Saving For a Summer Vacation to Savor
Prepare for the vacation you've been dreaming about all winter.
Will it be the beach, the mountains, maybe a national parks tour, a kids-oriented resort, or perhaps even someplace exotic overseas?
Eventually the daydreams you’ve been having of your summer vacation will dissolve into financial reality: whatever vacation you're planning is going to cost money. Here are six smart savings tips you can do to ensure your summer vacation is great—and comes without financial strain.
- Get a plan, set a budget. Once you've decided on a vacation destination, you'll need to devise a budget, so you know roughly how much they need to save. Research is helpful to see what it's likely to cost for travel (airfare, etc.), housing (hotel, rental home, etc.), meals, transportation (rental vehicle), and activities. Adding those costs up gives a savings target.
- Establish a bank account dedicated to vacation savings. It's preferable to choose a low- or no-fee interest-bearing account that won't limit your access to cash. You can visit your local bank branch or check Bankrate.com to see what's available.
- Figure out how much you need to save to reach your target budget. Then you can commit to a plan to regularly deposit funds into the vacation account (weekly? once or twice a month?) so you're on track to hit the target. You can use an automatic savings plan or direct deposits, suggests Amy Hoffman, a certified financial planner at Advisors Financial, Inc., in Falls Church, Va., so saving isn't a matter of choice.
- Determine if they need to book certain parts of the vacation soon. Things like housing (such as a deposit on a vacation home) and air travel often require reservations and payment well in advance. Do you have adequate cash on hand now to cover those expenses? If you need to use a credit card to cover them, you should plan to pay off the vacation expenses you put on the card with monthly payments from your dedicated vacation account.
- Give savings a boost by depositing unexpected cash inflows into your vacation account. Tax refunds, work bonuses or commissions, cash gifts, garage sale proceeds—every little bit helps!
- Hunt for deals to cut costs. Renting a vacation home (via sites such as JoeOptions and VRBO) may be less expensive than staying in hotels, for example. If you've accumulated enough miles in an airline frequent flyer program, you can use them for air travel.
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