“Saving Money for Vacation” refers to the process of setting aside funds over time to finance a planned vacation or travel experience. This practice involves making regular contributions to a specific savings account or a separate fund, allowing individuals to accumulate sufficient funds to cover travel expenses, such as transportation, accommodation, meals, and activities.
By saving money for vacation in advance, people can avoid relying on credit or going into debt, ensuring a more financially stress-free and enjoyable vacation experience. The time to get away from it all, sleep in a different bed, eat food someone else makes, and see new sites.
Vacations are enjoyable and relaxing, but they can also be expensive. However, don’t worry, because it doesn’t have to be that way. You can have a great getaway without overspending or getting into debt. Yes, you can afford your trip by planning ahead and managing your finances wisely.
That’s right—you can cash flow your trip! It just takes planning ahead. We’re here to help by sharing how to save for a vacation in six easy steps.
1. Saving Money For Vacation Helps Decide When to Travel.
Let’s be completely honest here. If you are actively working on paying off your debt with Baby Step 2, this isn’t the right moment to go on a vacation. It is important to focus and be determined to eliminate debt from your life. Channel your energy and intensity into becoming debt-free. So, the first situation to think about taking a vacation is when you have successfully paid off all your debts.
Once you are debt-free and trying to decide when to travel, try some of these hacks:
- Look into off-season rates to the places you want to go.
- Fly on Tuesdays or Wednesdays for cheaper plane tickets.
- Set up your trip so you check in to your hotel on a Sunday (the cheapest day) instead of a Friday (the most expensive). That’s right—staying during the week rather than the weekend is usually cheaper.
Also, remember that there might be an event you’re going to or some time off from school or work that can help you decide on the dates. So, keep all these factors in mind as you begin your planning.”
2. Pick a Destination.
Whether you prefer relaxing on a beach or exploring national monuments, there’s a vacation out there that’s perfect for you and your budget. When choosing a destination, keep in mind that this trip is for you and your loved ones, not about impressing others on social media.
The goal for saving money for vacation is to create cherished memories and have a great time together, so pick a place you genuinely love and can afford.
3. Determine the Cost of the Trip.
Once you have figured out the “when” and the “where” for your vacation, it’s time to start planning the budget or “how much” you will need.
For example, if your dream vacation is a trip to Washington D.C., that’s a wise choice because the city offers plenty of free attractions to enjoy.
Here are some common vacation costs:
- Transportation: airfare, car rental, train tickets
- Lodging: hotel, Airbnb, hostel
- Food: groceries, restaurants, snacks
- Fun: tours, attraction tickets, souvenirs, tips
- Miscellaneous: unexpected fees
Here’s an example: Suppose you have researched and estimated the expenses for your trip. It includes flight for two people ($800), train passes ($60), four nights in an Airbnb ($600), food ($500), fun activities ($100), and miscellaneous expenses ($50). Remember, these numbers are just examples, not your actual budget.
So, your total expenses come to around $2,110 for a couple. Now, do the same calculations with the actual costs of your real-life trip to get your grand total. If it seems like a hefty amount, don’t worry. You can push your trip to a later date, giving you more time to fit this significant expense into your budget and save up for your vacation.
Additionally, consider looking for more deals and making small adjustments to your plans to bring down the costs. Aim for a date that’s feasible and budget-friendly.
4. Start Budgeting for Your Vacation.
It’s time to get down to business. The business of budgeting. This is the literal saving-for-your-vacation step. And it’s way easier if you set up a fund in your Every Dollar budgeting app.
- First, find your Savings budget category.
- Then click Add Item and label your fund—we called ours D.C. Vacay. And we even added in a patriotic American flag emoji.
- Tap to open your new budget line.
- You will see a piggy bank next to the word Fund. Click this and the next button that says Make This a Fund.
- Scroll down and put the total you need for this big expense as the target amount.
5. Work to Make Your Vacation Savings Fund Grow.
You are all set with a plan! Now, let’s turn it into reality. Just like Bruce Banner’s transformation into the Hulk, let’s grow your fund bigger and stronger. However, unlike the Hulk, you have full control of your finances.
To determine how much you should save each month, first, calculate the number of months left until your trip. Then, divide the total amount you need by the months remaining until you travel. This will give you the amount you should budget to save each month, which becomes your Planned amount in the fund for each month.
And where does that extra money come from? Here are some ideas for bulking up your vacation savings:
Drop to one Streaming Service
Pick just one budget-friendly streaming service—this will help you save for the trip and free up cash in your budget every month.
Go on a Spending Freeze
Try a no-spend challenge. Pay for essentials only for a week (or really ramp it up with a whole month).
Cut out Extra Expenses
No more concert tickets, spur-of-the-moment day trips, or fancy restaurants. Remember: This is temporary!
Find a Side Hustle
Make some extra cash you can throw directly toward your vacation savings.
Work Overtime Hours
Put in extra hours at work. Your boss will love you, and your vacation fund will too!
Sell Your Extra Stuff
Go online to sell all those clothes you don’t wear anymore or clean out your entire house and host a garage sale.
Save on Groceries by Real planning
Decide up front what you will eat for each meal throughout the week, and watch your vacation fund soar.
As you add money to your vacation fund throughout the month, all you have to do is type it into the Planned section! Every time you add money to the Planned section of your sinking fund, it immediately adds that amount to your fund.
6. Track Your Spending on the Actual Trip.
Budgets are not just numbers written on paper and forgotten. If you want your money plans to succeed, you must actively engage with your budget. That means tracking all your spending for the vacation, both before and during the trip.
Before you embark on your vacation, set up budget categories for each main expense. For instance, in the example below, separate budget lines were created for flights, train passes, lodging, and food. There’s also a small budget line for fun activities, considering the availability of free museums and memorials as the main attractions.
Thankfully, Every Dollar has a mobile version, allowing you to stay on top of your budget while on the go. You can use the app to follow the steps for saving for your vacation and track your spending throughout the trip to avoid overspending.
A important rule is to never put any vacation expenses on a credit card. Avoid the temptation of getting a credit card for points or miles—it’s not worth it.