Summer vacation planning often begins around this time of year, when you start thinking that it would be nice to get away. But hopefully you’re also thinking about budgeting for a vacation. Vacations tend to go better when ample money is set aside for them. If you’re planning a summer vacation, try these strategies:
Budget for Your Vacation Early
If you know where you’re going, start working out how much it will cost. If you don’t know where you’ll wind up, then make a guess as to how much you’ll spend.
Once you have a number in mind, open a new checking account and make that your vacation fund, suggests Christina Lynn, a certified financial planner based out of Manhattan, Kansas.
Then, she says, “Set up an automatic monthly contribution on the day after payday from your primary checking account to your vacation fund account. For example, if your vacation is six months away and you need to save $1,000 in total, set your automatic contribution to $167 per month.”
If vacations are important to you, Lynn suggests continuing to automatically contribute to the fund, so that you always have the money to get away.
[See: 10 Steps to Achieve Financial Freedom.]
Utilize Cash Back Rewards Credit Cards
“A simple trick I’ve seen employed to great success is to get a cash back credit card,” says Steven Byrd, a financial coach in Greenville, South Carolina. “Someone can put most of their purchases throughout the year on the card and, provided they pay the balance off in full each month, accrue the cash back. Then when it’s time for summer vacation, they can use that cash as part of their vacation fund.”
Earn Extra Money to Pay for the Vacation
Roshawnna Novellus is the CEO of EnrichHER.com, a website for female entrepreneurs. She once came up with the ambitious plan to vacation in Thailand for six weeks.
“In order to do that, I needed to figure out the budget to live in Thailand and to cover the expenses of my home in Atlanta,” Novellus says. “I created a budget and then created an ad to rent out my place for that same amount for the entire time.”
If that doesn’t seem pragmatic — not every home is ideal for renting out — you could always try to bring in extra money by getting a part-time job or maybe holding a yard sale.
Start Cutting Back on Expenses — and Put Them Toward Your Vacation
It’s common sense, but we’d be remiss to not suggest it. For the time being, pump the brakes on going out to restaurants and impulse shopping — and start putting some of that money into your vacation fund.
[Read: 9 Red Flags You’re Making a Bad Financial Decision.]
Get Serious About Budgeting Your Non-Vacation Expenses
The less you waste money, the more money you’ll have later for a summer vacation. So pay your bills on time (those late fees add up).
How to Plan a Vacation
Equally as important as saving for a vacation is planning one that isn’t overly expensive. So you’ll want to adopt a few strategies, including:
— Plan the vacation early.
— Use a travel agent.
— Utilize travel rewards credit cards.
— Go on a vacation — but not during the summer.
Plan the Vacation Early
That gives you more time to hunt for the best price for hotels, airfare, rental cars and so on.
Plus, keep an open mind, suggests Sahara Rose De Vore, a travel coach and consultant based out of Milwaukee.
“There are numerous ways to travel on a minimal budget, even with a family,” De Vore says.
But if you’re going to do that, she adds, you may need to cut back.
“This doesn’t mean that you need to throw all luxuries out of the window, but ask yourself what is more important for your trip,” De Vore says. “What areas can you splurge in and where can you save money? Do you need the fanciest and most expensive hotel room, or can you stay at low-cost accommodation that you find on sites like Booking.com, Agoda or Hostelworld?”
Or she says that you might want to go cheap on the transportation to get to your destination but then spend freely once you’re there. “Ask yourself, do you need to take a flight somewhere or can you spend $20 or less on a bus ride there?”
[See: 8 Money Mistakes Newlyweds Make.]
Use a Travel Agent
If a travel agent can find you steep discounts, and especially if the agent receives commissions from the airlines and hotels and not the traveler, you likely will pay less for your vacation than if you planned it yourself.
Utilize Travel Rewards Credit Cards
Jonathan Hess runs the personal finance blog Centsibly Frugal, and says that he and his wife have three Chase credit cards. “And we use all of them for their appropriate categories to maximize the benefits of each,” he says.
Hess says that they also use the Chase Ultimate Rewards portal to earn an additional 50% bonus on expenses such as flights and hotels. He says that he and his wife recently saved $200 for round-trip tickets to Canada, “just by using the cards and rewards program correctly.”
Not that Chase is the only game in town. American Express, Capital One, Bank of America and numerous other banks and financial institutions offer travel rewards credit cards.
Go on Vacation — but not During the Summer
If you’re able to go some other time, you will likely find cheaper rates when other people aren’t traveling.
Because who says a vacation needs to be in the summer? The important thing is to get away and enjoy yourself — but to do that, you don’t want to go broke midway through your trip. Saving for a vacation — and saving on a vacation — will help you enjoy it.
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5 Ways to Save for Vacation originally appeared on usnews.com
