4 Min Read
Are you thinking of taking a vacation but can’t quite figure out how to do it without breaking the bank?
No matter what vacation preferences you have, saving money for a trip will make things easier for you.
If you’re unsure where to start and how much you should save for your vacation, here are a few guiding principles.
How Much Should You Save for Your Vacation
How much to save for a vacation highly depends on your preferences. For example, you’d need a much lower budget for cheap travel like a local road trip within your country compared to a trip to the Maldives.
Here’s the list of main expense categories you should get information about before starting to save money for your vacation:
• Transportation costs. Include any airplane, train, and bus tickets, taxi fares, Uber/Lyft, or gas expenses you might need to pay.
• Accommodation costs. Do your research on Booking.com or Airbnb, and write down the total estimated price you’ll be paying for your accommodations.
• Food and entertainment costs. This varies not only from country to country, but you might also find different prices for food and entertainment in different areas within the same country. However, you should easily find prices for food and entertainment for most travel locations online.
• Souvenirs. Planning what you’d love to take back home can help limit your spending. And also help you think about what kind of items would be the most meaningful to you.
• Trips, tours, and admission prices. Everyone loves spontaneity. But plan those bigger stops along your trip if you feel like you may go to a museum or other local attraction.
What’s good, you can get all the necessary information about the costs of your travel online. This makes it easier to plan a more specific budget that you can stick to.
Write down your estimated travel expenses for each category listed above to understand how much you should save for your upcoming vacation.
Now that you know how much money you need for your next trip, let’s find out how to save money for a vacation.
How to Save Money for a Vacation
Step 1: Create a Target Savings Goal
The first and most important step to saving money is to create a target savings goal. And it’s as simple as listing all your potential vacation expenses along with their estimated costs.
Step 2: Create a Savings Plan
Once you have a clear savings goal target, it’s important to create an actionable savings plan to move towards your initial goal. To do this, it's best to figure out how much should you save a month to reach your goals.
Here’s how to do it:
1. Calculate the number of months left before your vacation.
2. Divide the amount you need for the vacation, i.e., your target savings goal, by that number of months.
3. The amount you get after this calculation is the amount of money you should save each month from now until the time you leave.
Step 3: Create a Dedicated Savings Account
Setting up a separate savings account for your vacation makes it simple to track your savings easily. In addition, you’ll avoid spending money from your general savings.
Apps like Monorail can help you create a dedicated savings fund. Add as many savings goals, and even items you’ll need for your trip, and start saving money to make your dreams come true.
Step 4: Automate Your Savings
You can reach your financial goal only when you stay consistent. With the Monorail app, you can automate your savings by setting a date and amount you’d like to deposit into your savings account.
For example, you can set an automation that will deposit $500 into your vacation savings account every two weeks or once a month. What’s best, you can set it once and forget it while Monorail moves money for you between your accounts.
Step 5: Plan the Trip that Fits Your Budget
No matter your destination, you can plan a vacation on a budget.
For example, if you’re tight on budget, you could stay at a budget-friendly hotel and eliminate expensive entertainment. On the other hand, if you have a more flexible budget, you could treat yourself to a higher-class hotel or a more expensive travel activity.
Most importantly, don’t forget to stick to your vacation budget as closely as possible to avoid overspending your money. Prioritize the things that will make you feel best about your trip and will make your experience worthwhile. An affordable vacation can still help you create those amazing memories.
Step 6: Re-evaluate Your Income and Expenses
Re-evaluating your income and monthly expenses can help you reach your target savings goal faster. Simply said, you should focus on decreasing your expenses, increasing your earnings, or doing both simultaneously.
• Adjust your monthly budget and expenses. Creating a journal where you write down all your monthly expenses is a great starting point. This can help you identify where you might be overspending and eliminate unnecessary expenses the next month.
• Start a side hustle to get extra money. Side hustling is the best way to increase your income and set more cash aside for your vacation. For example, you could join Uber to make money ridesharing or DoorDash to deliver food for extra cash.
Are You Ready for Your Vacation?
If you follow this step-by-step guide, you should be all set financially. Once you have a budget for your vacation, you'll have peace of mind and enjoy your well-deserved vacation better.
See how saving with Monorail can help you set a savings budget for your next trip.
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