How to Save for a Vacation

As the travel industry begins to rebound, you may be feeling a little, okay, more than a little cabin fever. For most of us, it was a year of closings and closings.

So now that things are opening up, dating has never been more attractive. But to make the most of your newfound freedom, you'll want to have a plan for where you're going.

More than that, you need to make sure you have the money to spend when you go and have a strategy on how to spend it. Learn some easy savings tips ahead of time so that when you hit the road, you're financially ready for the long-awaited vacation.

Watch Balance also return to travel with "Our Travel Money," a series of stories about navigating today's world of travel and paying for it.

Set a vacation budget

Knowing how much your vacation will cost is one of the main factors to consider when planning a trip. Creating a vacation budget does more than just give you peace of mind - it allows you to be prepared for whatever cost comes your way.

This can mean the difference between easily accommodating unexpected charges or ending up with a negative balance on your bank account, or worse, getting stuck on high-interest credit card payments.

In 2019, US residents booked 1.9 billion single-person trips, according to the US Travel Association, and direct spending on leisure travel by domestic and international travelers amounted to 792.4 billion. of dollars.

Common vacation costs to consider include:

Transportation: plane ticket, car rental, train tickets.
Accommodation: hotel, Airbnb, hostels
Food: groceries, planned meals outdoors.
Extracurricular: tours, attraction tickets, souvenirs
Miscellaneous: car rental insurance, security deposits, unexpected fees
Commit to a savings plan
Saving for a big trip can seem very difficult, especially after listing the numbers. But planning ahead means you'll have time to save in advance for all your expenses.

The easiest way to create a savings plan is to divide your projected budget by the number of months until vacation. This number represents the amount of money you need to save each month to have enough for the trip.

Let's say you need $ 5,000 for your vacation and you plan to travel in 10 months. You will divide $ 5,000 by 10 to get to $ 500; that's what you should plan to save each month.

If the number you found seems insurmountable, don't worry. There are many ways to make this manageable, including the following strategies.

Extend your hours: If you can, postpone your vacation for a month or more. If you can do this, it will lower your monthly savings amount, giving you more time to save.

Cut the Fat - Take a look at the planned expenses you've thought of and see if there are costs that can be cut. Can you use public transport instead of renting a car? How many bags are you checking that may incur an additional charge?

Could you use a credit card that entitles you to check luggage for free? Cutting down on some of the extras on your trip can lower your grand total.

Open a savings account - Checking accounts generally do not earn interest. Instead, open a savings account that will give you some money for every penny you save. Maximize your savings by opening a high-yield savings account instead of one at your local bank.

Use a credit card to start saving

If you are looking for a way to significantly reduce your travel costs, you may want to consider opening a travel rewards credit card.

Oftentimes, these credit cards will come with a great welcome offer when you reach a certain spending goal. These points can be redeemed for flights, hotels, and even excursions, depending on the travel rewards credit card you choose.

If you sign up for the card early and spend regularly on the essentials of the day, you will earn even more travel reward points, in addition to any sign-up bonuses, which can help defray your travel expenses.

Automate your savings

It can be difficult to remember when you want to transfer money to your savings. Fortunately, there are many options that automate the process for you, and some even reward you for it.

Find ways to earn or save more

If the cost of your dream vacation exceeds what you can save from your monthly income, it's time to examine ways both big and small to increase that amount.

Consider doing a side show or renting a room - are there any part-time jobs you can do to increase your vacation savings? Or could you get a roommate for additional income? Strategies like these can drain your savings.

Reduce household expenses: Cut down on entertainment expenses, cut the cord, or replace restaurant meals with homemade food. Apps like Trim and Truebill can also help by checking and canceling unwanted monthly subscriptions, negotiating lower bill payments, and even giving you a bonus for the amount of money you save each year. Then put all that extra money into your vacation savings.

Use shopping portals - An online shopping portal is a website that rewards consumers with points, miles, or cash back for shopping at various merchants. When shopping online, use a shopping portal like Rakuten to earn cash on your purchases. Cashback Monitor will show you which programs offer the best returns on any purchase you make.

Add Refund Apps - Apps like Ibotta, Dosh, and Fetch will give you cash back on groceries, dinners, hotels, and more. Some of these services are automatic, while others require you to upload your receipts. When you use them with reward credit cards, the additional earnings can increase.

 

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Source:road jess traveled

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