Summer vacation might feel like a long way away, but setting up a savings strategy now can help you cover the costs of that upcoming getaway with less stress.
It can be tricky to put together a travel budget for a vacation so far in the future, so start researching hotel early bird specials and using websites such as Kayak or Priceline to get a ballpark estimate for your flight costs this summer. When you have a budget range to work with, use these seven tips to start saving for your big summer vacation:
1. Set up a separate savings account. Find out if your bank can set up a separate savings account under your main account so you can organize your funds with ease. Setting up a separate savings account specifically for your summer vacation will help you keep better track of your money and focus on making that account grow. Review the account regularly to keep yourself motivated and on track with your savings plan.
2. Make weekly, not monthly, contributions. Even if you prefer a monthly budget to organize your income and expenses, consider setting up a separate running category where you can make weekly contributions for your summer vacation fund. Making a habit of depositing money into your summer vacation fund every week – instead of every month – can help you make saving money for a specific goal a higher priority in your life. Whether this happens in the form of writing yourself a check and going to the bank to make the deposit, or simply transferring funds between accounts on a weekly basis, add it to your calendar so you don’t miss out on the opportunity to build up that savings account.
3. Scale back leisurely expenses for at least three months. Commit to cutting back on extras for at least 90 days so you can free up more money for that vacation. Take a closer look at your spending habits, and consider how much you are spending on eating out, entertainment or even last-minute trips. Put yourself in a mindset of limiting extra expenses so you can maximize your budget.
4. Prepare your own food. Dining out regularly can put a dent in your budget, but you can pare down those food costs by making most of your meals at home. According to a 2012 Harris Interactive poll, seven in 10 Americans say they save money by cooking meals at home instead of heading to their favorite restaurant. Scaling back on dining out – even for just a few months – could help you save a significant amount of money that you can put toward those summer travel funds.
5. Plan a week’s worth of spending. How many last-minute purchases do you make only to find out later that you could have saved money if you had planned ahead? Whether it’s buying things without comparing prices online or shopping on a whim, now is a great time to change your shopping habits so you can keep costs down over the next few months. Get into a habit of making lists of purchases you anticipate needing for the upcoming week so you know how much you will spend by week’s end. This can help you prioritize purchases and make it easier to stay within your budget.
6. Sell something specifically for your travel funds. Do some spring cleaning to liquidate a few items, and use that cash to make bigger deposits toward your savings fund. Sell items on eBay, Craigslist or use Facebook Marketplace to sell items to friends. Just make sure to use all proceeds from that sale for your travel savings account.
7. Make use of savings and budget apps. If you have a hard time tracking daily expenditures or just can’t seem to keep track of your savings goals, use apps such as SmartyPig, Mint.com’s budget app and similar mobile apps to manage your budget and cash flow with ease. Entering your expenditures and savings contributions in real time can make it much easier to set and achieve your financial goals, and it might even increase awareness of your spending habits.