You can avoid vacation debt with a few budgeting tricks. You’ve worked hard and as a reward you want to travel and maybe take a trip or two this year, but you don’t want to deal with any post-vacation debt. (Smart.) Don’t end up like so many other travellers who are still paying for trips they have taken years ago. You want to save money for travel, and the trick to saving is establishing a vacation goal and savings plan.
How to take a vacation without going into debt
A vacation is a goal. It gives you something specific to plan and save for—an incentive, a purpose. And taking a vacation is important. It helps reduce stress, gives you a mental break for your everyday obligations, and it allows you to spend quality time with family, friends, and potentially meet new friends along the way. So here are my steps on how to save your money for your next getaway and achieve your financial goal.
Do your homework and research all of your vacation costs
Determine the kind of vacation you want and what it will cost you. It’s important to be realistic when it comes to how much you can afford to spend on your vacation. If you set an unrealistic savings goal, you’ll be disappointed when you can’t achieve it. You want to be successful. Also be realistic when figuring out how much money you’ll need in your vacation budget. Include all of your travel expenses, including tips, cab rides, bus fares, exchange rates, etc. This will make it easier establishing your vacation savings plan and achieving your vacation goal.
Write down your vacation financial goal to determine your savings schedule
Putting your vacation savings down in writing makes it more real. Start by writing down the total amount of money you’ll need and the date you will need it by, then work backwards. Figure out how much money you’ll need to save every week between now and that date to achieve your vacation goal. Download our free Money Management & Budgeting booklet. Inside is our Financial Goals Worksheet which you can do to set up and organize your financial goals easily.
Add your vacation fund to your monthly budget
Once you’ve established your vacation fund it’s important you add it to your Monthly Budget. Don’t have a monthly budget? No worries! Download our free Budget Planner and you can manage all of your monthly expenses and see exactly how much of your disposable income is going towards different expenses. The best part is that you can make adjustments to your budget, cut costs and increase savings once you know where your money is going.
Open a separate savings account and watch the balance grow
If savings isn’t your forte set up an account and DON’T attach it to your debit card. This way you’re not tempted to use your travel funds when you’re out shopping. When my sister Judi was younger and wanted to save for a specific item, she opened a joint account with our Mum and set it up so that a withdrawal required both of their signatures. She told Mum not to sign a withdrawal request unless it was for her goal item – her wedding dress. Judi regularly (sometimes begrudgingly) put funds into this account and didn’t make a withdrawal until she paid for her wedding dress.
Set up an automatic deposit for your vacation savings
You can also arrange for an automatic deposit to go into your travel account each and every payday. Most people don’t miss the funds if they don’t see the money in their account in the first place. Automatic savings makes saving for your financial goals easy, effortless, and painless.
Tell somebody about your vacation goals
It’s helpful to tell someone about your vacation goal to make you more accountable. We all want to be successful, especially in front of others, and that person can encourage you to keep going when you may be tempted to give up.
Start a travel savings jar to avoid debt
Another way you can help save money for your next vacation is by throwing all your coins into a jar at the end of the day. These funds can then be transferred to your vacation savings account.
Track the money gobblers in your life
How much are you spending on your daily tea or coffee? Do you withdraw funds from another bank’s ATM? Just one of those withdrawals could cost you $6. Look at the various ways your money is being gobbled up dollar by dollar. Our free Monthly Spending Tracker can help you identify those small expenses gobbling up your trip fund.
Non-profit credit counselling can help you achieve your vacation goals
These 8 easy steps offer you ways on how to save money for a trip. Start now and I wish you bon voyage when you’ve achieved your vacation goal without going into post-vacation debt. If you need help putting together a budget or if you are dealing with debt that makes it impossible for you to save for your other financial goals, give us a call at 1.800.267.2272.
We offer free, one-on-one counselling sessions with certified Credit Counsellors who can go through your monthly expenses with you, as well as any debt you have, and provide you with all of your options for achieving your financial goals whatever they may be, whether it's becoming debt-free, saving for a vacation, or both!
Vacation Savings Resources: