We have all done or seen it before. There is a bargain on airfare, a cruise or hotel. We can't pass it up and know we have enough cash to purchase the ticket, we'll worry about the rest later. Later comes around, we are leaving for the trip and only have a few hundred dollars saved to spend. Not to worry, we will charge it. This is a very common theme with many of us and not only does it drive up your credit card balance, it drives up our stress level. We know that charging items and worrying about it later causes stress, so why do we do it?
Setting up some simple systems can help you take control of your checkbook and arm you with enough knowledge to answer the question - can I afford it? I often recommend that clients set up multiple savings accounts either with their current bank or an online one that pays them interest. Label one "emergency fund", the other "travel" and so on. Then simply set up a monthly draft to be taken from your checking to your savings. As the funds build up, you will make interest on your money AND you will be able to tell if you can afford that next vacation by simply checking your balance.
You must have discipline to not touch the money in a particular account for other items. For example, if you have $500 in your travel account, do not raid it to go buy clothes. If you are consistently transferring money, maybe you should put more money away monthly for clothes and not for travel. Remember, you may alter your system at any time and deposit more or less money into each account as you make it. The key is to project your expenses and have a simple, quick way to tell if you are able to afford that next item.
Many times the only reason we are not in control of our finances is because of time and with this simple system, you can be on your way to taking back control instead of having it control you.