How to Save for a Vacation on a Tight Budget
It's no secret that vacations can be expensive. It can seem like an impossible task if you're trying to save for a vacation on a tight budget. But don't worry, we're here to help!
In this article, we will discuss some of the best ways to save money for a vacation. We will also provide tips on how much you should save each month to have enough money for your dream trip.
As tourism recovers, the industry is likely to experience cabin fever. We're mostly on our own in the last few days of the holiday shutdown. So now, the opportunities for reopening have never been more compelling. To take full advantage of your newly discovered freedom, you should have an action plan in mind.
You must ensure that you have a vacation savings plan of what you will be spending it on before you get there. Find some simple forms to save money in advance to make sure your travel plans are ready to be completed. So, keep reading and start planning your next adventure!
How to estimate the travel cost for my next vacation?
It's easy to overspend on your dream vacation, but with a little planning and some self-discipline, you can take the trip of your dreams without breaking the bank. Here are a few tips for estimating the cost of your next vacation and creating a savings plan to make it happen:
There are two different points of view when we want to set a vacation budget.
The first one starts by figuring out how much you can afford to save each month based on your present financial situation, determining your monthly budget, and subtracting the amount you want to set aside for your vacation fund.
With this "vacation fund," you can later decide what kind of vacation you can afford based on your travel budget without affecting your everyday finances.
The other point of view uses the opposite approach. You start by estimating the total travel costs of your dream vacation. This might include airfare, hotel accommodations, car rental, restaurant meals, activities, miscellaneous, taxes, and tips.
Add up all of those expenses and divide by the number of months you have to save. This is your "monthly savings amount."
In the first approach, you adjust your dream vacation to your present financial situation. In the second approach, instead of renouncing your dream trip, you find creative ways to earn extra money that will help you save thousands of dollars necessary to fulfill your dream trip.
Regardless of the approach, you decide to follow. Both require a little bit of research, planning, and a little restraint to work. The best way to save money for your dream vacation is a combination of both approaches.
The next question you need to answer yourself is:
How much should I save each month for my dream vacation?
The answer to this question depends on many factors, such as the cost of your desired vacation, how many months in advance you are planning, and the current financial reality.
If you can save extra money each month, you may be able to take your dream vacation sooner than you think. However, if you can only afford to save a small amount each month, you may postpone your departure date to reach your goal.
Across the country, Americans spend an average of $1.245 on travel during the summer. These figures include everything from long-weekend outdoor adventures and budget-friendly outdoor destinations to long trips to spendy international hotspots to unique getaways and exclusive vacations.
How to estimate the total costs of your vacation
So, to estimate how much should you save each month for your next trip, you need to follow these steps:
- Decide your destination.
- Decide where exactly you want to stay.
- Decide how many days and nights you want to stay in such a location.
- Clarify if other travelers are going to travel with you.
- Research and pre-select a series of activities you want to do while staying in such a place. Include the costs of any admission tickets, meals in restaurants, etc.
- Calculate the cost of transportation. Are you going to purchase flying tickets? Are you going on a cruise? Are you going to need to rent a car, or perhaps you could solve your commuting to your destination with public transportation? Ensure you have accurate numbers for your hotels, airfare, and rental cars.
- Create a buffer to cover any fluctuation in your travel expenses, such as taxes or any currency fluctuations for international travel.
Once you have estimated all your related travel costs, you need to decide when you want to take your big trip. It might take you just a few months to reach your goals; it might take you a few years to fulfill your dream.
Numbers don't lie. Do your homework, do your Math, and know exactly how much you will need to save each month to have the vacation of your dreams and not a nightmare during your vacation.
How much money do you need per day on vacation?
How much money you will need per day on vacation depends on where you're going and what you plan to do. If you rent a car and stay in a hotel, you'll need more money than taking public transportation and staying with friends or family.
Here are some tips for saving money while you're on vacation:
- Bring snacks and drinks with you, so that you don't have to buy them at the airport or in restaurants.
- Does your room have a small kitchenette where you can fix a cup of coffee and some snacks?
- Rent a car if it makes sense for your itinerary - this can be cheaper than taking taxis or public transportation.
- Consider staying at a hotel has breakfast included.
- Plan your purchases, so you avoid overspending.
- Ask friends or family if they can put you up for free or at a discount - this can save you a lot of money on lodging.
Make a savings plan
Saving for the trip may seem daunting. That is why it's so important to plan your finances to rest assured that you have the extra money you will need for everything, including saving money for a special emergency fund for your vacation.
How can one create an effective savings plan? These numbers indicate how long you need to spend every month to make a decent amount of travel.
Sometimes, coordinating the schedules of every member of the family to travel on a long vacation seems impossible. I suggest you think out-of-the-box on those occasions.
For instance, you can plan one small get-away every month, with dinner, night event, hotel, and breakfast included.
That way, you could easily set aside, let's say, anything between $200 to $300 per month for that romantic weekend get-away.
By the end of the year, you will have had no less than 12 nights in a good hotel, with your romantic partner, with dinner for two and breakfast included for around $3,600, without even noticing it!
Create a savings goal
When planning, get information about the estimated travel costs, rental automobiles, gas, hotels stay, meals, souvenirs, or special excursions. If you total these costs, the savings will begin to come in.
You can then reverse the course of your savings goals. Divide your total vacation cost into the number of months you have between today and your next big vacation. You can easily determine what money you need to put aside each month.
For instance, the amount you'll spend on a journey that will happen in 7 months from now is $1400; you will have to come around to $200 a month to reach your goal.
Where should I save my vacation money?
The best way to reach your savings goals is to open a savings account that you will use exclusively for this purpose. This will help you stay disciplined and not spend the money saved on other items or expenses.
Also another great idea is to set up automatic monthly transfers from your checking account into your vacation savings account. This method will help you make sure that you are consistently saving each month without fail.
Last but not least, if your employer offers a vacation incentive, consider using it for your next vacation. The reason is that you will be able to save money, which will help lower the overall cost of your trip.
Open a Dedicated Savings Account for your Vacation
Establishing a dedicated savings account is essential to saving for your big trip. In the United States, you can open a bank account at any local bank and even use an online bank to get fewer withdrawals.
Remember, a vacation is something you WANT to do. Therefore, based on the 50/30/20 Budgeting Rule, make sure that whatever amount you allocate towards your trip falls within the 30% you can spend money on.
Automate your monthly savings.
Sometimes, it's hard to remember the money you have to transfer into a savings plan. Thankfully, it's easy to automate your entire workflow with your bank account —some even offer rewards for your efforts.
Once you have opened your new savings account for your vacation, it's time to set up automatic transfers to your vacation savings account and keep those transfers until you reach your savings goal.
Create an emergency fund for your travel
Life is full of unexpected events, and our time traveling is not the exception. That is why so important to create an emergency fund that you will have available in casean unexpected expense arises, so that you won't need to use your credit card to cover for it.
Download Money-Saving Apps
Ensure you get the latest tech tools to save money. We suggest you also read our article on "The Best Savings Websites to Help You Save Money", where you will find useful information on different websites and apps, as well as rewards credit cards that will help you to have more money at your disposal and find discount coupons, including for travel.
Once you have opened your dedicated savings account for your vacation, make sure you use their savings app to automate the transfer of the monthly savings amount you have decided to put aside.
Saving money strategies to generate extra money for your vacation
One of the best money-saving strategies is generating the extra cash you will need so you don't incur new debt to travel. So, if you are looking for ways to generate some extra income, we suggest you check out our article "51 Ways How to Make Extra Money."
By following these steps, you will be able to save for your dream getaway without breaking the bank!
Make your credit cards work for you.
If you are interested in lowering the travel cost, you can open an airline reward card. Sometimes this credit card offers a large welcome package for the person that reaches the spending threshold.
Depending on your chosen rewards card, this point may also be used for flights, hotel stays, or even tours. You'll also gain additional travel rewards points and any signup bonus that helps cover your travel expenses.
You can use your reward points, card, or both to cover the costs of your trip to your dream destination.
Consider opening a new credit card. Some credit cards offer a sign-up bonus, so you can also earn additional credit card bonuses that you can redeem for cash while shopping online for your retreat!
Consider using credit cards that collect airline miles for the entire year. You could spend some of these miles earned on your next flight!
Also, consider using travel services that offer vacation packages and discounts for their members, like:
- AARP, which members get 10% off at select hotels, up to 30% off select car rentals, up to $100 in extra onboard credits for select cruises, and a 5% rebate (up to $350) on eligible group hotel bookings. and
- Costco Travel, where members get huge discounts on packages, rental cars, cruises, and hotel reservations. For Executive Member purchases made directly from Costco Travel, a 2% Reward will be earned and applied after travel is completed. Plus the benefit of 3% cash back rewards on Costco Travel with the Costco Anywhere Visa® Card by Citibank.
Use Your Car to Make a Little Cash on the Side
Is your budget already too compromised? You can have a side job like becoming an Uber or Lyft driver in your spare time or arranging to carpool for your colleagues for ride payments.
You don't want to drive for others in your free time, but your car is in good condition? Consider listing your car in Turo. Turo connects local vehicle owners with people who want to rent a car in their neighborhood through the internet.
The firm earns money by taking 15% to 40% of the rental price, depending on the coverage plan purchased when becoming a host, and you get to keep the rest.
The average annual income of 1 car represented by the company on their webpage is $10,516. Not too bad for a side hustle!
Consider Selling the stuff you don't use
If you enjoy vacations, you understand the importance of experience, not stuff. Look inside your home if it has something like this old Nintendo you stopped using a long time ago to sell online to make extra cash while decluttering your home.
Consider reducing your unnecessary spending to save money.
Grab a piece of paper and outline vertically across this area. On the left, write “NEEDS.” And on the right, write “WANTS.”
Put your spending money in their corresponding column. Make yourself genuinely honest.
Once you have finished classifying your monthly expenses, consider reducing some of the expenses under the "WANTS" column to pay for your trip.
Ask yourself, are there any good reasons to pay Netflix? Do you really need cappuccinos at lunchtime? How about that beer? Tell me about the latest fashion purchases?
Some temporary measures could include doing more home cooking instead of going out for dinner or possibly temporarily canceling your gym membership to pay for your trip.
What other purchases can we eliminate or delate to have enough income to pay for our trip?
How do you build my travel fund so you can afford this upcoming vacation?
Vacations should be relaxing, but it's impossible to relax if you have been stressing about paying the whole lot. This will help make a quick and easy way to ensure you have enough money for that summer trip you've always longed for.
You can boost your savings by going to the beach without incurring on any debt or paying for it.
Saving for a vacation can be a daunting task, but it doesn't have to be. By following these simple tips, you can easily save up for the trip of your dreams without breaking the bank or recurring to any drastic measures. So start planning and saving today!
Now that you have the tools to save for your dream vacation, it’s time to put them into practice. Start by setting a realistic goal and breaking it down into smaller monthly or weekly goals.
Automate your savings so that you don’t even have to think about it, and make sure to reward yourself along the way!
Finally, get creative with how you fund your trip. There are plenty of ways to save up for a vacation without depriving yourself or going into debt.
Let me know in the comment below how you plan on using these tips to achieve your travel dreams.