The Go-Go’s said it best: “Vacation, all I ever wanted.” Americans have some of the longest working hours compared to other developed countries around the world, often failing to take advantage of personal and vacation time. It’s time to stop daydreaming about vacation and start implementing a plan to take some time off to explore, relax and de-stress. Whether you’re arranging a weekend getaway or embarking on your dream adventure, planning ahead is essential when preparing for your next trip.
As you begin your vacation preparation, consider these tips for an effective, stress-free vacation savings plan:
- Research: Plan your vacation as you would for any goal by identifying the timeframe, steps and estimated cost. The first step is to identify what type of trip you want to take. Are you planning a weekend camping trip in the mountains or a 10-day European excursion? Your savings plan will look drastically different between the two, but important nonetheless. Will transportation and accommodations account for a large portion of your expenses? Consider signing up for email alerts from airlines and hotels to snag a great deal on flights and rooms. Also, check out TripAdvisor.com for tips from real travelers for saving opportunities. If you’re looking for a more “local” experience, consider options like Airbnb or a staying with a host family to get a truly immersive experience. If you’re traveling outside of the country, remember to check on currency exchanges and any associated costs. Lastly, browse travel blogs and consult friends or family members who have previously travelled to your vacation destination for any tips and tricks they learned.
- Set financial expectations: Who else is joining you on your vacation? Will they be pitching in or are you funding it yourself? Make sure you communicate clearly about expectations at the beginning. Consider making it a family savings activity where everyone starts saving for the trip in proportion to their income. This way everyone feels that they contributed to it.
- Budget…then budget some more: A key part of vacation planning is setting aside the funds ahead of time to finance the trip. It’s no fun to pay for fun you've already had, so create a savings account well before the trip. Opening a separate travel fund will allow you to contribute a percentage of your income specifically toward your vacation and you’ll be less likely to dip into the account for any unexpected costs (that’s what an emergency fund is for). Budgeting tools from your bank, or smartphone apps like Mint, can help track your savings progress. Additionally, check to see if your credit card offers a rewards program or “cash back” option to contribute to your budget. Now that you’ve identified the costs of your trip – including transportation, accommodation, sightseeing and other excursions – consider saving a little extra, if possible, to cover any emergencies or hidden costs. It’s better to save too much money than not enough.
- Live conservatively: During the time leading up to your trip, consider cutting back on extra expenses, such as eating out or other entertainment activities. Sacrificing these activities now will allow you to set aside more for your trip and indulge in the finer things while on vacation without worrying about sticking to a tight budget.
Consult a CERTIFIED FINANCIAL PLANNER™ professional to identify an appropriate savings plan to meet your vacation goals. He or she will know the right financial tools and strategies to make your vacation a memory that will last forever.
Kick back, relax and enjoy your adventure. You’ve earned it.