My friends always asked me ways you can save for a vacation when you’re on a budget. They gawked and awed when I saved up for a month-long European excursion after my senior year. The kicker? It wasn’t the first big trip I’ve saved for. There are manageable ways you can save for a vacation and I’m here to help.
The first of the ways you can save for a vacation is to have a ballpark figure of how much it’ll cost. What is the average transportation fee getting there, accommodations while there and price of entertainment? Having an idea of how much it’ll cost can help you spot outrageous prices and start saving for your trip. You can look those up online but I suggest searching various sites to make sure you cover all your bases.
You’re going to need money to travel. It’s inevitable. An interesting TED talk by Alexa von Tobel talked about personal finance and how to manage your money. She suggests 20% of your salary go to saving, 30% to personal entertainment and 50% to paying your bills. My suggestion for saving for a larger vacation is to commit to taking some money from your ‘personal entertainment’ category. You can still have fun with friends but by lowering your budget, you not only save more for your trip but come up with inventive things to do with friends. Depending on how far away the trip is, you may take only 20% of the personal entertainment funds in order to save for your trip.
3. Watch Your Wallet
I know I’m prone to just stopping to get a coffee with a friend and not counting the cost, so watching my spending was a big player for my trip fund. Try writing down all of your expenses so that you get a sense of how much you are really spending. You may begin to notice money that has slipped through the cracks without your awareness. It also gets you thinking about what you really need versus what you would simply like.
4. Out of Sight, out of Mind
I strongly suggest putting your money somewhere you won’t be tempted to touch it. Banks offer vacation saving accounts that you can open in order to start saving. The benefit of one of these accounts is that you still have access to the money but because it isn’t grouped with your total income, you don’t reason it as spendable. With your checking account more balanced, you’ll be aware of how much you really have to spend versus thinking you have more slack that you do.
Are there ways you can supplement your income before a big vacation? Sure there are! You can try to work overtime, sell things online or at a garage sale, find temporary work such as a babysitter or dog walker and cook in instead of going out. Small things like these can help even a little bit towards saving. As a high school student working and attending school, I found them useful tools to saving for my trip. College students should also check out jobs like these to help pay for your ambitious spring break plans.
In the same way deadlines help you get work done at the office, travel deadlines help give you a goal to reach for. My friend and I started talking about our trip to Europe four years before we started buying tickets and making the arrangements. By committing to the idea that we would travel in 2013, it made saving easier and more efficient than the mentality of “I want to go to Thailand someday.” It’s okay if your deadline changes based on various factors, but having some goal in mind will help you keep your eye on the prize.
7. Relative to What
You may underestimate the value saving one dollar but consider what it’s relative to. I recently stumbled upon an interesting take to saving for a big trip. The key: consider what you could be buying with that money. For example, instead of buying a bottle of wine for $38, that money can buy you a personally guided tour of Gion, a popular Geisha District in Kyoto, Japan. What’s more, the $8 you spent on coffee and a snack at Starbucks translates to one night hotel and breakfast in Kathmandu, Nepal. Knowing the weight of your dollar where you travel is key to saving. The thing is that you need to move that money into your vacation savings fund when you reason things like that so that you don’t spend it elsewhere.
Saving for a big trip doesn’t need to be black and white. In fact, it’s manageable when you look at your budget and accommodate it. What are some other ways you can save for a big vacation? What works for you?