The reasons why people seek out vacations run the gamut, whether wanting to explore the world, visit family and friends, or kick back and relax. Vacations tend to be much more enjoyable when you save up for them in advance as it eases discomfort and stress over covering expenses. Did you know that there are clever ways to save in advance for your vacation? The first step is to find a secure way to save money. The next step is to decide where and when to vacation and calculate the monthly amount you’ll need to save for your trip. The third step is to contribute to this account regularly. Additionally, don’t be afraid to think outside the box to find clever ways to save even more money for your travels.
One of the best ways to save for a trip is to open an account to which you contribute regularly. Unfortunately, holiday and vacation clubs have declined in popularity in recent years. These are types of savings accounts in which people make routine deposits throughout the year, whereby accumulated savings can be used for holiday expenses or travel. These clubs prevent people from going into credit card debt, which can spell financial trouble to pay for gifts or trips. Most offer the convenience of direct deposit. However, there may be catches to the clubs. Not only are they difficult to find, but members may encounter penalties for early withdrawals and, in some cases, even lose interest. If your bank or institution offers a holiday or vacation club, read the terms carefully. Avoid putting vacation money into accounts that penalize withdrawal of funds, especially when it comes time to pay for your trip. Savings accounts generally offer a safe place for you to save money, and most are insured by an agency of the federal government. Many also make the process of depositing money easy. Try not to link a debit card to your account to avoid the temptation to dig into those funds and to reduce your chances of theft associated with debit card use. While high-yield accounts are desirable, some require a high minimum opening deposit or minimum balance, or they may charge monthly and maintenance fees. So be sure to “shop around” for your best option.
Now that you’ve opened your account, it’s time to start saving. Say, for example, you choose Hawaii as your destination. You wish to go in one year’s time, giving you 12 months to save. Per Budget Your Trip, a week’s vacation to Hawaii costs on average $3,839 for a couple. You’ll need to add in airfare, car rentals or taxi rides if required, entertainment, restaurant food prices, and other expenses. Say, for example, your round-trip economy class ticket is $800 per person, you don’t require a rental, but you like to eat out at nice restaurants. So, you budget another $3,000 for entertainment, activities, fine dining, and souvenirs. At home, your pet will need to be boarded for the week, so that’s another $200. So, basically, rounding up, you’re looking at needing to save about $8,700 for the trip. Dividing that number by 12 months, you’ll have a target amount of roughly $725 per month. If this amount is unrealistic to save, consider pushing back your travel dates or adjusting your budget. Rather than go in one year’s time, go in two years, cutting the monthly amount you’ll need to save in half. Bear in mind that many people overextend themselves on vacation or underestimate the amount that they need. It’s better to save too much money than too little. If you have extra funds to start, add what you reasonably can to your vacation savings. Adding savings upfront can help you build a cushion if needed or reduce your monthly obligations.
Consider other clever ways to cut travel expenses, such as planning your off-peak trip season when hotel rates and airfare are generally more affordable. Opt to stay with friends or family rather than stay at a pricey hotel to cut overhead costs. Or select accommodations with a kitchen so you can prepare your own meals to eliminate restaurant expenses. Also, if possible, accumulate frequent flyer miles and apply them toward your trip. Most people get them by buying plane tickets and using the airline’s loyalty program. Frequent flyer miles also entitle travelers to money-saving bonuses such as waived luggage fees or upgraded seats. If you don’t have frequent flyer miles, no worries. Simply watch for airline deals. Don’t forget to use discounts available through your AMAC membership or inquire about military discounts if applicable. And think about trading favors with friends, including watering and caring for plants, pet care, gathering mail, and more. The money you save will be appreciated in the long run when you don’t have to stress over vacation costs.
We hope you've enjoyed this article. While you're here, we have a small favor to ask...
Support the AMAC Foundation. Our 501(c)(3) powers the AMAC Foundation’s Social Security Advisory Services. This team of nationally accredited advisors offers on-time, on-the-mark guidance for those approaching or receiving Social Security – at no cost.Donate Now