There is no better time than now to make a travel savings plan. The more time you have to save, the more at ease you will be on your next trip. Below I am sharing how we created a travel savings plan that works with our budget and how you can too.
Create Your Travel Savings Plan
7 steps to create your travel savings plan so you can make your travel dreams come true.
1. Set Up a Separate Savings Account
You want to keep your travel savings separate from any other savings accounts you have. This eliminates the temptation to take money from it or the possibility of mixing up your financial savings goals.
Pro Tip! Keep your savings in a high yield savings account so that your money can earn interest and hedge against inflation while you save.
2. Label the Account for the Trip You Want to Take
I know this sounds like a step you could skip, but it’s not. Labeling your savings account with the destination will help remind you what the account is for and help motivate you to continue sticking to your travel savings plan. We labeled ours “Iceland 2021” and the other “Dream Destination 2022”
3. Create An Itinerary
Your itinerary will should cover:
- Your destination
- How many days you plan to be traveling
- Other travel fees like park passes or tolls
4. Figure Out Your Approximate Travel Dates
Knowing when you will travel tells you two important things:
- First, your travel dates will determine how busy it will be when you travel. Peak season is prime time for tourists. This can vary between destinations.
- Secondly, if you travel during peak season your lodging and flights will likely be more expensive.
5. Map Out The Total Cost
Now that you know your travel itinerary and your approximate travel dates you can map out the cost. This is an essential step in creating a travel savings plan. With a little googling and maybe even YouTube research you should be able to come up with an estimate of the total trip cost.
Pro Tip! If you are leaving the country be sure to look at the exchange rate!
6. Automate Your Savings Each Month
Now that you know your total cost, map out how much you should be saving each month. You can find this number by taking your total trip cost and dividing it by the number of months until your trip. Then, automate this to come out of your regular budget each month and go into your separate travel savings account
7. Pack Your Bags When You Reach Your Travel Savings Goal
Once you reach your travel savings goal, pack your bags, and enjoy your trip without worrying about a credit card bill you can’t pay when you get home.
ProTip! Find a credit card that has 0 foreign transaction fees if you’re leaving the country. Be sure to spend within your travel savings plan on this card, but easily avoid fees and know you have fraud protection.
Bonus Travel Savings Tips
We have traveled quite a bit and want to share a few more travel savings tips with you.
- Try to pay for a portion of your trip (or all of your trip) with credit card points
- Set up flight price alerts with google flights so you can buy when they drop
- Make your “Gifts” to your travel partner money contributions to your travel savings account
- Don’t buy souvenirs that will sit on a shelf. Instead, take tons of photos and focus on the experiences.
Can You Save for Travel and Reach Other Financial Goals?
A travel savings plan should be something that works with your current financial state. This means if you are late on any payments or you are living paycheck to paycheck, you should take care of those financial priorities first. If you are already good to go on that front, then you can absolutely create a travel savings plan while paying off debt, investing, etc. We are all about having a balanced life while we reach our bigger financial goals.