Here's How To Save for Vacation All Year Without Feeling Broke
Vacation sounds amazing, until you look at your bank account and it looks back at you with sad, empty eyes, reminding you why the 9-to-5 grind has become a 24/7 reality. At this point, taking a vacation may seem like a luxury, but the truth is, this type of self-care could still be an achievable financial goal.
Yes, it’s going to take some serious effort and money. In fact, Yahoo! Travel reported that Americans can expect to spend $3,940 on average for summer travel. So is there any way you can plan for this, or better yet, save to go on the trip of your dreams in the future?
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That's the question Kumiko Love, an accredited financial counselor, national best-selling author and founder of The Budget Mom, helped answer for us. She has some clever ideas for how you can save money throughout the year for your next vacation.
How Sinking Funds Can Set You Up for Success
To help you stay intentional about saving for your next vacation, Love suggests starting a vacation sinking fund. What does this mean? Instead of scrounging for money when you get the travel bug, make saving for it part of your everyday life.
"Think of it like paying your future self first," she said. "Every paycheck, I move a small, realistic amount into a separate savings account labeled 'vacation fund.' When you name your money, you're less likely to spend it on something else."
If you want to grow your vacation fund more quickly, you could redirect more money from your wants pile to your savings pile. For example, instead of buying concert tickets for next Friday, put that $150 toward your trip in three months.
"You're not removing enjoyment -- you're trading short-term comfort for a long-term memory," Love said. "You can even use tools like automatic transfers or round-up apps to make saving effortless."
Embrace Small Yet Consistent Actions
What if your goal is to save $1,200 for a trip within a year? That seems like a lot of money. But before you get discouraged, Love invites you to break down the numbers. Simply put, to save for your trip, you just need to set aside $100 a month or $25 a week.
"Suddenly, the dream doesn't feel so far away," she said. "Create a system that works with your habits, not against them."
Here are a few of Love’s suggestions to try:
The Cash Envelope Hack: If you still use cash for certain categories, like groceries or coffee, tuck leftover change or bills into a 'vacation' envelope at the end of each week.
Paycheck Rituals: Every payday, transfer a fixed amount into your vacation fund before paying bills. Treat it as a nonnegotiable bill to your future joy.
Mini Challenges: Try a no-spend weekend once a month or even take on a 52-week challenge that involves saving an increasing dollar amount each week (for example, $1 in week one, $2 in week two, and so on).
Smart Vacation Planning Can Also Help You Save
Though it's tempting to believe that only those exclusive (translation: expensive) vacation packages promoted by social media influencers are worthwhile, Love knows her way around planning a fantastic experience with a more budget-friendly itinerary.
Love has some tried-and-true tips for planning a cost-conscious vacation:
Travel Off-Peak: Avoid popular travel seasons. For instance, traveling in the shoulder season -- right before or after peak -- can save hundreds on flights and hotels.
Use Rewards Strategically: If you use a travel rewards credit card, such as the Capital One Venture, you can redeem miles to cover flights or even hotel stays. That's how my family travels to Arizona every October without going into debt.
All-Inclusive or Repeat Trips: Reuse your past budgets if you go to the same destination. Knowing what you spent helps you plan accurately for next time. For my family, going to the same resort in Mexico each year has helped us fine-tune our budget and avoid surprises.
In other words, focus on experiences, not extravagances. "You don't need five-star everything to make a trip unforgettable," she said. "Vacations are best when they don't come home on a credit card. There's nothing relaxing about trying to recover financially from something that was supposed to bring you joy."
Final Words of Wisdom
The bottom line is that Love just wants you to be intentional.
"I've learned that the best vacations aren't defined by where you go or how luxurious they are -- they're defined by the peace you feel while you're there," she said. "Every time you set money aside, you're not just saving for a trip -- you're building confidence, self-trust and proof that you can follow through on your goals."
Laura Bogart contributed to the reporting for this article.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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