In this post I want us to discuss the topic, how to save for a vacation on a tight budget.
It is easy to dream about visiting some of the most exotic places in the world but another thing to fulfill those dreams.
This is because nowadays money is tight. Everything appears to be going up except our salaries.
Therefore to achieve our dream holiday or vacation we need to be very strategic about it.
With just a little bit of planning and commitment, we should be able to save enough to go to some of the most beautiful places on earth.
The steps presented in this post have helped many people be able to afford some of the most expensive holiday destinations.
I, therefore, know for sure that you too will be able to do the same.
How to Save For A vacation:
Below are some tips on how to save for a dream trip or vacation.
Save for vacation apps
There are so many money-saving apps out there that have helped many people to be able to save enough money for their vacations.
Apps such as Digit can do the saving on your behalf without you even noticing it sometimes.
Digit works by analyzing your income and expenses in your checking account and then determines the amount you can save every day.
The savings are deposited into your Digit account.
Fast Company named Digit 2017’s second most innovative company in finance.
This app has helped its customers save over a billion dollars.
There are no restrictions on withdrawals from the Digit account and there are no withdrawal charges.
Your savings also earn a 1% interest which is paid automatically every three months.
Are your funds secure with Digit? Yes, they are secure as they are held at FDIC-insured banks. The insurance covers them up to a balance of $250,000.
You, however, have to be aware that while the app is free for the first 30 months you will be charged $5 service every month.
Another money app that you can use to save money for your vacation is Qapital.
With this app, you need to connect your funding account to the app and choose goals you would like to save toward.
You then apply Rules that automatically send money toward your Goals.
Just as with Digit, the money in your account is FDIC insured.
The Qapital Spending account links to the Qapital Visa Debit card and is a checking account in your name.
With this app you can, for example, tell it to round up your debit card spending to the nearest $5 and put the extra money into your savings account.
So for example, if you spend $11 dollars the app will this expense to $15 and transfers $4 into your account. You can change the rules anytime you want.
Open a separate saving account for vacations
It is good practice to open a separate travel savings account other than mixing it up with other savings.
This makes it easy to see how much you are saving and how much you still need to save.
If you mix up savings you may not be able to track your vacation savings properly.
This account can also act as a motivating factor in your efforts. Every time you access your bank accounts the name will remind you of your vacation savings goal.
I would suggest you go for a fee-free savings account.
Set aside money to be deposited into your Vacation savings account
Set up an automatic transfer of funds from your checking account to your vacation saving account.
You can determine at the outset the amount of money you can afford to transfer monthly.
This will depend on the cost of your vacation and the period you have set to raise the funding.
By setting up a Standing order you will minimize the risk that you will forget to save funds if you did it manually.
In cases where you have a tight budget do the transfer soon after you settle all your monthly bills and other important items.
If you leave all your money in the checking account it may be difficult to avoid dipping into your vacation savings during the month.
Transfer certain incomes to your travel account
I always encourage people to try to make extra income on the side. You can then use such income streams to fund your vacations.
For example, as a blogger, I can designate my AdSense revenue as “travel only” and keep it in the vacation savings account.
If you want to learn more about how you can make blogging I urge you to visit, How to start a WordPress blog on Bluehost.
I know for sure that through blogging you can make enough money to cover most vacations and if you keep it at it can replace your full-time job income.
There are also other ways you can make money such as:
As you can see there are many things you can do to be able to finance your dream vacation even if you are on a tight budget.
Create a budget and follow it
Some of us may be failing to save money for our vacations simply because we never do a household budget.
Having a budget will help you to plan your expenses properly and therefore avoid unnecessary expenses.
A budget will help you to spend only on items you only need and therefore enable you to save money for other things.
For those on a tight budget during the budgeting process, you can find areas on your budget where you can be able to make savings.
For example, you can discover that by buying things in bulk from places such as Costco Wholesalers you could be able to save money.
Money that you could not be able to save if you bought from the retailers.
It is actually surprising that people just spend money without planning in advance. That is a recipe for disaster for any individual or organization.
As an accountant, I cannot imagine a situation where a company can operate without a budget.
We live in a world with limited resources and such a situation demands that we plan and prioritize. This is where a budget comes in.
It is true for the government and organizations and it is also true for you and me.
Saving up on miles through credit card expenses
There are a few credit cards out there where you can earn miles for every dollar you spend.
I know of people who have been able to accumulate enough miles to be able to fund flight in full.
If you have no problem with managing credit cards I would urge you to apply for such cards and utilize these schemes.
However, if somehow you are not good at maintaining credit cards then do not go down this route.
You can instead use the other ways I have already mentioned in this article.
Cut your expenses
Another way to be able to save money for vacation is through going on cost-cutting exercise.
We live in a world of excess which offers an opportunity for anyone to be able to find areas where cuts can be made.
Below are some of the areas where cuts can easily be made without any undue stress on your life.
- Forgo buying lunch at work and instead bring your own lunch. Buying lunch can cost at least $5 every day to most people. By bringing your own prepared lunch you can easily save enough for a decent holiday in the Caribbean. Not only will you be able to save money but you will also end up eating a healthy lunch and even more delicious lunch. The food we eat at work cannot match the food we eat at home.
- Stop eating out. Stopping eating out for a few months won’t “kill” you at all. Therefore find other things that you can do instead of going out. You can for instance use this time to learn a new trade. You can learn to blog through the guys at Income School that may replace your full-time income in two years’ time.
- Try quitting smoking. Smoking costs at least $2,000 per year in cigarette purchases. This is enough to fund a decent holiday for your family. So for the sake of your health and family, please stop.
- Cancel some subscriptions. Review all your subscriptions and cancel all subscriptions that are not that important to you. I too recently came across some subscriptions I rarely utilize and decided to just cancel them. You too can do the same.
- Renegotiate your mobile phone contracts. There are some contracts where data bundles can be renegotiated. If that is the case this one area that you can easily cut especially if you have Wifi at home. You can browse the internet at home and not when traveling etc.
- Cancel cable tv. This is another area that we can do without if we are on a tight budget. There are so many free to air channels around that our entertainment and news channels can be taken care of fully.
I hope that you guys have learned something on how to save for vacation on a tight budget.