Dreaming of vacation and wondering how to save money for travel? We’ve got you covered. In this post you’ll find very practical tips that will get you one step closer to catching that plane!
It can be very disheartening to see your friends posting seemingly endless vacation photos on social media, enjoying incredible beaches, exotic cocktails and days under the sun while you’re in an office cubicle or looking out of your bedroom window wondering if you’ll be able to make rent.
But saving money for travel is possible, with careful budgeting and a few sacrifices. Because, as meaningful and life-affirming a travel experience may be, it can also be quite expensive.
Here you’ll find all the different ways in which you can save some extra money for vacation, and in no time you’ll be the one posting photos and inspiring others. Let’s find out how to save money for travel!
1. Set a Financial Goal
If you’re going to save money to travel, it’s important to start with your final destination. You may have some notion of where you want to go – touring the Greek islands, beach holidays in the Caribbean, a capital city tour of Europe…the list goes on and on, and the amount you’ll need to save for travel will depend on that, as well as on the lenght of your trip: are you going on a weekend getaway or planning a vacation of 6 months?
Choose your target destination and create a goal dollar amount toward which you will build your savings pot. The amount of money is irrelevant, just as long as it’s realistic. Don’t bank on two weeks at a five-star resort in the Bahamas if it’s going to take you 20 years to save all the money for that.
Take into consideration at least all of the following expenses. For some of these things you will have to guess roughly, but with a little research you can get accurate estimates.
- Return flights
- Food and Drink
- Transport around your destination – taxis, shuttle buses, etc.
- Tips (depending on the country)
A good way to get a more accurate handle on how much your vacation is likely to cost is to use package deals from travel agencies that include many of the above elements within a single price. That greatly simplifies things, and just leaves a few additional sundries for you to consider.
2. Track your Expenses
If you really want to know how to save money for traveling, you first need to learn about your own expenses. If you are someone who keeps an accurate track of where their money is going, then this will be easy for you. If you’ve never tracked your outgoings before, then you’ll have to start now and it might take you 2-3 months to get a clear picture of where your money is going every month.
There are apps for your smartphone or tablet that can help you with this process, of course, but you needn’t go further than simply noting your expenses down in a notebook if that’s what you prefer. What’s important is knowing where your money is going, so you can cut unnecessary expenses and redirect them toward your savings plan.
Digital payments through Apple Pay and phone/online banking make tracking expenses a lot easier because you can typically find records of all your expenses over the past few months. If you’re still using cash, however, remember to always write down what you spend; it’s key to help you save money for travel.
Tracking your expenses is a fascinating thing to do, whatever your end goal or purpose for doing so. If you were to ask random people where they think they spend their money and then show them the real data, surprise and shock would reign supreme. There are some things people don’t realize just how much of a drain they are until they have a monthly budget.
If you’re a smoker, a social drinker, enjoy dining out, you are a serial subscriber to multiple streaming and online services, or a gambler, it’s hard for you to imagine or appreciate just how much of your money is disappearing on your pursuits of recreation and pleasure.
The average pack of 20 cigarettes cost $6.28 according to the National Cancer Institute. If you smoke a pack a day, that’s $188.40 a month, or $2260.80 a year. There’s a big part of your vacation pot right there, if not all of it.
3. Make a Budget and Reduce Your Expenses
Once you can get the full picture of your monthly expenses, you can see where cuts and economies can be made. Sometimes, the shock factor of seeing those numbers in black and white is all people need to start reducing unnecessary expenses.
Your budgeting needs to be quite strict if you want to start saving money to travel the world, which is pure expense with no financial return (unless you start a business related to it by opening a travel blog or becoming a travel content creator) . Start by ring-fencing the things that you know you will have to spend on, regardless:
- Rent or mortgage payments
- Debt repayments
- Utility bills
- Medical expenses
- Transportation and fuel
- Family expenses – kids’ needs, etc.
These are expenses that are either difficult or impossible to cut, but savings can be made in these areas too with the right approach. For example, you can cut down on energy bills by using power-saving appliances and light bulbs.
Once you’ve set aside what you need for these expenses, then you’ll need to look at other areas. If you want to start saving, then you need a budget that cuts back on your other outgoings: media subscriptions, dining out, drinking, smoking and other things. If there are things you can cut out altogether and go cold turkey, that’s great, but always stay realistic.
If you can cut back on overall unnecessary spending by 20 percent or so, you will stand a good chance of finishing each month with a good amount of money to put toward that travel fund.
4. Save, Save, Save
With your budget in place, the time comes to start saving at every corner. A budget is a plan, but never be afraid to deviate from the plan somewhat if it means you’re saving more money overall. If you find other areas in which you can save, then do so; if you overestimated how much you needed for a certain thing, don’t just spend the difference to prove yourself correct. This is smart personal financial planning we’re doing, not wasteful and cynical government spending.
When looking at ways you can save money, divide your methods into “Immediate” or “Short Term” savings that you can do straight away, and others that may take more time to accumulate because savings will come in smaller increments or it may just take longer to make the changes needed to generate savings.
In your “Immediate” column, you could put things like:
- Cancelling streaming subscriptions
- Cutting back on or quitting smoking
- Cooking meals at home
- Switching groceries to generic store brands
- Cutting back on visits to bars or clubs – e.g., one weekend a month
All of these things and more will generate immediate savings and free up money that you pour into your vacation fund. There are also things you’ll have to think about in the longer term, such as:
- Cutting down on utility costs – can take time to build up significant savings
- Using the car less and saving on gas
- Depositing money in a high-interest savings account
These measures and others will generate savings eventually, it’s just that you won’t notice the difference straight away. Every little helps, however, and when you make small savings in many areas, it soon builds up into something quite meaningful; that’s how you save money to travel.
5. Sell Things You Don’t Need Anymore
Many of us have things around our homes that we just don’t use anymore. It could be a games console, an old laptop, books that we’ve long since read and are now just taking up space, kitchen appliances we used once and then never again. Catalog these items around your home, photograph them and then put them online to sell either to friends and family or to others in your community.
You’ll be surprised how much you can generate by selling superfluous items. The added benefit of doing this, of course, is that you also free up additional space in your home. Decluttering is very therapeutic and can really enhance your living space. What’s more, you’ll feel less wasteful allowing things that you have no need for to go to other people who can use, enjoy and appreciate these things. The best part, of course, is that the declutter comes with a lot of money you’ll be saving for that trip!
6. Get a Second Job
If you want to save for a vacation but are already on a tight budget, a good way to accelerate the generating of your savings is getting a part-time occupation. You needn’t do any more or less than your time and energy allow, but the information age has made it more possible than ever to hold down additional employment.
Gone are the days when a second job meant working a night shift in a convenience store or pulling weekend tips in a bar or restaurant. You can now make money at home and through the Internet. You could become a freelance writer, penning a handful of articles a month to make $100-200. Apply that over a whole year and you’ve earned an additional $1200-2400 to save for travel.
Other options include editing, audio transcription, language tutoring, babysitting, teaching various skills online, dog walking, and many more. Not all of them mean working at home, but all of these ideas are flexible and easygoing, and ones for which you can rely on your current skill level and knowledge to do.
7. Start a Business
Another way to boost your income is to start a small business that can keep generating income even while you’re on vacation. This kind of passive income will greatly help offset vacation expenses. Using your existing knowledge and skills, you could do something like affiliate marketing, where links to various products and other websites on your own blog or web page lead to sales, a small percentage of which you will receive as commission.
Such businesses can generate anything from $50 a month to something far more substantial, even in the thousands of dollars you’ll get to save for a vacation. You could also sell T-shirt designs online, sell your writing or editing skills, and much more. It could eventually even turn into your main source of income, after which you’d be much freer to spend time at home with family, or even go on more trips.
8. Keep Travel Money in a Separate Account
Finally, there’s the question of where to keep this vacation fund. Options range from shoving small bills and coins that you save into an old coffee tin that you hide in a cupboard, all the way up to a high-interest savings account. We suggest the latter.
There’s no reason you can’t further enhance your budget by letting your savings work for you a little. In a high-interest account, even over a year, you can see limited results, but if you build it into a bigger fund that you feed continuously you can see nice additions from compound interest. It’s true that only through larger amounts will it really mean anything, but if you turn this vacation fund creation into a lifetime habit, then your money can start to work for you and you would have found how to save money for a trip effectively, getting to travel more often.
Saving money for traveling, or for any other purpose really, means making many small savings over a decent period of time. It won’t come all in one big lump sum, but through the combined efforts of savings across your entire financial spectrum in life. To look at individual savings and think of them as meaningless is wrong-headed. What you need to be able to see is how each small saving joins together to feed the whole. Whether you want to save for a trip to Europe or a staycation in the neighborhood, it starts with one single coin.
Start saving now and you could be enjoying that vacation in less time than you think!
Save Money for Travel FAQ
Travel budget can be as little as a few hundred dollars for a weekend escape, or several thousands for a trip abroad. It depends on the type of travel (luxurious, on a budget, backpacking) and destination you choose. You should think of where you want to go and find out airfare, accommodation and insurance prices, as well as sightseeing, transportation and food costs to have an idea of how much you should save up for your trip.