Whether it be fun in the sun or the trip of a lifetime to Europe, you’ll need a vacation savings account. Financial planning is crucial in saving for a vacation. Consider opening a dedicated vacation savings account to make the process easier and more efficient. Otherwise, that vacation could bankrupt you, and you won’t be able to enjoy yourself. We’re here to help you. We’ve compiled ten ways to save for a summer vacation.
1. Create a Savings Goal
Start by researching your destination to determine how much money you’ll need. What will the hotel, food, and activities cost? Don’t forget to budget for souvenirs. If you don’t have a target savings goal, you’ll be shooting in the dark. Don’t set yourself up for failure; have a goal, so you know what you’re really working for. Setting a savings goal is a crucial part of good personal finance practices, helping you make smart financial compromises and strategic spending decisions.
2. Set a Vacation Budget
Determine what income is coming in and what your expenses are. Don’t forget to figure in the “wants” in your life like coffee shop coffee, dinners out, concert tickets, etc. Consider using extra money from side jobs or other sources to fund your vacation. You can’t do anything about the fixed expenses like rent and utilities, but you can control all the other costs. Additionally, leveraging credit card rewards can help with your vacation budget by redeeming points and miles for travel savings.
3. Cut Back on Expenses
Once you’ve determined what your expenses are, start cutting back. Don’t go to the coffee shop daily; instead, make your coffee and pour it in a go cup. Skip take out or dinner out and shop at a discount grocery store. Anything you can do to lower expenses will help you afford that vacation. Additionally, consider finding free cash through rewards programs or other means to save even more.
4. Look for Forgotten Money
Look for money you haven’t used. For example, can you return some items you don’t want to the store or use existing rewards points to save on travel expenses? Travel rewards credit cards from various banks offer benefits like free checked luggage, airport lounge access, and concierge services for booking tours and event tickets. Do you have credit card points you haven’t used? Maybe there’s money in Venmo or PayPal you haven’t claimed. Those forgotten gift cards can be sold on sites like CardCash for extra cash. Think of all the places you can find money, including your coat, and start saving it.
5. Open Up a Vacation Account
Don’t deposit your vacation money in your checking account. Instead, open a dedicated vacation savings account. Using a high-yield bank account for vacation savings can help your money grow faster. You’ll be too tempted to spend it if it's in your checking account. Open up a separate savings account in an online bank. Online banks like Sofi and Ally offer high-yield savings accounts where your money can earn interest for you. So, not only will you save money, but the online bank will pay you more interest than a traditional bank.
6. Leave Enough Time to Save Consistently
Try to leave yourself time so you’ll be able to save in small chunks. Saving $60 a week is more manageable than saving $500 a week at the last minute. No matter what amount you save per week, it won’t be a hardship if it’s worked into your budget. It’ll be a designated expense. Financial planning is crucial in ensuring you have enough time to save consistently.
7. Grocery Shop with a List
Plan meals and save money using a list at the grocery store. You won’t be tempted to impulse buy if you have the discipline to only buy what’s on the list. Even better, shop online and use curbside pick-up so you never go in the store.
8. Increase Your Income
Can you work overtime to earn some extra money? If so, put that extra pay into your vacation savings account. You can also find a side hustle like dog sitting using Rover or selling your stuff online with Poshmark. Going through your house for stuff and having a garage sale is also a great way to earn some cash.
9. Cancel Subscriptions
How many streaming services do you subscribe to? The average household has four services. Start cutting them out. You may find you don't use some of them anyway.
10. Pay with Cash
Don't keep very much money in your account. Pay for everything you buy with a debit card or cash. Do not use your credit card. This is not the time to run the balance up. You'll end up with a big payment and no money for a vacation.
Conclusion
With a little thought and discipline in financial planning, you can save for a vacation. You don’t have to cut everything out, but don’t splurge on unnecessary items. Just think about your goal and all the fun you will have when you make that goal.
Remember, personal finance plays a crucial role in achieving your vacation savings goal.
