6 Steps To Simplify Saving For Your Next Holiday Getaway!
Summer is a popular time for vacations but we all know saving for that dream vacation is anything but easy. Though, next summer may seem like a lifetime away, and starting a summer vacation fund may not be your priority right now, 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 the 10 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 focussed 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. Some valuable tools to consider include Mint, Simple, Budgetpulse, and Buxfer.
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 ₱70.00 per meal at karenderia for lunch when he or she eats out. That’s a very conservative estimate. If you’re the type who’d rather eat out in a more modest restaurant, you’d be spending more! Rough estimate would be ₱200 per meal. If you were to prepare your lunch at home, ₱200 worth of grocery could help you get by with your meal for three days!
If you’re the type who would eat out for lunch everyday on a work day, you’ll be spending ₱350 a week if you eat in karenderia and ₱1,000 if it’s a more modest resto. 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.
So how much do you actually save?
Cost per meal Cost per week (5 working days)
Eating out in a modest restaurant ₱200 ₱1,000
Eating out in karenderia ₱70 ₱350
Cooking at home ₱34 ₱170
Source: numbeo.com
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:
- 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.
As a host on Airbnb, you can choose to either rent out a private room, a shared room, or rent out your entire home. Airbnb provides a calculator to help you determine what your average weekly income could be based upon the type of rental you plan to list. The below chart summarizes how much you could expect to earn weekly by renting out a property in Metro Manila that can accommodate two people.
| Shared Room | Private Room | Entire Home |
|---|---|---|
| ₱5,133 | ₱6,398 | ₱9,461 |
It’s easy to see how renting out space in your home could help you reach your savings goals quickly. In a span of few days or weeks, you’ll easily hit your target funds just by renting out your room!
- 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.
Some platforms you can use to sell pre-loved items are good ol’ Facebook and olx.ph.
- 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.
Check out freelance platforms like raket.ph, iwriter.com, onlinejob.ph, or upwork to find an opportunity that matches your skillset. Best of all, as a freelancer, you are your own boss. This means you can pick how much, and how often you work.
The most flexible freelance job that you could do is freelance writing. If you have savvy writing skills, you have the potential to earn at least ₱414 pesos per 500 word article. If you write once a day, five days a week, you’ll be earning an extra of ₱2,070 a week ! That’s ₱8,280 in a month!
If you plan to travel within the country that could already cover your return airfare, or a one-way airfare to neighboring countries like Thailand, Malaysia or Singapore!
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.
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