There's nothing better than a well-deserved vacation. We all long for that special time off from the daily grind that we have worked so hard to earn. Unfortunately, sometimes despite all of our hard work, our dream vacation still feels out of reach financially. The internet is full of travel blogs describing methods to make our trips cheaper by cutting down on frills: travel with a budget airline, substitute a hotel for a hostel, cook your own food, choose to do free activities, etc. However, there are other ways to reach our vacation goals that don't involve compromising the good stuff. In this blog post, I discuss my top 9 ways to afford your vacation without sacrificing too much of what makes it dream-worthy!
1. Put aside a small amount of money regularly to reach your savings goal
The not-so-secret secret about saving is that committing to set aside money at regular intervals (with no exceptions!) is the best way to accumulate savings. Choose an amount that you feel comfortable with and vow to set aside that amount every week, month, or paycheck. I suggest keeping that money in its own account, so that it's left untouched. In fact, banks can help you set up automatic transfers from your checking account into a savings account, so you don't even have to think about it. Determine a target amount that you need to save and work towards that goal. You'll find that tracking the growing balance will give you the excitement and encouragement you need to keep going.
There are also several automatic savings apps that round up payment for purchases you make and deposit the difference in a savings account. This kind of automatic saving will further boost the rate at which you save, and help you reach your goal faster.
If you're interested in a tool that lets you track your vacation savings, check out the Excel Vacation Savings Tracker sold on our store. You'll find that it will really get you excited about saving for your vacation!
2. Create a vacation budget and stick to it
Before I dive in to this one, I just want to emphasize that creating a budget does not necessarily mean you're going to travel frugally! Regardless of how you like to travel, a key method of ensuring the trip remains affordable to you is to create a vacation budget in advance and stick to it. Start by determining the overall amount you can are looking to spend on this vacation. Next, break down all the different categories where you will spend (e.g. flights, hotel, restaurants, excursions, souvenirs, transportation, etc). For each category, set a limit for how much you can think would be reasonable to spend and would allow you to travel the way you've dreamed about, and make sure the total expenses add up to be equal to or less than your total budget. Once you have your budget set, keep track of all your expenses you make under each category as you pay for the trip, and don't allow yourself to exceed the limits you've set for yourself. Travelling expenses can be unpredictable, so you might end up exceeding your budget in certain categories, whereas you might also be underspending in other categories, but the ultimate goal is for the total cost to remain within budget. You'll be surprised at how this self-imposed accountability of setting a budget for your vacation will actually stretch your money to go further!
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3. Use a credit card that offers travel rewards
When choosing a credit card, make sure to select one that specializes in travel rewards. These travel credit cards will let you earn points (or air miles or cash) towards a vacation while you spend on everyday things. It is honestly surprising how quickly this kind of passive income adds up to the cost of a flight or two! A bonus is that these kinds of credit cards usually offer additional travel perks if you read the fine print. Some common perks offered are: complimentary travel medical insurance, complimentary car rental insurance, free checked luggage, complimentary airport lounge access, etc. These added perks can actually save you a lot of money! Note that some credit cards require you to purchase your travel using the card in order to qualify for the perk, so be mindful of that when you book.
4. Take advantage of credit card sign up promotions
Related to the point above, when choosing your travel credit card, try to choose a credit card which offers a lucrative sign up bonus. These promotions can be substantial- I frequently see bonuses in the range of $400-600 (either in cash or in the value of air miles or points offered). This is enough money to pay for part of (or all of) a flight. If you currently have a travel credit card, consider switching to another one just to earn this bonus. As long as you aren't switching too frequently (I wouldn't recommend switching more often than once per year), it shouldn't harm your credit score.
5. Be a member of all the travel-related rewards programs
Nearly ever major airline is part of rewards program that will earn you travel points when you fly. The great thing is that you don't have to choose- you can be a part of all of these programs! But don't stop there, you can also sign up for the rewards programs of major hotel chains as well as booking systems such as Expedia. These rewards programs will let a current trip or vacation be the start of the savings needed for another vacation down the road. Some of these programs will also offer special deals or discounts to their members, which is an added bonus. In addition, many major retailers (e.g. grocery chains, hardware stores) offer rewards programs that are travel-related. By being a part of all of these reward programs, you will passively earn travel rewards no matter what you do! This hack in combination with the two tips mentioned previously (3 and 4 above) will let you cash out travel rewards faster than you'd expect.
6. Plan your trip far in advance to monitor prices
The sooner you start planning your trip, the sooner you can start monitoring the prices of flights and hotels. You'll be surprised how much these prices can vary over time! Particularly, hotels and airlines occasionally offer sales that last only a few days, so monitoring frequently will let you catch these dips in price. I would advise to take advantage of a booking system like Expedia so that you can comb through a large pool of flights and hotels, but it's also not a bad idea to look at individual websites of airlines and hotels to see if they are running any promotions. You can also use Google Flights to set up price alerts to make your monitoring more efficient. The sooner you have your trip planned, the sooner you can start monitoring to catch deals. If possible, I would suggest starting to monitor prices at least 6 months in advance of your vacation.
7. Be flexible with your travel dates
Prices of flights and hotels can vary significantly depending on the day of travel. If you have flexibility in your schedule, I suggest keeping your travel dates somewhat fluid until you find the dates with the best deal. In addition, some flight routes only exist on certain days of the week, so flexibility on your end could mean the difference between a direct flight and a layover. Hotels often have lower rates on weekdays compared to weekends, so travelling during the week is often cheaper (and also quieter!).
8. Avoid tourist traps
Food, accommodations, and activities that are situated within a touristy area come with a hefty price! You pay a premium just because the demand is higher in these areas. But, from my experience, food or accommodations in touristy areas are not any better than in quieter areas. In fact, quite often they are worse. You will save a lot of money, without necessarily having to compromise quality, by seeking out restaurants and hotels that are slightly off the beaten path.
9. Walk instead of taking transit
Taking transit (particularly cabs and Uber, but also busses, subways, etc) can add up to a big expense when travelling. The best way to cut down on this expense is to walk to your destination whenever the distance is reasonable. I know what you're thinking: "you promised you would only list tips that don't make me sacrifice the luxuries in my vacation!". Hear me out. Walking is actually an incredible way to see, experience, and explore a new place. I can't count the number of times I've walked to a destination and discovered a cozy coffee shop, a cute boutique, or an interesting site along the way. Walking through a city will make the culture and atmosphere of a city feel much more vibrant than when driving through it. Of course, the saved dollars is a big bonus as well!