Saving for a summer vacation and planning for it often takes a lot longer than going on the actual vacation. But all the time and money you sink into a vacation is usually well worth it. If you’re looking for ways to save and plan for a summer vacation, or any vacation for that matter, and you’d like to not have to take out loans to do it, here are some strategies you may want to try.
Some of these ideas are pretty obvious because, really, saving for a vacation isn’t exactly difficult. We all know what needs to be done and essentially how to do it. Still, there are probably some ideas here that may have not been in your vacation planning wheelhouse. In any case, if you want some ideas and motivation to save for a vacation, this is what needs to be done.
— Budget for your vacation early.
— Utilize cash back rewards credit cards.
— Earn extra money to pay for the vacation.
— Start cutting back on expenses — and put them toward your vacation.
— Get serious about budgeting your nonvacation expenses.
— Go on a “money hunt.”
— When you spend for your vacation, do it strategically.
And after you’re confident you’re going to have the money for the vacation, you’ll want to start planning for it — because an ill-planned vacation is likely going to cost more than a trip in which you’ve anticipated possible problems. You’ll also find some tips for planning a vacation below.
Budget for Your Vacation Early
If you know where you’re going on your vacation, start working out how much it will cost. If you don’t know where you’ll wind up, then at least make a guess as to how much you’ll spend.
If you’re planning a trip that’s more than a year or so out, you could create what’s often called a sinking fund. If you think your vacation will cost $4,000, you’d put away $333 every month in an account; after a year, you’d nearly have the whole thing saved up. If you did a sinking fund every year, you’d have your vacation paid for every year.
Kelly Johnson, who has been to more than 40 countries and who runs the travel blog, “Snap Travel Magic,” suggests taking advantage of high-yield savings accounts, one of the bright spots of higher interest rates.
“Put 5% of each paycheck directly into the account,” Johnson says.
For some people, 5% of every paycheck may be unrealistic, but her point remains on target: Put money into a travel account every paycheck or every month, and soon, you’ll have money to travel.
Use Cash Back Rewards Credit Cards
“Many credit cards offer sign up bonuses in which you can earn free cash back, extra airline miles and travel points for spending a certain amount of money within the first few months of account opening which you can use to cover a big portion of your travel expenses,” says Andrea Woroch, a U.S. News contributor and shopping consultant based out of Bakersfield, California.
[Read: Best Credit Cards.]
“For example, the Disney Premier Visa Card from Chase offers a $300 bonus when you spend $1,000 within the first three months from account opening which can be used toward a trip to Disney,” Woroch says.
Not a Disney fan — or you like the movies and its streaming channel, but you’d rather go somewhere else? If that’s the case, Woroch suggests looking into a flat rate cash back card that offers a percentage of money back on every purchase. She particularly likes the Bread Cashback American Express card, which offers an unlimited 2% back on every purchase with no spending limit.
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 another common sense strategy, 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: Inside the Psychology of Overspending and How to Stop.]
Get Serious About Budgeting Your Nonvacation 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). Don’t impulse shop. Comparison shop when you’re going to make a big purchase. Use coupons. You know the drill. Better money habits can lead to better spending, which can lead to having extra money for things like a vacation.
Go on a Money Hunt
If you ever need to look for money, you’d want Ana Salazar by your side. She oversees the “Goals Coach” program at U.S. Bank. She suggests that looking for money that you already have but have forgotten about could lead to raising some extra cash for a vacation.
“Money hides in places outside your bank account,” Salazar says, and suggests searching for money in the following areas:
— “Payment sites like PayPal or Venmo,” she says. You may just have some money sitting in your Venmo account.
— “Return items you have been meaning to return,” Salazar says. Suddenly you have $30 in your pocket, now that you’ve returned that shirt that was too small. (You really should have tried it on in the dressing room.)
— “Credit card points you can convert to cash,” she says. Your credit card points may be just sitting there, waiting to be used.
— “Gift cards or store cards at the bottom of a drawer or purse.” You’ve probably got some, somewhere. You could sell them or use them toward the vacation fund.
— “Unclaimed property. Visit unclaimed.org to find your state’s website.” Salazar is right. That can be a treasure trove, of unclaimed insurance money, unclaimed money from abandoned bank accounts and all sorts of places.
— “Loose coins or bills in your home or car.” The classic search for coins in the sofa. We’re all carrying less cash than we used to, but still, go on a search and something may turn up.
That last one is a classic. But Salazar has a point. If you search around for nooks and crannies in your life for extra cash, you just might find some.
Spend Strategically for Your Vacation
You may save more money and spend less on vacation necessities if you’re strategic about how you purchase some of the big-ticket items for your vacation.
Woroch suggests using cash-back portals when making vacation purchases.
“Any time you’re booking a flight, car rental or hotel online, earn more cash back by clicking through a cash-back portal like CouponCabin.com,” Woroch says. “Since your various travel expenses can amount to hundreds or possibly thousands of dollars, any cash back percent can add up quickly and give your travel budget a nice little boost.”
She also suggests that you shop through your warehouse club travel portal if you belong to one. If you aren’t a member, Woroch says that signing up to become a member can be worth it.
“Through a Sam’s Club and Costco membership, you can access exclusive savings on vacation packages, rental cars, hotel stays and even theme park passes,” Woroch says. “While the savings will vary from day to day, you can find 20% to 30% off car rentals, hotels and more. I recently booked a hotel in Kauai and we got approximately $300 off the room rate, resort fee of $35 per day waived, a bundled car for $30 per day — the going rate for the brand was $140 per day — and a $230 Costco cash card that we used on the island to buy groceries and sunscreen.”
[READ: 30 of the World’s Best Places to Visit]
Tips for Planning 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 and/or general travel rewards programs.
— 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?”
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.
Use Travel Rewards Credit Cards
Yes, we mentioned travel rewards earlier, but they can be pretty handy for both saving for and planning for a vacation. American Express, Capital One, Chase, Bank of America and numerous other banks and financial institutions offer travel rewards credit cards.
If you know what travel rewards your credit cards offer — maybe you’ll get some free checked luggage when you fly or access to an airport lounge — you’ll have a better sense of how much you’re going to spend on the trip. You also could use your credit card’s concierge service, if it has one, to help you line up tours or get tickets to various events. These concierge services tend to be free. After all, if you’re going to pay for some expensive Broadway tickets, for instance, the least your credit card can do is to help you get those tickets.
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. For some people, like parents with young kids, the summer may be your only option. But if you can swing a vacation in the off season, you’ll likely save quite a bit more and deal with fewer crowds.
Whenever you go, though, the main thing is to focus on saving and planning for your vacation. Being prepared will lessen the odds of you going broke midway through your trip or finding yourself frazzled because you didn’t realize a museum you wanted to see would be closed. The more work you put into your vacation before you go, the more relaxed the actual vacation will be. At least, that’s the theory.
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7 Ways to Save for a Vacation and Tips for Planning originally appeared on usnews.com
Update 05/10/23: This story was published at a previous date and has been updated with new information.
