When you’re stuck in the dead cold of January, summer can seem like it will never arrive. Although June is months away, now is actually the time to begin planning and saving for your sun-filled summer getaway. By taking on the task of saving for your vacation now — in small, manageable steps — you can make it a much easier goal to accomplish. We spoke with some money-saving aficionados to learn how you can start saving for your vacation (and achieve your savings goal) now.
Create a bank account and divert a portion of your paycheck to it.
“Open an additional bank account and have a modest portion of each paycheck diverted there ($25 or $50 — whatever your budget can afford),” David Bakke of Money Crashers recommends. It sounds simple, but it really works. “I personally have an automatic draft come from my account into a credit union/savings account,” Dethra U. Giles, VP of consulting services for ExecuPrep, told us. “The account is not easily accessible so the temptation to use the money passes before I can actually access it. The draft happens at the same time as my direct deposit, so it feels like the money was never there. This happens without any effort on my part, aside from the setup. To date I have saved nearly $2,500 for my family vacation in July. By July we will have over $3,600.”
Start looking for ways to make extra money now.
Even if you can’t have a yard sale now, Leslie Tayne, Esq., Financial Attorney, Tayne Law Group, P.C., suggests that you start cleaning and organizing while the weather is cold. “Clean out your garage or attic to identify unneeded and unwanted items you can sell in a garage sale in the spring or that you can sell online for extra money.”
Put cash-back earnings toward the trip.
“Put your cash-back earnings (from credit card rewards and online shopping) aside throughout the year to let the value add up,” advises Jon Lal, founder, BeFrugal.com. “The average cash-back rate on the site is 7 percent, and this can usually be earned while earning credit card rewards. Save up both toward a vacation for maximum savings! Cash back from online shopping is awarded as a check or PayPal deposit, and credit card rewards can often be awarded as a prepaid card, which can be used on the trip to buy airfare or pay for a vacation hotel stay.”
Set up an ‘inconvenient’ savings account.
Todd Christensen, author of Everyday Money for Everyday People, suggests going the out of sight, out of mind route. “Set up a separate savings account (they’re free) at a new and ‘inconvenient’ financial institution (bank or credit union with one local branch not located near home or work, no drive thru, no ATM card, no Saturday hours, etc.), and have a specified amount direct-deposited from paycheck (or bill pay from main account). An online option like SmartyPig.com also works well.”
Set small goals to reach the big goal.
Gene Natali, co-author of The Missing Semester, points out how intimidating big money goals can be. “Big money choices (like a vacation) are often intimidating — primarily because the total cost is a big number, and it’s hard to think how we’ll come up with that “total” dollar amount. Less intimidating, and likely more achievable is to set small goals that add up. For instance, save $3 a day. If the vacation is seven months away, and it’s a $600 dollar vacation, you’re all set!”
To get you started achieving small savings goals, Alice Price CPO-CD® COC®, Professional Organizer and Coach, OrganizeLongIsland.com, suggests the following, “Since you are probably making a New Year’s resolution to get healthier too, try this: Give up one gourmet coffee a day and put the $5 away for summer vacation. By the 4th of July you will have saved about $1,000!”
Start planning early.
Planning early will give you time to seek out the best deals. Christina Povenmire, CFP, MBA, CMP Financial Planning says, “Once you know your timeline, keep an eye out for flight sales. You can save hundreds of dollars if you buy at the right time, because you’re prepared when the opportunity strikes.”