6 ways to save money for vacation
It feels like it's time for a vacation, and you’re starting to plan for it. Among all the excitement of choosing a location, flights and a hotel, you'll also want to consider your budget. Depending on your plans, you may need to save a significant amount. Travel and accommodations, particularly if you're flying to faraway destinations, can be expensive.
Saving up for a trip creates anticipation that's part of the fun of travel. You can fulfill your goals — of heading where you want to go and spending your time the way you want — by saving for a vacation and creating a plan with steps to help you budget. These measures can also create habits that help you become a better steward of your finances.
Below you’ll find six tips to help you save for a vacation.
1. Set aside money and stay disciplined
It may be easy to say that you’re going to allocate part of your income each month for a vacation. It’s another thing to stick to your plan. You may need to formalize your vacation saving plan by writing out your strategy and goals.
As you set goals, you can create a payment timeline that helps you determine what you need to pay for and when. This planning may include milestones along the way. For example, you may want to have the cost of your plane tickets saved up three months before you're planning to leave. Tickets to international destinations cost less when you purchase them two or more months in advance. Or, perhaps you need to put down a deposit when you're booking the hotel; you'll want to know ahead of time what this amount is before you make reservations.
In addition, monitor how you’re doing periodically; these check-ins can keep you on track. Consider creating a vacation savings account just for travel. You can then set up automatic transfers that ensure that a certain amount of money from every paycheck goes into the account.
2. Analyze your expenses
Scrutinize your bank account and see where your money is going. You may be able to set aside more money from your current income than you realized. An online budgeting app can help you take firmer control of your spending.
You can create budgets for food, entertainment and necessities, although it’s important to stick to them. Alternatively, a popular way to budget is 50/30/20, wherein you allocate 50% of your after-tax money on necessities, 30% on wants and 20% on debt repayment and savings.
3. Save on services
You may be spending more on utilities than you need to. For example, you may be able to save on your entertainment habits by ending your cable service and switching to online streaming. This so-called cutting the cord can allow you to pay only for programming that interests you, as opposed to cable packages that carry higher fees. With some research, you may also find lower rates for telephone service and ways to save on your water and electricity bills. Take this extra money and put it towards into a vacation savings account.
4. Use your cash back and rewards
Credit cards that offer cash back, points and promotions can help you increase your savings over the long run. Look at the fine print of your credit card agreements to see which purchases can get you double rewards if you have a rewards card. You may be able to use the points you earn on airline credit cards to pay for airline tickets, too.
5. Use coupons and promotion codes
It may sound old-fashioned, but you can save money on goods and services by cutting coupons and taking advantage of promotional codes. One simple way to find deals online is to download an internet browser extension that can automatically show you promo codes when they're available. If you sign up for companies’ email newsletters, they'll often offer one-time promo codes with free shipping.
6. Involve a friend, visualize success
To help you stay on track, ask a friend or family member to hold you accountable, and visualize what success will look like to you. If you can envision yourself sitting on a beautiful beach or walking a beautiful trail in a foreign land, you might be that much more motivated to stay with your vacation savings plan.
After you save up for the perfect vacation, you want to protect yourself and your property while you're away. Find out more about Nationwide’s travel insurance, which can cover you while you're enjoying your well-earned trip.