How To Save for Vacation on a Tight Budget

You work hard. You need a vacation. Oh, but the dreaded money issue: how much to save for the vacation you desire, how to actually save for a trip when your money is already stretched thin, and how to actually enjoy said vacation without money anxiety while on the trip.

When it comes to figuring out how to save for the vacation you want, you need to start by planning where and how you want to travel, how much money you currently have, and then how much money you need to make it happen. Figure this out first, and then apply the tips below to get your vacation cash flowing.

Create or prune your budget

If you don’t use a personal budget, start now. It’s difficult to see where you can trim expenses if you don’t know where your money is actually going. Once you start tracking where your money goes and put a budget in place, you’ll know where you can reduce expenses to start saving. If you have a budget already, take a hard look at it to see where you can reduce and funnel that extra savings into a vacation fund. Planning ahead is key, so don’t wait until you desperately need a vacation to start saving.

Spend less and pay down debt

Consider putting the cash you’d normally use for groceries and entertainment into an envelope every pay period (leave the rest of the money in the bank for regular bills). When the cash runs out, you know you’re out of cash until the next payday. It may seem primitive, but denying yourself the debit card will keep you from overspending. Each time you look into that envelope, you’ll know how much you can spend today to last until payday, forcing you to plan ahead. You can easily implement this plan in 15 minutes using the cash envelope system.

Wouldn’t you love to use the money you’re now using to pay creditors towards a vacation instead? Paying down debt means, when you finally get out from under it, you have more money to work with and more freedom. You can destroy your debt, even if you’re living paycheck to paycheck.

Use automatic transfer to savings account

Open a dedicated vacation savings account and set up auto-payments that deposit into it every month. Treat this auto-payment like a bill and don’t touch the account until you’re ready to travel. Out of sight means out of mind. Even better, choose a trusted online bank that offers a bonus upon opening an account and interest on your savings. Sit back and watch your vacation account expand. You know the old “throw your change into the jar every night” trick? Yeah, it works. It may not be loads of money at the end of the year, but it may be a few hundred dollars.

Reduce weekly spending

Eliminate unnecessary costs for items like your monthly manicure, trips to the movies, or the daily cup of coffee. Eating out, while convenient, costs you more than you think. Add a few drinks to that, and suddenly you’re over budget. Cook at home. Reduce the amount of meat you eat and buy more veggies. Find cheaper or free entertainment when you want to go out. Cut the cord and eliminate cable and opt for Netflix or Hulu instead. Can you do without the expensive gym membership and work out at home?

Use a credit card wisely

Make your credit card work for you and choose or switch to one that offers airline miles, free checked baggage, and other incentives. Resist the urge to use it for impulse purchases and online shopping.

Pick up a side gig

Do you have a special skill you could use to drum up more cash? Consider a part-time job or a side gig that’s different from your normal job. Can you tutor from home? Walk dogs? Babysit? Paint houses? It wouldn’t have to be permanent, but just enough to help you save for vacation.

Sell stuff

Think of what you don’t use that’s sitting around. Can you sell it? You can downsize, simplify, and save for vacation at the same time. Consider selling through local Facebook resale groups, resale shops, garage sales, online resale like Craigslist — you get the idea.

Look for travel deals

Search for off-peak season travel deals and flash sales, sometimes offering up to 50% off regular prices. Sign up for email alert deals, especially for your target travel destinations. Utilize a travel agent to keep an eye out for good deals in areas you’d like to visit.

Hit the road

Contemplate the idea of packing a tent and taking a road trip instead of flying. Are there friends you’d like to visit across the country? Compare Airbnb to hotels. If gas prices are low or you find an excellent deal on a rental car, you could save a bundle going this route. Whether staying in a hotel or crawling into a sleeping bag, you can certainly save money on food while traveling.

Saving money for vacation while living on a tight budget isn’t always easy, but with some creativity and reducing expenses, it can be accomplished.

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