How to Start Saving for Summer Vacation
Summer is almost here and that means the vacation you and your family have been dreaming about during the long, snowy winter is just around the corner. Whether it’s an in-state trip to historic Gettysburg, a road trip to New York City or Boston, or a couple of weeks abroad, you’ve likely put some time into deciding where to go, how to get there, and how much you need to save to make it all happen. But saving for summer vacation isn’t easy—especially when you’re already putting money aside for big milestones like buying a house, your child’s education, or retirement.
Deciding when to start saving for your vacation really comes down to how much you’re planning to spend—but it’s always best to start early. Regardless of the size of your budget, there are a number of things you can do to save money for your trip.
1. Create a Vacation Budget You Can Stick to
To start off, you need to figure out everything you’ll be paying for—and how much you’ll be paying. Have you considered transport costs? What about accommodation and food? Are you planning on a guided tour? Do you need camping equipment? And don’t forget about those hidden costs like state taxes or currency exchange fees. Once you’ve done the math, you’ll have a better idea of how much you need to pay upfront (e.g. for flights and reservations) and how much more you’ll have to save until you leave.
2. Set Up Vacation Savings Account
One easy thing you can do to start putting money aside is open a savings account specifically for your summer vacation. Like holiday club accounts—which people use to save for gift shopping, traveling, and hosting events—a separate account will protect your vacation fund from being spent elsewhere and let you focus on tracking how close you are to your goal. If your savings plan includes putting a fixed amount towards your fund on every pay day, for instance, then you can set up automatic payments from your checking account.
3. Cut Back on Expenses
A great summer vacation may mean having to reduce your spending in the months leading up to it. When you’re in the planning stages, take some time to review your online account for your spending habits and identify some key areas where you might cut back. If your family is prone to eating out, consider opting for home cooked meals—on average they are 69% cheaper than what you get at a restaurant. Other ways you can save include buying your groceries in bulk, exploring vintage or second-hand stores, and keeping an eye open for sales. While it may be hard to adjust to these practices, keep in mind that all the money you save will go towards your much deserved vacation.
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4. Sell Unwanted Items
If your family has caught the Marie Kondo bug and decided to completely declutter your home, that could also help you save. Take advantage of the spring weather and hold a garage sale to make money on the items you don’t use anymore. By the same token, if you need equipment for your vacation like tents, surfboards, or backpacks, save money by buying them secondhand or by exchanging the things you’re getting rid of in your local barter community.
5. Make Use of Your Tax Refund
Your tax refund can also contribute to a vacation fund. As long as you file by April 15, it’s likely your refund will come in before summer starts. Since you’ll already have some insight into how big the refund is, you can have it automatically deposited into your account and adjust your savings plan accordingly. For other ideas on how to effectively use your refund and to make sure you’re getting the most out of tax return, you can always talk to your financial advisor.
6. Use Credit Card Rewards
Whether you’re booking a flight or a hotel, summer vacation is an ideal time to put your credit card rewards to work. Consider changing your current credit card for a travel rewards program that lines up with your travel style. If you prefer having money in hand, you can also opt for a cashback rewards program that helps you save with every dollar you spend.
At Citadel, we’re glad to help our members in all of their saving needs. If you’re interested in opening one of our savings accounts for your vacation, or want to switch to a rewards-based credit card, contact us today.