A vacation should be relaxing, but if you feel stressed about how you will pay for it, it is hard to relax. Whether it is a cruise, road trip, or another getaway, now is the right time to begin saving for it. If you are creative, you can set aside enough funds to hit the road with peace of mind. You don’t have to go into debt to pay for an expensive vacation. Saving money is often difficult, but taking a trip is often great motivation.
Refinance Existing Loans
If you have plenty of debt, it might not make financial sense to spend money on vacation. But if you have loans from school, it’s possible to refinance and combine existing balances into a new payment. That way, you can save on monthly expenses and set aside more for travel. Refinancing involves replacing the current loan with another one. Depending on the interest rates and what you want to accomplish, there are several things you can do with the process, such as:
- Paying off the loan faster
- Reducing the payments each month
- Lowering the amount of interest that you pay in total
Have a Separate Bank Account
If you will take an expensive vacation, consider setting up a separate travel fund at the bank. If you can find a high-yield account, you could even make some money while waiting to leave. Your local bank will likely allow you to open a separate savings account, but you might not be as likely to spend the funds early if you choose an online bank. Many banks have the option of online payments, letting you automatically send the money each month. If you get extra funds, like birthday money or a tax refund, consider putting that toward the trip as well. If you have a side business, you might consider putting some or all of that toward your vacation.
Set a Goal
If you create a budget in advance for the trip, you do not need to spend much time worrying about spending while you are on vacation. Think about how much you might pay, including airfare, lodging, rental cars, gas, souvenirs, and food. If you want to visit any events or attractions, make sure you budget extra for that. Once you have your estimate, increase it a little in case you have an unexpected expense.
To figure out how to reach the goal, work backwards from there. Divide the cost by the number of months before your trip. That way, you can decide how much money you need to set aside each month. So, if you want to take a $3,000 trip next year, you’ll only need to set aside $250 each month. You might not have a vacation date yet. If that’s the case, you can decide how much to set aside each month. Then divide the total cost by that number. Then you can figure out when to leave. So, if you want to have a $3,000 trip and can only save $175 each month, you’ll have to wait a year and a half.