How to Save Money For a Vacation
You’ve planned out where you want to go on holiday and ready to submit your request for time off. You’re excited. That is until you look at your bank account. Maybe you’re thinking about how to save for a vacation in time, given your tight budget.
Of course, it depends on where you want to go and what’s in your itinerary, but saving for a vacation can take some time, especially if you’re after luxury amenities. Not to worry, because, with the right savings plan, you can go relax guilt-free where you decide to go.
Here are some ways on how to save up for a vacation.
Break Down All Costs For Your Vacation
How will you know how much to save for if you don’t know your costs?
While it’s stressful to think about the numbers, it’s probably going to be even more stressful if you have to worry about sticking expenses on a credit card bill or needing to take out a personal loan for it.
Breaking down the costs means taking a look at everything you’re going to spend on while on vacation — hotel, transportation, souvenirs, meals and tours. Come up with a rough itinerary of what you want to do and approximate costs.
Add them up and you have your vacation budget.
Got sticker shock? Here’s where you think about whether you want to spend that much. If you do, move onto the next step. Otherwise, tweak your itinerary until you come up with a more budget-friendly option.
Be Realistic About Splurges
It’s natural to get a bit spendy during a vacation. After all, you’re happy, relaxed and there’s so much to see and do. Putting yourself on a strict budget is only going to make you miserable, especially if you go over.
Instead, once you come up with your vacation budget, add in some extra wiggle room so that if you do splurge, it’s planned for. Besides, if you come back from vacation under budget, it’s a nice surprise.
Now that you have a number, it’s time to plan for how you’ll save for it. Working backwards means taking a look at the final budget, how much time you have to save, and breaking it down into smaller chunks.
For example, if your total vacation costs are $3,000 for a trip to Mexico and you want to go in six months, you’ll need to set aside $500 a month. You can even break it down further — it’s $125 a week or $17.85 a day. Even if this amount seems intimidating, there are plenty of ways to work toward your goal (*ahem* keep reading).
Open a Separate Savings Account
Opening a separate savings account means that you won’t be tempted to spend your money elsewhere. Plus, it can serve as a motivator to see how much you have left towards your goal. There are plenty of high-interest savings account options that can earn you a bit of interest towards your vacation.
Learn to Cut Back Temporarily
It can be worth it to cut back certain expenses for a little while so that you can go on the vacation of your dreams. Comb through your bank and credit card statements to see if there are ways you can cut back. Think canceling subscriptions you never use or consider packing your lunch instead of going out to each every workday.
You’d be surprised at how much you can save doing small actions. Who knows, these changes may turn out to be permanent, freeing up more cash towards other things.
Consider Setting Up Automatic Transfers
Setting recurring transfers from one bank account to another or directly from your paycheck helps you from overthinking things. That way, you know you’re saving enough money towards your vacation.
To figure out how much, take a look at how much you need to save each week or month and go from there.
Rack Up Rewards Using a Credit Card
How does a free or heavily discounted vacation sound? It’s totally possible if you’re careful about how you use credit card rewards. If you qualify for one, many issuers offer perks such as points towards free flights and hotels. Some, in an attempt to win your business, offer sign-up bonuses if you spend a certain amount with a specific amount of time.
Be careful though, if you rack up a bunch of purchases and can’t pay off the balance in time, you’re stuck paying interest, negating all the rewards you’ve just earned.
To figure out which credit card is best, look at where you want to go (such as hotel chains or your favorite airline) and search for a card that can offer you benefits you’ll use. Some of these cards charge an annual fee, so shop around to find one that suits your needs and wallet.
Start a Side Hustle
Learning how to save money for a vacation on a tight budget is going to be tough (sorry to break the bad news). In this case, your best bet is to earn some extra cash on the side on top of your day job. Consider only using what you earn from a side hustle towards your vacation. That way, it could help motivate you to make even more — you know, get that fancy hotel upgrade or splurge on a nice meal when you get there.
If it feels stressful, remember that you don’t need to do this forever. The beauty of a side hustle is that you can start and stop pretty much any time you want. Many side hustles offer flexible schedules, meaning you can work whenever you want.
Here are some ideas to get the ball rolling:
- Drive for Uber or Lyft – You’ll need to leave your house, but driving for rideshare companies offers a fairly flexible schedule. You can even pick up and drop off customers en route to and from work, so you can make money at the same time.
- Sell your used books – In fact, if you have a bunch of items that can be worth a pretty penny (and you’re willing to part with them), you can get some decent cash for them. Look around at local or online consignment shops like ThredUp, list them on eBay or even host a yard sale for smaller items.
- Tutor – If you’re super knowledgeable on a subject, there are plenty of people who will pay you. There are parents who will pay top dollar for someone to help their children, especially for subjects that’ll help them pass the SATs, for example.
- Freelance writing or editing – there are a ton of businesses (and even smaller websites) that need help with writing content like blog posts, emails or even ads. If you fancy yourself a grammar nerd, try your hand at editing. To find these gigs, reach out to businesses or job websites like Freelancer.com.
Stay on Course
Saving money towards a goal can be really tough, even if it’s for something as exciting as a vacation. That’s why it’s important to find ways to keep motivated and accountable. Maybe your friend is doing the same thing — why not push each other on? Or if you’re a visual person, print out a photo of where you want to go and stick on your fridge.
Keeping an eye towards your end goal without totally busting your budget (or even going into debt) is going to feel so good. Knowing you can sit overlooking the beach, with a drink in hand, and not worry about how you’re going to pay for it is going to make your vacation that much sweeter.