Here’s Why Vacations Must Be Part of Your Savings Plan, According to an Expert
It’s common knowledge that saving money is essential, as is knowing what you’re saving for. A September survey by GOBanking Rates found that while 44% of Americans are saving for an emergency fund — good on them! — only 8% of respondents are actively saving for a vacation. According to a new travel survey published by The Vacationer, more than two out of three Americans plan on traveling this holiday season. So why not make your vacation part of your savings plan?
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Here are the reasons to save for your next vacation.
Cheap Hotel Rooms Without the Hassle of Point Collecting
Murtaza Khanbhai, founder of Reward Flight, said that one of the key reasons you should save for a vacation is that you save money on your trip. For example, if you plan far advance, you don’t need credit cards to price-hack a hotel room.
“Hotels have ‘best price’ guarantees for booking directly with them,” he mentioned. Hilton offers 25% off if you find a cheaper price elsewhere, including places like Expedia and Booking.com. Having cash already put aside, you can take advantage of more affordable hotel room sales than a point conversion.
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Credit Card Hacking for Free Flights
If you use credit cards often, use a credit card with a high reward rate. Credit card companies often offer promotions with opportunities to earn additional points or cash-back rewards for everyday purchases. For example, 2x the points for one month on groceries or gas. Certain credit card companies also offer other travel benefits, such as access to priority pass lounges at the airport with free drinks and food, which you can take advantage of while you wait for your next flight.
Have a Plan That Allows Your Dollar To Go Farther
Saving for a vacation also allows your budget to go farther. When you plan ahead, you can take advantage of sales and credits you may need to pay for in advance. For example, taking the time to research Airbnb and public transportation costs can help you determine if it’s more economical to stay in a hotel or rent a car — and if you’ve budgeted, you’ll have the cash available to make down payments to hold your reservation.
Planning can also help you save on ticket admission costs for any attractions by having the time to watch places such as Groupon and Costco to take advantage of discounts. For example, tickets to Disneyland are sometimes cheaper when purchased through another retailer than Disney Direct. Disney gift cards can also be more affordable through a retailer like Target, which offers Red Card members a 5% discount.
How To Make It Happen
Knowing you need to save for your vacations is the first step — here are the other steps you’ll need to accumulate that cash.
Consider Different Budgeting Tactics or Combinations
Budgeting is an essential block of your financial wheelhouse and can help make travel affordable. If you aren’t budgeting or dislike budgeting, try different budgeting strategies to see which one sticks.
Zero based budgeting, the 50/30/20 method, cash envelopes and pay-yourself-first — sometimes referred to as the “anti-budget” — are all different ways to set aside money to spend on travel.
Cut Back on Expenses
Another way you can save more is to look at your expenses to see where you can cut back your spending. Using coupons on groceries and household goods can allow you to save more for a vacation. So can getting rid of unused subscriptions, cutting back on going out and doing more things yourself instead of outsourcing them.
Earn Additional Income
You can cut back your expenses, but you can also earn more income. Consider taking on a side gig, such as driving for rideshare, being a personal shopper or pet sitting. If you have a lot of experience in a particular field, consider starting a blog or writing an e-book. You can also house hack by renting out an extra room or another living or storage space.
Set Up an Automatic Transfer
An easy way to ensure you’re saving money is to transfer funds to a savings account separate from your current one. You can save money by using an automatic transfer without adding extra energy. You can also download your bank’s app and transfer more money if you feel spicy one day.
Create a Vision Board
Whether you believe in manifestation or just plain goal setting, creating a vision board for your next vacation is still a fun and inspiring idea. Based on the Law of Attraction, vision boards allow you to visualize a future with details of what’s possible. Even professional athletes make vision boards to help them stay on track with their goals.
Don’t Leave the Credit Card at Home
Along with utilizing credit cards for cash back and points, you can also use them to save on foreign currency fees. Khanbhai shared that “bringing U.S. dollars and converting them can cost you up to 5% in fees alone.”
Then, suppose you have any leftover foreign currency. In that case, you’ll pay additional fees to convert it back to U.S. dollars. To get around this, check to see if your credit card will allow you to use your card for a lower — or no — penalty. Even if it charges a small fee, it’s almost guaranteed to be much cheaper than the one you could be paying to convert cash.
Adding vacation funds to your savings plan allows you to treat yourself without going into debt. It can also make your vacation more enjoyable, because you earned it.
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This article originally appeared on GOBankingRates.com: Here’s Why Vacations Must Be Part of Your Savings Plan, According to an Expert
