How to Save for a Vacation



Credit: Africa

Vacation: “a respite or a time of respite from something,” “a scheduled period during which activity is suspended,” “a period of exemption from work granted to an employee,” or perhaps “a period spent away from home or business in travel or recreation.” Whichever definition is closest to your ideal vacation is up to you, but most days, I’d take any or all of the above. Financially planning for a vacation is crucial because it can allow you to take more exotic trips to new spots further away from home, and more importantly, it prevents you from being financially crippled the rest of the year as the result of a really lavish weekend. So without further ado, here are a few practical and even a few unusual ways to save for a vacation:

• Try estimating your needed vacation savings with a spending plan. How much will those plane tickets, tee times, and spa treatments cost? If you know how much you need to save, you will be able to make the necessary financial sacrifices now to enjoy the vacation experiences later. By planning in advance, you have the joy of getting to look forward to your vacation and the satisfaction of knowing you will have the money.
• One of my family members saves up for vacation by taking a little money out of each paycheck and putting it aside in a vacation fund. This has always been a successful strategy for him, and you can do the same thing by doing something as simple as sticking cash in a special envelope or doing something as complicated as setting up an automatic transfer to a dedicated vacation savings account. By saving a little each pay period, you are going to accumulate a lot of cash in the course of a year and will be able to take a pretty nice vacation with your savings.
• Another effective technique from the other side of my family is to save your change. Now, saving your change for a few years is not going to get you to Hawaii, but it very well could pay for a night or two's stay or at least a few meals. $1.36 in change saved per day can equal $500 by the end of the year! In my opinion, helping pay for a memorable vacation is a better use of your change than gumball machines, arcade games, and lottery tickets.
• If the chance for a trip with some friends or part of your family suddenly comes up and you only have a few weeks to prepare, don’t panic. Take the cost of the trip and divide it by the number of weeks until the trip. This is the weekly amount you need to save. This may require reducing the number of times you go out to eat, giving the house cleaner the week off, or even having a yard sale, but at least you have a plan to get yourself the vacation funds you need.
• One suggestion I found amusing was to pretend gas is $5 per gallon. I know this sounds crazy, but what if every time you filled up, you saved the difference between what your gas bill would have been at $5 per gallon and what it is at the current price? Kind of a sick way to save as gasoline prices continue to rise and there continues to be unrest in the Middle East, but it could be effective.
• You could always declare a “freezer/pantry week.” By that, I mean don’t go to the grocery store. Eat up that food that has fallen to the back of the freezer and the bottom of the pantry. Sure, you might end up having a frozen pizza with a side of Frosted Flakes, but what’s great is you can save the money for vacation that you would have otherwise spent on your weekly trip to the grocery store.
• Finally, drink water. No sweet tea, no sodas, no coffee; just two hydrogens and an oxygen. This temporary lifestyle change could help fund your trip and improve your health.

Now you have several ways to save up for that next great escape, whether it is to Venice or SeaWorld. Remember, there really is no limit to where you can go as long as you plan ahead, save up for your vacation, and don’t exceed those vacation savings while you’re having one of those nice little drinks with an umbrella in it. Seriously, it must be 5 o'clock somewhere…

-Tom