An Amazing Guide to Saving Money for Vacation
Want to go on vacation while being short on cash? Then check out our guide to saving money for vacation and start planning your trip today.
Most Americans don’t take enough vacations. If you’re ready to step out of the rat race and get much-needed ‘me time,’ go ahead and mark your calendar for a getaway.
Start saving money for vacation way ahead of your travel date to ease your anxiety about spoiling yourself with leisure time. Here’s a guide to creating a vacation savings plan.
Look at Past Vacation Budgets
The best way to be realistic when setting up your vacation budget is to look at your spending habits from past vacations. Are you the tourist who likes to buy everybody at the bar a round of drinks?
Do you have a passion for souvenirs? Your personality dictates where you like to spend.
Don’t assume this new vacation will change you. Instead, make this a part of your budget so you can let your hair down while you relax.
Saving Money for Vacation While Broke
A vacation isn’t when you take your rent money and use it to buy a plane ticket. That’s a recipe for creating more problems than you started with.
Before you decide to save for a vacation, the first thing you need to know is how much it costs you to live each month. This budget shouldn’t include shopping sprees or dining out with friends.
Look at the minimum household related expenses you need to pay each month. Next, add your debts like credit cards where you currently carry a balance.
Starting with this budget is a great way to determine how much disposable income you have to save. It won’t be realistic for many people to save every extra penny, but it gives you a starting point for saving money for a vacation.
Where Do You Want to Travel?
Not all vacations are created equal. A trip to Fiji is bound to take less time to plan than a weekend camping trip to a local state park.
Set a savings goal based on your location. Include contingencies like travel insurance and plane ticket change fees in case anything goes awry.
Estimating on the high side gives you flexibility while negotiating fees and costs with vendors. You can also choose your vacation destination based on when you want to travel.
In general, if you’re planning to take a trip within 6 months from the time you start saving, aim for domestic destinations you can get to within a few hours plane ride. Leave international trips to when you have more time to plan out for the best airfare and hotel rates.
Certain times of year have rates that might be triple the cost of what it costs to travel during the offseason. The difference can be thousands of dollars in savings if you give yourself enough time to plan out your trip.
For example, if you’re considering Al Reem Island, you’ll want to go during Fall or Spring when the destination is less crowded. Fewer tourists in the area give you stronger negotiating power.
Set a Savings Goal
Once you know the kind of vacation you want, it’s time to start saving. Open a savings account specifically for your trip.
This is helpful if you have a habit of dipping into your savings account when your checking account balance gets low. Open an account that you can’t easily withdraw money from like an online bank account.
Be sure to decline the option of getting a debit card or checks for the account so you aren’t tempted to spend the savings. Make sure your savings goal is realistic for your destination based on how long you want to travel.
Divide your savings goal by the number of weeks until your travel date. If the savings amount is unaffordable, extend the travel dates to a later time.
The second option is to shortening your vacation. Either way, saving money for a vacation shouldn’t be a struggle.
If you only have one designated time frame for your vacation each year, you’ll have to estimate what’s possible based on how much you can save between now and that date.
Sell Your Stuff
Start selling stuff you no longer need to get extra cash for your trip. Sites like Decluttr buyback old technology and games.
You can host a yard sale and sell old furniture, clothes, and nicknacks to your neighbors. The money you make won’t be enough to retire, but it’s bound to cover the cost of ground transportation or snacks while you travel.
Use Your Tax Refund
Lump sums of money are ideal for vacation savings. If you don’t already have a purpose for your income tax refund, use it toward the cost of your vacation.
Tax refunds add hundreds, sometimes thousands, of dollars to your vacation budget. Set up a direct deposit so that your refund goes directly into your vacation savings account.
The IRS allows you to split up your direct deposit in case you need access to part of your refund to cover another expense.
Don’t Go Grocery Shopping While Hungry
Grocery shopping isn’t a small expense especially if you’re feeding a family. One trick to cutting back on your grocery bill is to avoid shopping while hungry.
You’re more likely to pick up foods you have no intention of ever preparing. Grocery shopping while hungry leads to overspending and distracts you from menu planning that can stretch your meals for the week.
Whatever you save in weekly groceries, put the money aside in your vacation savings account. It’s not enough to know you saved money. You have to reward yourself by putting the money you saved into your vacation stash.
Where to Start Your Vacation Savings Plan
An interest-bearing account is a great place to start saving money for vacation. You won’t get rich off the interest you earn, but it’s free money that can cover small expenses like tips during your stay.
Always plan at least 6 months ahead when traveling abroad to give yourself flexibility on the cost of airfare and hotel stays. These are the largest expenses for international vacations.
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