Holidays are the reward for months of effort, your reward for a hard year of work that leaves a good taste in your mouth. How can you make them a good memory for your household budget as well? The key is to save up to travel, so that you don't have to dip into your savings to do so.
These are the steps and strategies you can implement:
Travel, an expense you can plan
Vacations are a predictable expense, not an unforeseen expense that you can't plan ahead for.
In fact, the best strategy for saving on travel is to plan it well in advance from one year to the next. In other words, as soon as you finish your summer vacation, start saving for the following year and the same with trips planned for key dates such as long weekends.
It is true that there may always be trips that were not in your plans, but even these can be planned with a portion of the annual budget specifically dedicated to travel.
How to save for vacations
What can you do to save for your vacation? The first thing is to know how much money you want or can spend , and the key here is “want,” because when planning, you are the one who decides what your base budget is.
In this sense, you don't have to set a destination from one year to the next . You'll have time to think about it! What you should do is think about how much you want to spend, what percentage of your annual budget your vacation will take up. When doing so, don't forget to include all the expenses of the trip. In addition to accommodation, also add transportation, meals, outings, gifts, excursions and other activities that you usually do.
This basic budget will help you create a monthly savings goal and get the capital you need. It is recommended that you leave a little margin so you can reach your goal with ease and also because during the trip unforeseen expenses may arise, such as, for example, currency exchange fees that you had not thought about.
Don't forget to check out different money-saving tips based on your destination and needs. Fortunately, there are now hundreds of travel blogs that compile guides to every destination you can imagine and how to save once you get there.
Among these ways to save there are tricks like:
• Have a list with different destinations and choose the cheapest one that year.
• Book your trip well in advance or do it at the last minute. You will save money with both, depending on whether you like to plan ahead or don't mind waiting until the end (be careful, because in this case you may not be able to choose your destination).
• Travel outside of peak season, as long as your work allows it.
• Eating at the destination outside the tourist areas.
• Take advantage of free tours in big cities.
• Be flexible with your departure and return dates. That is, don't plan your trip 100% in order to take advantage of flight deals.
How to raise the money you need
Finally, you will need to save up the money for your trip. The most effective way to do this is to save a portion of the capital each month. That is, if your base budget is 2,400 euros, you will need to save 200 euros per month.
Beyond the traditional formula, there are three other alternatives for establishing your travel budget:
• Use Harv Ecker's envelope method. More than a savings strategy for travel, it is a formula for managing your money and distributing your income. In a nutshell, it proposes dividing your income between your basic needs (55%), savings (10%), training (10%), long-term investments (10%), leisure (10%) and donations (5%) and depositing the corresponding part in a specific account or an envelope. Applied to vacations, it means setting aside that money monthly and putting it in an envelope, which is what you will use to pay for all your vacations. An alternative is the well-known 50-20-30 method.
• Use the 52-week challenge. This is one of the most popular savings challenges. It consists of saving each week the amount of euros for the week number of the year. So, in week 1 you will save 1 euro, in the second two euros and so on until you cover the 52 weeks in a year, when you will save 52 euros. At the end of the journey you will have 1,378 euros, which would be your budget for going on holiday.
• Limit yourself to your extra pay. This is another way to approach spending on vacation: budget your extra pay to match your extra pay. This strategy ensures that you have a limited budget and don't overspend on vacation.
In the end, saving on travel is a mix of planning and doing the math, just like saving when buying a house or choosing the right mortgage.
