You'll be dream-vacationing in no time!
The average family vacation may cost several thousand dollars or more depending on where you plan to travel, when, and what you plan to do when you arrive at your destination. Will you take a cheap weekend cruise from a port you can drive to? Pack up the kids for a trip to a local theme park? Maybe you’ll go all out for a few weeks abroad complete with a stay a luxury resort. Whatever your travel plans are, it’s not going to be free. And unless you want to charge your vacation on a credit card, you’re better off saving the money you’ll need slowly and over time. Here are 10 tips that can help you get started today.
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Start a Dedicated Travel Fund
Keeping your travel fund separate is the best way to ensure your vacation fund isn’t spent on bills. For that reason, you should open a dedicated high interest savings account just for travel that will reward you with a decent interest rate on money you save up.
If you don’t have a bank you love already, consider stashing your travel fund in a CIT Bank Savings Builder account. This type of savings account offers 2.15% APY when you open an account and deposit at least $100 per month.
Make Deposits Automatic
Speaking of deposits, it’s crucial to make yours automatic. When you don’t set up automatic deposits or transfers to your savings account, it’s too easy to let life get in the way and forget.
To give yourself the best chance at success, set up automatic transfers for payday or a specific day of the month. That way, your money will grow automatically no matter what.
Earn Banking Signup Bonuses
Some banks also offer signup bonuses that can incentivize you to open your new account with them. These bonuses can help thicken your travel fund in a hurry and they are easy to earn.
As an example, Chase offers up to $350 in bonuses if you open a checking and savings account and complete qualifying activities such as maintaining a minimum balance or setting up direct deposit.
Slash Your Monthly Expenses
You’ll have better luck saving for your next vacation if you’re able to spend less money each month than you have in the past. As you start building your travel fund, figure out areas of your life where you have wiggle room to make a cut. Consider reducing your cable television package to the bare minimum, dining out less and cooking more at home, and spending less money on entertainment each month.
These small sacrifices can add up and make saving for travel a lot easier.
Start Using a Monthly Budget
Another step to take is figuring out how to use a monthly budget to reign in your regular spending. Your budget doesn’t have to be fancy, but it does help to write out your monthly income and expenses each month with pen and paper. You’ll also need to set estimated budgets for discretionary spending categories like entertainment and food then track your actual spending so you don’t get off track.
Budgeting can require some trial and error to get the hang of it — especially at first — but it will be worth it if you are able to save more. The best part is, you can write your travel savings into your monthly budget and “pay yourself” as if you were paying a regular bill. Doing so can help you build momentum and stay excited about your trip.
Sell Your Stuff
Most of us have stuff we don’t want or need, whether that includes kids clothing everyone has outgrown, unused exercise equipment, home décor, or collectibles. If you can sell stuff you’re no longer using and divert those funds to your travel savings account, you can reach your goal even faster.
Save Windfalls and Tax Refunds
Also remember to save windfalls such as your end-of-year bonus from work along with your annual tax refund. Considering the average federal tax refund was $2,816 in 2017, you could make considerable progress toward your savings goals if you were able to stash away even half your refund for next year’s vacation.
Pick Up a Side Hustle
Another way to save more each month for travel is to pick up some sort of side job. This could include picking up more hours at your regular job, starting a part-time job during your spare time, or joining the gig economy to earn money your own way. Driving for Uber or Lyft and delivering groceries for Instacart are all popular side hustles since they allow you to earn money on the side on your own time.
Pick Up a Travel Credit Card
Travel credit cards make it easy to earn points and miles good for travel, but they only work in your favor if you can pay your balance in full each month and never pay a dime in interest. If you’re debt-free and plan to stay that way, research travel credit cards to see which ones might work best for your ideal trip whether that’s a cruise or an educational journey abroad.
Download a Cash-Back App
Finally, don’t forget that you can earn cash-back whenever you make a purchase with certain apps like Dosh.cash and Ebates.com. With Dosh in particular, all you are required to do is connect your credit card to the app and use it whenever you shop or dine with participating retailers and restaurants. You also get $5 for referring your friends, and you can transfer your cash to Paypal or your bank account once your balance reaches $25.
While cash-back earned via an app may not make a huge difference in your savings, even small amounts can add up. And if you’re buying groceries and necessities anyway, you may as well get whatever you can in return.