at Vanguard. At that point, I'll begin (little teeny) automatic contributions to the Roth in addition to working on rebuilding the ING account, which will be devoted to saving for what are essentially "experience purchases": travel and graduate school.

This plan takes advantages of the resources I've got and prioritizes the things that are most important to me. It also doesn't leave me totally dependent on my parents: in the worst-case scenario, I could break my $1,000 CD at Bank of America at this point without losing principal. I think that allows me enough peace of mind to begin saving aggressively for the things that really matter to me.