Ahhhh vacation… If you’re anything like me you live your life around your vacations. When planning for a vacation it’s really important that you take the steps necessary to create a vacation savings plan. Having a plan in place to save money for vacations is your no-fail way to guarantee you have the money you need when you want to getaway.
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What Is A Vacation Savings Plan?
You may be wondering what is a vacation savings plan and is it any different than a regular ole savings account? I’m glad you asked because as a matter of fact they are different.
By having a specific account in place that is used to prioritize the things that matter most to you is your guaranteed way to afford travel. When people aren’t purposeful with their savings it’s very easy to become distracted, making it much more difficult to save for specific goals.
Pick A Destination To Travel To
It isn’t 100% necessary that you have your destination dialed in but if you can it really helps with the saving money process. If you’re able to dream, visualize, and feel yourself in the new place it will make saving money so much easier.
Some good money-saving tips to keep in mind when planning your travel is to consider going to areas during their off season. If you can align your travel during the destinations off-season it will not only save you a ton of money but a ton of time. Time is money isn’t it?
Let me explain…we recently visited the Blarney Castle in Ireland and were able to get to the top of the castle without having to wait in a line. We were laughing as we saw sign after sign along the way that said “1 hr wait till the Blarney stone”, “45 min wait” and so on.
Lucky us, we didn’t have to deal with any of that waiting around. Had we gone in the busy tourist season we would have been stuck waiting in lines eating up our time and keeping us from seeing other things we hoped to see.
Also remember you can save money by taking your vacation during mid week rather than weekends. Hotels usually jack up their prices over weekends.
Determine The Cost Of Your Trip
I know that this may sound easier said than done but start looking into airline tickets. Do they appear to be more expensive than you would have thought?
If so, I recommend looking again on another day, I’ve found that prices for tickets can vary significantly depending on the day you look.
Clear the cache on your computer so that it appears that this is your first time looking for tickets. Travel pros recommend doing this because when airlines know you’re searching for a particular destination the tickets may become more expensive as time goes on (I don’t know if this is “REALLY” true, put personally I’ll do it if I can get the best flight deals possible).
Start figuring out how much accommodations will cost you. You can do this by going to Booking.com and browsing the cost of hotels for the area you want to visit.
Knowing how much accommodations cost is essential because if hotels are astronomically priced it’ll make it much more difficult to afford your vacation. I’ve had the experience where I found a killer deal on airline tickets but after looking at hotel costs I realized it was completely out of my budget to travel to that particular city.
Start Budgeting For Your Vacation
When creating a budget you’re going to want to factor in transportation costs to your location. You’ll also want to think about the costs you’ll pay for transportation once you’ve arrived at your location. There’s also accommodations, food, and activities to add in.
Many people find great success by using sinking funds to help save for vacations. If you’re not familiar with sinking funds and how they work you can read about them here. In short, sinking funds are savings accounts you use to stash money to allow you to afford your dream trip.
Start Growing That Vacation Fund
Now we need to decide how many months we have to save for travel? Obviously if you only have 3 months you’re going to have to kick this savings process into high gear. Yes, you may even have to make some sacrifices to your everyday living.
Don’t stress there are tons of different things you can do to save money fast or perhaps even make more money to afford your vacation. I’ll cover this below.
Depending on the amount of time you have to save for your vacation I like take the time frame of your departure and work backwards.
Let’s pretend you’re planning to leave in 3 months and you need to have $2,000 saved for your trip.
What I’ll do is take the total cost of the trip and divide it by the number of paychecks you’d receive leading up to your trip.
For example: I get paid 2 times a month so what I’d do is take $2000 and divide it by 6 (6 pay periods in 3 months). By doing this simple math I see that I need to put $333 away each pay period into a good savings account or sinking fund.
Tired of the almost zero percent returns on your current savings accounts? I don’t blame you. CIT Bank has 22x higher returns than those “big banks” and they only require $100 minimum deposit to open an account
What Not To Do With A Vacation Savings Plan
Please please the one thing you NEVER want to do is put any of your travel on a credit card if you aren’t able to pay it off in full right away.
I’ll be honest, I do use credit cards and rewards programs quite often to afford our travel. But I know that I HAVE to pay them off in full each and every cycle.
If you know you’re the kind of person who may have a difficult time paying off your credit cards don’t start down the path of using them. Believe me….aint no one wanting to go into debt for a vacation, it’s super counterproductive and not the direction any of us want to go.
Track Your Spending While On Your Trip
This doesn’t have to be something you sit down and do everyday but it’s a great way to get a better idea of what your spending habits are when you travel.
A super easy way to keep track of your spending automatically is by installing the Personal Capital App onto your phone. The Personal Capital App keeps everything organized and categorized so you don’t have to.
If you prefer the ole pen and paper way (I’ve done this in the past) just keep a running total of costs during your trip. I don’t always get super specific with categorizing (food, entertainment, activities, taxi) my costs while I’m away, but I do make sure to jot down an approximate amount spent for each day.
How To Increase Your Money To Afford a Vacation
A good way to make some extra money is by selling your old phone or electronics on Decluttr. You can also use Facebook Marketplace, or your local consignment store to sell things your no longer need.
Did you know that by tapping into some of your favorite hobbies you can actually make additional income? It’s true a lot of people can make good money by creating income producing side hustles with their hobbies.
I really like challenges so one of my favorite ways to increase income is by creating a challenge. Creating a vacation savings challenge is a fun way to see your account grow quickly.
Saving For A Vacation On A Tight Budget
Ok, I totally get it when money is tight it’s not so easy to save for something like a vacation. But how about looking into a 3 day camping trip or using Groupon or TravelZoo to help you find a cheap and affordable getaways at a discounted price?
Yes, it’s true you may not be able to afford an expensive exotic getaway to some island but by using discount websites you’ll receive notifications for trips at a fraction of their original price.
Tips to help you save when your budget is tight:
- Try some of these meal planning ideas to cut back on grocery costs
- Cut your food budget in half by some of these tips
- Use a cash envelope budgeting system
- Use something like Acorns to help you save money on each and every purchase.
We regularly use Acorns and it’s always a surprise to see an additional $6 here and $6 there deposited into our savings.
This is money I don’t even realize is being saved. Acorns makes it soooo easy. To learn about why you should consider using Acorns read more here.
Do you have an extra $100 burning a hole in your wallet? Now’s your time to put your cash to good use!
Cit Bank is an online banking company that offers some of the highest interest rates around. Why not take advantage of these interest rates now?
Final Thoughts On Vacation Savings Plan
I hope you’re walking away with some useful information after reading this. By putting a plan into place and following your plan you are much more likely to save the money needed to go on your dream trip. Remember, you first have to create a budget and then decide where you’re going to stash your money so it’s out of site out of mind as you build your vacation savings.