Saving for your next vacation doesn’t need to be stressful and you surely don’t need to get into debt by putting it on a credit card and never paying it back.
Let me share with you what I’ve been doing for years that has helped me on all my big trips. This may not be the best form of saving for you but take it and make it your own.
Step 1 : Open a travel credit card
Now this is completely optional but if you travel a lot this can be a great addition with all the perks and protection they come with. Do your research, and ask your friends and colleagues if they have a preferred travel card and why. Definitely check out The Points Guy who has built a career helping travelers maximize their experience. Brian (TPG) and his team have done most of the hard work and provided a top list of travel cards and different categories to compare them.
Also, check with your bank to see if they have a travel card and if they have any promotions for you to join. I personally went with the Capital One VentureOne card so I could do the following:
Step 2: Open a free Checking Account aka “Travel Account”
Opening up a checking account just for your travel fund may seem weird but it helps to keep your normal checking and savings accounts separate.
After opening my Capital One VentureOne credit card I looked into their “360 Checking” account, which is a great option since it’s completely free and doesn’t have minimums or fees.
Step 3: Create your budget
You’ve got your travel account, now it’s time to save some money. If you don’t have your next trip in mind, that’s fine start with figuring out how much money you can comfortably set aside from each paycheck. Some employers give you the option to split your check deposit into multiple accounts so it’s out of sight, out of mind. Continue to save money until you have a trip to plan.
With a destination in mind, you’ll be able to figure out how much money you need to save and budget for. I personally like to plan a bigger well rounded trip from the beginning and cut things out later that just won’t fit the budget. Start by researching the following.
- Transportation: Round trip flights, taxis, car share, train rides, etc. However, you plan to get to your destination and explore it.
- Accommodations: Price out three tiers of places to stay. Luxury, Moderate, and Budget. If you plan on only using a room for sleep and spend most of your time exploring you might find more value in selecting a budget or moderate accommodation.
- Food and Beverage: If you’re a big foodie and your trips revolve around eating all the stuff, you may want to give yourself a bigger spending amount in this category. If you just need substance to keep you going, setting a daily food budget may work best.
- Attractions & Activities: Make 3 lists; Have to do, would like to do, and if budget permits.
- Spending Money: For souvenirs and random things that pop up. I suggest adding a cushion in this category. It’s always good to be prepared with extra funds in case something happens, like your luggage breaking and needing to buy a new one.
You have now created your budget! After saving all the money you’ll need in your “Travel Savings Account“, you can purchase everything with your travel credit card and pay that off immediately with the savings account.
Step 4: Book and enjoy your trip
Go have fun, you deserve it! You worked hard to save and budget for this trip, now get out there and adventure!
— Where are you planning on going next? —