- Knowing how much time you have until your vacation can help you decide on the best place to put your savings.
- Be thorough when you estimate the cost of your vacation. Don’t forget any possible expenses, like tips and souvenirs.
- Take advantage of credit card rewards, discounts offered for specific airlines and hotels, and loyalty rewards.
It can be hard to save a little extra money for vacation. But, if you know how, that trip can become more than a dream. We’re here to help you with some creative ways to save money so you can take your travel fund from empty to ready to fly.
Plan early and thoroughly
This might seem obvious, but the earlier you plan, the earlier you can start putting money into your vacation fund.
There are 2 ways to go about building your vacation savings: you can either settle on an amount of extra cash you’d like to accumulate and then plan a trip you can take with that amount, or you can plan your vacation, calculate the vacation budget and start saving money accordingly.
Knowing how much time you have until your vacation can help you decide on things like where to put savings. If you have limited time, you might just use a regular savings account that you can withdraw from easily. If you have more time, you could let interest build with certificates of deposit (CDs) or a money market account. These savings tools tend to have higher interest rates than savings accounts but might limit withdrawals before a certain amount of time has passed.
Learning how to save for a vacation is a great way to exercise some control over your financial future. Another great way is to sign up for Best Egg Financial Health. Its many tools and resources could help you understand your current financial picture so you may begin building a brighter financial future.
Tips on how to save for a vacation
Let’s get into the details of how to fill your vacation savings account and cover all your travel costs.
1. Plan for everything
Sit down and think about your trip from start to finish, and make a list of all the costs, including:
- Airfare, train tickets, or gasoline
- Lodging, including hotels, rental homes or hostels
- Transportation, including taxis, rental cars, trains, buses, and parking charges
- Food and drink
- Entertainment, including museums, live shows, and tours
- Shopping, including souvenirs and things you’ll need during the trip
Do some research to get accurate prices on what these items could cost. Don’t forget to factor in tips, where appropriate. Then create a basic travel budget to get an idea of how much money you’ll need. That’s your savings goal.
2. Set up a separate account
When you’ve created your vacation savings plan and you’re ready to start tucking money away, it’s best to open a new account for it. A separate bank account or another type of fund can help you avoid spending your vacation savings while it’s in your checking account. This will help you build the funds and make that big trip a reality.
3. Set up automatic deposits
Once you’ve set up that vacation account, it’s time to create automatic transfers. Look at your monthly budget and determine how much you can transfer to that account each time you get paid. Then you can watch your monthly savings grow.
4. Cut back on spending
Take a look at what you spend each month and identify some areas where you can cut expenses. Food is likely one of the biggest monthly expenses where you can find savings. Eating smarter could help you save for a vacation. You can fuel your vacation fund if you make dinner at home, pack your own lunch, make your own coffee, and buy store brands.
If there are specific expenses you can go without and redirect that money toward your vacation account. Consider cutting expenses like a gym membership or streaming subscriptions off for a while. Then, make sure the amount you save is part of your automatic deposit. It’s rewarding and reinforcing to see that money in your special Vacation Fund.
5. Maximize credit cards
If you have any rewards credit cards, use them to your advantage. Cards that give cash back rewards, can be saved for your next vacation. Many credit cards with travel rewards may give you extra credits when points are redeemed for travel expenses like airfare, hotels or car rentals. Factor those rewards into your travel budget and use those cards where you can.
If you don’t have any such cards and want to open one, remember that some have signup bonuses. Look for bonuses that can be applied to your trip.
6. Look for deals
Need any specific or expensive items for your trip, like skis, kayaks or tents? Check out second-hand options with garage sales or apps. You can also shop thrift stores or explore rental options instead of splurging on new gear.
7. Check out loyalty programs for discounts
Many hotels and airlines offer rewards or discounts through their own loyalty programs. Make sure you’ve created accounts with any potential lodging or travel groups you plan to use and take advantage of any loyalty perks they offer. It can help you save a few bucks.
8. Earn extra money
Have a side hustle? Use it to bring in a little more money in your spare time. Things like a side job, delivery services, ride shares, or freelance work can help you bring in extra income and increase your monthly savings amount.
9. Be single-minded
Funnel any extra money into a vacation account. We’re talking work bonuses, birthday cash, tax refunds, and income from side jobs. If it’s a family vacation or you’re going as a couple, consider going light on gifts leading up to the vacation. Instead, put that money into your vacation fund.
10. Use money-saving apps
Many apps are out there to help you save money, even if it’s just a small amount each day. You can use apps like Digit to create automatic transfers to your savings account. Others, like Acorns and Qapital, automatically round up your purchases to the nearest dollar and put the difference into your savings account. If you use these budgeting apps all year, it’ll add up over time.
11. Sell stuff
Got anything collecting dust that could be used by someone else? Sell it and put the funds toward your vacation account. You might be surprised by how much you can make selling things you no longer use. Second-hand marketson social media and certain apps make it easy to turn unused items into cash. You can sell clothes on apps like Depop and Poshmark, and just about anything on platforms like OfferUp and Mercari. Or, you could go with a yard sale.
12. Look for housing swaps
Lodging is often the most expensive part of any trip, but a housing swap is one way to lessen the financial impact on your budget. You can rent your home out while you’re gone to help make up the difference. Sites like HomeLink or Home Exchange list homes that are available in locales around the world and can connect you with travelers that may be interested in renting out your home. Or you can list your home on sites like Airbnb or Vrbo.
How to save for a vacation
A little planning, perseverance, and creativity go a long way toward saving the money you need for a vacation. When you come home with memories, souvenirs, and little or no debt, you’ll be glad you made the effort.
This article is for educational purposes only and is not intended to provide financial, tax or legal advice. You should consult a professional for specific advice. Best Egg is not responsible for the information contained in third-party sites cited or hyperlinked in this article. Best Egg is not responsible for, and does not provide or endorse third party products, services or other third-party content.