How to Save for a Vacation: 10 Strategies to Saving Every Penny

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how to save for a vacation

Dreaming of sun-drenched beaches, historic cities, or adventures in far-off lands? The cost of travel can quickly add up, but making your travel dreams a reality is easier than you think with some smart saving strategies. 

We’ve got insider tips to help you squirrel away enough cash for that bucket-list adventure without saying buh-bye to your avocado toast addiction.

Follow our master plan, and you’ll be living it up in paradise while your FOMO stays home alone. Let’s dive into the secrets for how to save for a vacation. In the meantime, consider opening a high-yield savings account to boost your dream vacation fund.

10 simple steps to save your dream vacation

Ready for a dream vacation? Learn how to save more and explore both close to home and wherever else you desire this year. 

1. Decide when to travel

Traveling during off-peak seasons can significantly cut vacation costs for flights, accommodations, and activities. Consider planning your trip during the off-season or avoid major holidays for the best deals.

For example, most of Europe is spectacular in September and October, when the majority of tourists are back in school and their fall routines. You can score cheaper accommodations, rental cars, and meals. In addition, you’ll have the chance to experience major attractions without the crowds.

Before deciding when to travel, research prime seasons at your chosen destination. You could visit the Rocky Mountains or the Alps for less if you opt to visit in summer rather than winter. You’ll get amazing outdoor activities like whitewater rafting, hiking, ropes courses, and more, on a limited budget. 

2. Choose a destination

Some destinations like Japan and Switzerland have a higher cost of living so you’ll pay more for everything from gas to groceries, while other destinations have significantly lower-cost. Make sure to research potential destinations and consider factors like cost of living, flight prices, and activities that interest you.

Need some inspo? Check out our guides on the most affordable places to travel in the US and budget-friendly European destinations.

If you’re looking to save more within Europe, check out countries like Estonia, Lithuania, Poland, Croatia, and other countries that offer rich culture, natural beauty, great food, and friendly cities at a fraction of the cost. Likewise, there are travel dupes for popular destinations that can be less expensive, less crowded, or both. 

3. Determine the overall cost

Once you’ve locked in those dream dates, it’s time to start crunching the numbers. In other words – it’s budgeting time! Tally up every potential expense from airfare to luxurious digs to those can’t-miss activities. Consider expenses like airfare, accommodation, transportation, activities, dining, and travel insurance. 

Some credit cards offer travel insurance as an additional. However, you’ll need to check the coverage and usually need to book the trip with that card to access the insurance.

If you still need to figure out the total costs, you can nail down the major costs like airfare, transportation, and accommodations, and give yourself a set budget for the other expenses to fill in as you plan. 

4. Create a budget

Scoring an epic vacay doesn’t have to mean putting the rest of your money moves on pause. By cleverly carving out those vacation funds from your monthly cash flow, you’ll stay on track to slay your other big-money goals too. 

One tip is to follow the 50-30-20 budget rule. 

With this strategy, 50% of your after-tax income is allocated to necessary expenses like housing, healthcare, food, and transportation, and 30% is allocated to wants including clothing, vacation savings, and other fun activities. The remaining 20% is allocated for long-term savings, including your emergency fund and retirement savings.

You can make a budget and set aside a portion of each month’s vacation savings. Saving even $300 per month could lead to $3,600 in vacation savings in a year. Talk about a win-win!

5. Track your expenses

Monitoring your daily spending can help you identify areas where you can cut back and redirect those funds toward your vacation savings. To start, track all expenses for a month without trying to cut back. This process can help you become more conscious of spending habits and opportunities to cut back.

6. Cut back on unnecessary expenses

Evaluate your current spending habits and eliminate or reduce non-essential expenses like dining out, subscriptions, or impulse purchases. The money saved can add up and contribute to your travel fund.

If you’re up for a more aggressive challenge, consider loud budgeting or a no-spend challenge. Alternatively, for one week, each time you’re tempted to make an impulse purchase, transfer that money into a vacation fund. You could be amazed by how much you can save, and how much satisfaction you’ll gain from watching the account grow. 

7. Open a separate savings account 

Keeping your travel funds separate from your everyday accounts can help you resist the temptation to dip into them. Consider opening a high-yield savings account dedicated solely to your vacation savings. A high-yield savings account offers significantly higher interest rates — often 3% to 5% APR — helping your savings compound and grow.

8. Explore ways to earn extra income

There’s only so much you can save for vacation on a limited budget. That’s why a side hustle can help you earn more. You can boost your vacation savings by taking on a side hustle or freelance work using your existing skills or expertise. 

MoneyLion offers specialized guides that could help you earn an extra $500 a week. Whether you’re a teen or a professional, new ideas to make more money, are out there. With a little research and creativity, you could boost your vacation savings faster. With online platforms, remote work, teaching opportunities, and rideshare, there are so many ways to make more money as a part-time job or new full-time career. 

9. Look for deals and discounts for your trip

While planning your vacation, be on the lookout for discounts on activities, attractions, travel insurance, and more. Sign up for deal alerts and follow travel bloggers or influencers who share money-saving tips. 

Google lets you set up flight alerts to get the best prices for your travel dates. If you can be flexible on either the destination or the dates, you could get even better deals. Or, use the Google Explore feature to find great deals from your home airport for your date. In addition, CapitalOne Travel and other booking sites offer price drop protection so that if the ticket you book drops in price within 10 days, you’ll get a refund for the difference. 

Many cities offer free museum days or museum passes so you can experience diverse cultural exhibits without spending a small fortune. You can look for free events at your destination and tap into special offers for families to save more when you bring the kids. 

10. Consider getting a personal loan

If you’re still short on funds, a personal loan can help bridge the gap. Just be sure to factor in the interest and fees and have a solid repayment plan in place to avoid accumulating debt. Vacation loans could be a last-ditch solution as you’ll almost always end up paying significantly more than the upfront cost. However, if you have a plan to pay off on time and can’t delay the trip, the on-time payments could (eventually) actually help your credit score. 

Final tips to save for more vacations this year 

Saving for a vacation requires discipline, commitment, and a strategic approach. By following the 10 strategies above and adapting them to your family’s needs, you can make steady progress toward your travel goals. The memories and experiences you’ll gain from your well-earned vacation will be priceless. Start planning and saving today, and get ready to embark on the adventure of a lifetime.


Why save for a vacation?

Saving for a vacation allows you to plan and budget for the trip of your dreams without going into debt. It can help ensure you have the funds to truly enjoy your time away without financial stress.

Where to put money on vacation?

One of the best places to put money for a vacation is in a dedicated high-yield savings account designated for your vacation funds. This separates your travel savings from your everyday spending and can help you resist the temptation to dip into those funds.

How much should be saved for a vacation?

The amount you should save depends on your destination, travel style, and intended activities. As a general rule, aim to save enough to cover flights, accommodations, transportation, activities, dining, and additional expenses. You can learn about setting a vacation budget in step four above!

Why should you spend money on a vacation?

Vacations offer numerous benefits, including reduced stress, improved mental health, and the opportunity to create lasting memories. Research shows that spending money on experiences like travel can bring more lasting happiness than material possessions.

Is saving for a trip a short-term goal?

Saving for a vacation can be considered a short-term or medium-term goal, depending on the timeframe and the amount you need to save. With careful planning and commitment, you can achieve your vacation savings goals within a reasonable timeframe.

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