6 Steps To Simplify Saving For Your Next Holiday Getaway!

Written by imoney

Summer is a popular time for vacations but we all know saving for that dream vacation is anything but easy.

If you find yourself facing this summer without enough funds for a vacation, well, you can start saving for next summer! It is never too early to start saving for anything. By starting early, you will relieve a lot of stress and anxiety later on.

We understand finding extra cash to add to your vacation fund can be difficult. That’s why we have created this list of 6 steps to save money for your next holiday destination!

Step 1: Determine how much you need to save

The first step in jump-starting your vacation savings plan is to know how much you need to save. If you have an idea of where you want to travel, you should research for the rough estimate on how much you will need to save to make your trip possible.

It’s always a good practice to pen-down all expenses that you will expect for the trip. Not only will it keep you focused on the goal, it will also give you a feel of the actual gravity of your need to save. This will push you to be more serious in making your vacation goals a reality.

Factors you need to consider when you are estimating your budget is whether you are planning for a local or overseas vacation. If it is overseas, exchange rate plays a part in your estimation too. To be on the safe side, always estimate more than the actual  budget.

Step 2: Open a dedicated account

If you’re truly serious about saving for your dream vacation, it’s a good idea to open a separate savings account specifically for this purpose. If you start putting your vacation money in your general savings account, it can be easy to overspend on other things.

There are many savings account or time deposit account options available that will help you make great strides towards achieving your vacation savings goals.

For short-term savings like a summer vacation fund, it’s important to choose a savings tool that offers you attractive interest rate as well as high liquidity.

Step 3: Set up automatic transfers

After you have opened a dedicated savings account for your vacation fund, consider setting up automatic transfers to make contributing to this fund easier. It’s easy to skip out on savings, but automating your savings will eliminate the manual work, and ensure regular contributions into your savings account when your salary hits your bank.

You can setup standing instruction on your bank account either online or manually at the branch. Depending on the bank, each instruction would cost around ₱100 to ₱250.

Step 4: Use a budgeting tool

Now you know how much to save and where to save it in, but where do you find the money to save every month? With the rising cost of living, you may find it difficult to put aside a small sum of money for your vacation.

If you need help in managing your budget so you’ll have more money to set aside, there are tons of budgeting tools available to help you keep track of your spending. These tools make it easy to monitor your financial behavior, and will even allow you to set up savings goals. 

Step 5: Cut your spending

By having a budget, you will be able to identify the areas where you are overspending. Once you know where you need to cut back on, you need to have a plan on how to reign in your expenses. There are many ways you can cut your spending, and here are some of the most common ways you can do that effectively.

• Stop buying on impulse

One of the best things you can do to start saving money now is to stop buying on impulse. This may be easier said than done, but it’s doable. One sure way to eliminate impulse spending is to write a list before you go to a store or better yet, not having to go to the store at all! Ask a family member or a friend to shop for you or just order your items online.

• Eat-in

On the average, an office worker in Manila spends about ₱30.00 to ₱100.00 per meal at karenderia for lunch when he or she eats out. That’s a very conservative estimate. 

If you’re the type who would eat out for lunch everyday on a work day, you’ll be spending on average over ₱250 a week if you eat in karenderia and more than ₱1000 if you decide to splurge at restaurants and cafes. That does not even include the cost for dinner and breakfast! However, if you cook at home, ₱1,000 spent on grocery is more than enough for a week’s worth of meals.

Step 6: Earn more

Just for the lunch alone, if you cook at home you can save up  to ₱830 a week! In a month that’s ₱3,320. That’s worth two nights accommodation in Bangkok!

To boost your savings, other than savings you should also look for ways to earn more. This is not just good for your summer vacation fund, the extra income can help with your daily expenses and other financial goals.

Here are some ways you can earn a little extra:

1. Consider renting out space

If you have extra room in your home, consider renting it out to people traveling to your area via platforms like Airbnb or HomeAway. You may be surprised by how much money you can make each month simply by renting out a spare room in your home.

2. Sell your stuff

If you have a lot of stuff that you don’t use such as clothes, electronics, or even jewelry, consider selling these items online to make some extra money. Selling unwanted items is a fantastic way to jump-start your vacation savings plan.

3. Pick up a side hustle

The Internet has made finding additional income opportunities extremely easy. If you have marketable skills such as web development, accounting, writing, online marketing, or even customer service, chances are you can find an opportunity for additional income online.

Step 7: Get a travel credit card

Consider using a credit card where you can earn rewards, accumulate airline miles, or gain access to exclusive travel discounts. Travel credit cards typically come with travel privileges such as access to airport premium lounge or even exclusive seat sales.

A few factors you need to look out for when you are choosing a travel credit card are, how much do you need to spend to earn a point, what is the point conversion rate to air miles of your choice, and what is the redemption value for each point.

With a good travel credit card, you may be able to cover your airfare with your credit card rewards by next summer! There are plenty of credit cards that offer amazing travel perks. Our guide will help you choose the right travel credit card for you.

Save now to travel later!

Regardless of what your travel goals are, it’s important to understand the importance of saving over time as opposed to waiting for the last minute. If you like to take vacations each year, you should have a separate savings account for your vacation-related expenses.

Making monthly contributions now, cutting out unnecessary expenses, and sacrificing some fun right now will pay dividends in the long-run, and eliminate a lot of stress. Your dream vacation isn’t out of reach. It all starts with having a solid savings plan and sticking to it.

This article was first published in May 2017 and has been updated for freshness, accuracy and comprehensiveness.