How to Save for a Vacation

FT Contributor  | 

Ah, summer vacations. They’re an iconic element of 21st-century life. It doesn’t matter if you’re heading across the country, exploring your own regional wonders, or sticking close to home, it’s natural to get that itch to go out and see new things every time the weather warms up.

This isn’t a geographically localized interest, either. In fact, one out of every two Americans at least plans to take a vacation each summer.

The problem that holds these plans up: finances. The stark truth is, vacations cost money — a lot of money.

Research indicates that the average vacation costs for an American can add up to as much as $2000. Compare that to the fact that the average income is a meager $905 per week, and one out of every two U.S. citizens is planning on spending more than two weeks or over 4% of their entire annual income on their summer festivities.

It may sound small, but that’s a lot of money to come up with for a few days of fun. If you find yourself planning a trip of this nature, but you’re not sure how to save for a vacation, here are a few vacation saving tips and tricks to make sure that you plan activities you can afford and budget all of the cash you need beforehand.

Budget for Your Vacation

Vacations are often linked with a feeling of spontaneity and unplanned fun, but any savvy vacationer is well aware that planning things out beforehand is a much wiser option.

Take the time beforehand to consider your options, break down the costs, and then plan how much time you need to save for your trip. If you can do this first, you’ll be in much better shape, financially speaking, when your official travel dates roll around.

Typically your monetary considerations should be broken down into two categories: big expenses and small expenses.

Big Expenses

The big expenses are the elements of your vacation that are going to cost larger chunks of money. They include things like:

  • Primary travel. What is it going to take to get to your vacation destination and back? How far is it? How will you get there? Do you have options?
  • Secondary travel. Once you get to your vacation destination, do you need to do any more traveling? What will it cost to get around?
  • Accommodations. Are you going to camp? Are you considering multiple nights in a hotel? If your trip is an annual occurrence, you may even want to look into a timeshare.
  • Entertainment. While this can technically be in both categories, this kind of entertainment is referring to larger costs you can factor in upfront. Are you going to go to a theme park or attending a concert? Those are larger, plannable expenses.

Whatever your bigger expenses consist of, make sure to map them out beforehand. This enables you to do two things.

First, it allows you to understand roughly what you need to cover the larger, more defined elements of your trip.

Second, it enables you to look for discounts, take advantage of early-bird specials, and research and compare your options to save more while on your vacation.

Small Expenses and Incidentals

While it’s tempting to take the bigger expenses and just assume everything else will fall into place, the truth is, the smaller expenses can end up being a significant factor of any vacation as well. These include things like:

  • Food. You have to eat, even when on vacation, and eating out is expensive. Do you want to plan on eating out or can you curb the expenses by shopping at a grocery store while away?
  • Entertainment. Yes, this category shows up again, but this time we’re talking about the unpredictable entertainment. Will you have downtime while away? What kind of activities do you plan on doing? Will you be drinking alcohol, playing mini-golf, hitting up the local movie theater? These little things add up.
  • Shopping. Sometimes shopping is a necessity, but on vacation, it becomes an activity. If you like to shop, you’re going to want to factor in that part of your trip as well.
  • Souvenirs. Even if you’re not the shopping type, make sure to plan for some souvenirs. Budget both cost and space in order to make sure you know what you’ll need.

As you plan out your smaller expenses, you may want to consider padding your budget by 10-15%, as it will ensure that you don’t have to be too stingy while on your travels.

Taking the time to consider both your bigger and smaller expenses beforehand is an excellent way to both create a roadmap of your trip and head off any unnecessary spending.

Create a Vacation Savings Goal and Timeline

Once you have your expenses figured out, you’re going to want to add them up in order to create a vacation savings goal. Then you can create a timeline in order to start saving for vacation. Here are a few suggestions for how to go about saving up some vacation cash over the long term.

Open a Dedicated Savings Account

If you struggle with the discipline of saving on a weekly basis, you may want to consider opening a dedicated savings account. This simple strategy is a classic psychological tool that creates an “untouchable” chunk of cash set aside in a completely different bank account.

This helps to keep your vacation budget separated from your other expenses, and can curb any other splurges or over-spending activity in the interim that might otherwise affect your vacation plans.

Try to Earn More

There’s also the option of earning extra money. This becomes much more attainable when you have an actual goal you’re trying to reach. There are plenty of ways to bring in a little extra cash, including:

  • Picking up some overtime at work.
  • Monetizing your other skills and then looking for a side gig.
  • Selling your old or unwanted items.
  • Setting aside your tax refund.

Whatever you choose to do, working to bring in a little more income can be a great way to ease the financial burden of a summer vacation.

Cut Your Spending

Of course, in addition to bringing in more money, you can also try to spend less money. Comb over your budget and look for any ways you can trim things down. Remember, you’re doing this in the name of your vacation, so it should make things a little bit easier.  

Here are a few suggestions for areas to consider cutting spending:

  • Stop eating out when you can, and look for ways to buy groceries in bulk. Even if you’re a fan of eating healthy, you can still eat healthy on a budget.
  • Take a look at what you spend on entertainment and repurpose some of that towards your summer fun.
  • Look for a cheaper gym — memberships are expensive!
  • Reduce your streaming services — they shouldn’t add up to more than your cable bill.
  • This one’s more extreme, but if it’s possible, consider finding a more affordable place to live.

And there you have it. From discovering your costs to budgeting things out, figuring out how to save money for a trip doesn’t have to be quite as intimidating as it sounds.

So what are you waiting for? Brainstorm some plans, figure out your budget, and then start saving for a vacation that you can enjoy without breaking the bank in the process.


Image Source: https://depositphotos.com/

This post was updated November 11, 2019. It was originally published November 11, 2019.