Everyone fantasizes about their dream vacation. However, few people do anything to make their dream vacation a reality.
In fact, in just the past year alone, Americans let 768 million vacation days go to waste. And, 55 percent of Americans did not use all of their paid time off.
While there are a lot of reasons that Americans don't take advantage of their vacation time, one of the main reasons is that many Americans feel like they don't have enough money to pull off their dream vacation.
So, if you want to go on your dream vacation, you need to start saving money now.
How do you do it?
Check out this guide to learn how to save for a vacation.
- Set a Budget
First things first, you need to set a budget for your trip so you know just how much money you need to save.
Now, here's where you need to define exactly what you want your “dream vacation” to entail. If you're all about staying in fancy hotels and eating the finest meals, then you're going to need to start saving early and saving a lot.
However, if you're willing to be a budget traveler, then start thinking about ways you can cut down the cost of your trip.
For starters, you can swap fancy hotels for hostels or rooms in Airbnbs. You can also look into volunteering for part of the time on your trip in exchange for free meals and accommodation.
And, if you're not set on a specific destination, consider traveling to places that have a lower cost of living, such as Central America or Southeast Asia. With this in mind, the Philippines could be the destination for you, so you may want to take a look at these Palawan tour packages and escape to the islands and beaches of Palawan!
- Set Up a Vacation Fund
By setting up a vacation fund, it'll be a lot easier to stay on track with your goals.
Make a deal with yourself that you won't touch this fund at all until it's time for your trip (save for buying flights and booking accommodation).
When it comes to contributing to your fund, we suggest either choosing a set amount to contribute each week (say, $100), or choosing a percentage of your paycheck to contribute to the fund.
No matter what method you choose, you should set it up as an automatic transfer into your vacation savings account. This way, the money gets put away without you having to think about it, and it won't stay in your checking account where you'll be tempted to use it.
- Add Some Income and Cut Some Expenses
When it comes to saving for a dream vacation, one of the best things to do is to supplement your income while at the same time cutting down on extra expenses.
Even just a few dollars here and there can really add up. Here are a few things you can do to cut down on your expenses:
- Cancel your gym membership and opt for at-home workouts/running outside.
- Cancel Netflix and any other subscription-based services, or join on your family's account to trim the cost
- Make coffee at home instead of going to Starbucks
- Cook dinner instead of eating out
- Have game nights or fun nights in instead of hitting the bars
- Turn off the AC, unplug electronic devices when not in use, and keep extra lights off in order to cut down on your utility bill
- Every time you want to buy something “extra” such as a coffee, a new blouse, or a concert ticket, remind yourself that that's money that could go towards your vacation
- Trim your grocery budget by using coupons, avoiding prepared foods, buying off-brand, and buying in bulk when appropriate
In addition to cutting down on your expenses, here are some things you can do to add some extra income each month:
- Pick up a part-time job at a clothing store or restaurant
- Participate in focus groups/research studies for extra cash
- Sell your things on eBay, Etsy, or Amazon
- Sign up for gigging apps like Uber, Lyft, or Task Rabbit
- Start a side hustle like blogging, affiliate marketing, sports betting, or babysitting
- Rent out a spare bedroom or rent out extra space on Airbnb
- Hold a yard sale
- If it's around a holiday season, pick up a seasonal job
- Get a Travel Rewards Credit Card
If you have a solid credit score and the discipline to pay off your credit in full each month, then it's a good idea to sign up for a travel rewards credit card.
While signing up for this type of credit card won't single-handedly pay for your trip, it can significantly reduce the cost of it.
Basically, these cards work by giving you points or miles for every purchase you make with them.
The points can later be redeemed for future travel expenses. And, depending on the type of card you get, you may be able to earn more points for travel-related expenses such as flights, hotel rooms, and purchases made in other countries.
- Set Aside Your Tax Refund
If you'll be getting a tax refund this year, resist the temptation to blow that money on new clothes or new products.
Instead, set as much money aside as possible for your vacation fund.
Although it can be tough to set this extra money aside, just think- you'll still be using the money for something fun, just not right away.
How to Save for a Vacation: Are You Ready to Save Big?
Now that you know how to save for a vacation, it's time to start putting these tips into action and start saving for your dream vacation.
Before you know it, you'll have enough money set aside and soon you'll be embarking on your trip.
If you liked this blog post, be sure to check back in with our blog for more money-saving tips and tricks.