March 12, 2021
If you have wanderlust and you’re planning a dream vacation in your mind, it’s time to turn that dream into reality. But first, you have to start saving. Figuring out how to save money for travel ultimately comes down to six easy steps:
- Determine your travel goals
- Assess your current spending plan
- Cut out small daily expenses
- Make extra money
- Designate a separate savings account
- Plan to travel on a budget
Like any savings goal, it requires discipline and commitment. But with the right advice and accounts at your disposal, you can afford to splurge on your next trip.
6 Steps on How to Save Money for Travel
To help you reach your goal of getting away, we’ll explain each step and set you up for success. Let’s start at the beginning.
1. Determine Your Travel Goals & Budget
Any goal needs to be specific, and travel goals are no different. Before looking at the numbers, take some time to map out what kind of trip you want. Some questions to ask before you save money for travel include:
- Where you want to travel
- How you will get there
- How long your trip will be
- The sightseeing you want to do
- How many people will be going
Once you have that information, start looking up approximate costs for major items such as accommodation, transportation, food for the entire trip, tickets for tourist attractions or tours, and souvenirs. Places to look at include online travel forums and airline companies.
When determining those costs it’s better to overestimate a bit instead of underestimating. Your next step is to look at when you plan on going on your trip. That’s how long you’ll have to save for your upcoming trip. Here’s where it helps to break down your overall goal into smaller chunks. For example, you’re planning on flying to Mexico and determined you’ll need $1,500 in six months. This means you should aim to save at least $250 a month, or around $62.50 per week.
2. Assess Your Current Spending Plan
Before making changes to your current budget, take a look at what you’re already spending. That way, you can assess what you can cut out (either permanently or temporarily) from your budget.
Grab your bank and credit card statements and organize each transaction into categories. You can go as far as separating them into “needs” and “wants.” Then assess what you can eliminate, reduce, or leave the same. For instance, it’s not possible to change the amount you pay for rent, but you can reduce the amount you spend on restaurants.
When you do spend money, consider using travel rewards credit card. These cards allow you to earn perks like airline miles when you spend. So if you’re making essential purchases, you can use your travel card and earn while spending. Those miles could help you cover a portion of your flight.
3. Designate a Separate Savings Account
When looking at how to save money for travel, one of the best ways to save is to actually separate your money.
Separating the money you’re saving for your trip from your regular checking or savings account is useful because you won’t be tempted to spend it (even by accident). It also helps keep you focused since you can see your progress.
4. Cut Out Small Daily Expenses
Go ahead and take a look at your list of “wants” or discretionary expenses and see if there’s any way to cut back. Perhaps you’re currently subscribed to multiple streaming services — can you cut back on a couple of them temporarily until you reach your savings goal? Or can you cook more at home and cut back on takeout for the time being?
Even if they’re small expenses, cutting back on multiple ones can add up. Other considerations include negotiating down your bills — many internet and mobile companies are happy to work with you to keep you as a customer. Taking the 15 minutes to call places like your auto insurance company can save you hundreds of dollars.
5. Make Extra Money
If it’s not possible to cut back on your budget anymore or you want to accelerate your goal when saving money for travel, consider taking on extra shifts at your job or a side hustle.
Working a few extra hours per week can go a long way to help you towards your travel fund, and you don’t need to work these extra hours forever. Some ideas on what you can do include tutoring, dog walking, or being a rideshare driver.
6. Plan to Travel on a Budget
While you’re planning your trip consider some of the following ways to travel more affordably:
- Travel during off-peak periods: Booking your trip outside of busy times can save you big bucks. Another advantage is that there may be fewer crowds, and tourist attractions may also offer discounts. If you have some flexibility, check to see how much you can save compared to traveling during peak periods.
- Use public transportation: Taxis and renting a car is usually the more expensive option compared to taking the bus, metro, or train. In many cases, buying a public transit pass or multiple tickets at once can net even greater savings.
- Purchase package deals: Let’s say you’re interested in visiting a bunch of museums on your trip. Some cities offer passes that group multiple tourist attractions together for a better price than if you were to purchase tickets separately.
- Assemble your own meals: Even if you don’t want to cook on your trip, going to the local grocery store can yield some foodie treasures. Many will have sections of pre-packed meals like sandwiches, and you can grab some drinks, fruit, and other snacks for a well-rounded meal. If it’s a nice day, throw down a blanket and have a picnic.
Other Ways to Afford to Travel
Some trips are simply too expensive to save up for. If you’re planning a vacation that reaches beyond your savings goals, there are other ways to cover the costs.
Many financial institutions offer personal loans specifically designed to finance travel expenses. If you can find a lender that offers a low-interest rate, you can finance a portion of your trip affordably.
Saving money for your next trip can feel overwhelming. But when you break down your goal, get specific about what you’re saving for, and find multiple ways of how to save money for travel, you could be surprised at what you can accomplish.
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