Everyone needs a break from the grind. Vacationing during the summer is a perfect way to unwind and recharge. Are you planning a summer getaway? You don’t have to break the bank to enjoy a great vacation. With a few simple steps, you can start saving for your next trip in no time.
While exploring your options when planning your next summer vacation, consider banking with a financial institution that helps put your money to work. The extra money you earn and save can go further in a savings account with a credit union. We’ll dive into the best practices for saving up for your next trip and how a credit union can get you there faster.
1. Start Budgeting Early
Setting a clear budget will help you understand how much money you need to save to cover the vacation and any household expenses while you are gone. If you know your destination, you can easily predict the cost of flights, lodging, and activities with a simple online search. If you are still determining where to go, estimate a budget and adjust once you narrow your choices.
Once you have a budget, start setting money aside from each paycheck. Determine how much you need to save monthly to meet your target goal. It may be helpful to set up automatic withdrawals so it directly transfers into the appropriate savings account.
The earlier you start planning, the more time you have to shop for the best deals. Plus, when planning early, you can take advantage of better prices before increased demand drives prices up. The closer you get to the intended travel date, the more your airfare or lodging may cost, as these prices tend to increase closer to the date. Save money by booking airfare and accommodations early.
2. Create a Vacation Fund Savings Account
Stay on track with your budget by opening a new savings account solely dedicated to your next trip. Opening a new account will help you stay organized and easily track how much you are saving and whether you are meeting your budget. It will also keep your vacation fund separate from other finances so you don’t accidentally spend trip money on incidentals.
Additionally, opening a new account allows you to shop around for an account with better interest rates and fewer and lower fees. With the proper savings account, you can build interest faster without losing money to unnecessary fees or penalties. That way, the money you put aside for your trip increases faster, saving you more money.
For the best savings, open your savings account with a credit union, such as Vermont Federal Credit Union. Savings accounts at credit unions offer higher yields on savings products with lower fees and little to no penalties. Since credit unions are member-owned and not-for-profit, any profit goes back to its members. When you open a savings account at a credit union, you keep what is yours. The money you save in fees and the extra interest earned can be directly invested into your vacation fund.
3. Apply for a Cash Back Credit Card
Once you’ve opened an account with your local credit union, take advantage of extra savings and apply for a cash-back rewards credit card. Use your card for regular purchases such as gas and groceries, then pay off the balance in full each month. When using this strategy, treat the credit card more like a debit card and only spend the money you have.
You can avoid paying interest and accumulating debt by paying your monthly balances on time and for the total balance due. You will start earning cash-back rewards without paying interest or fees. You can take the extra cash and deposit it in your vacation fund.
4. Look for Creative Ways to Earn Extra Income
Are there ways you can earn extra money before your trip? Pick up extra hours at work, take on an additional part-time job, temporarily rent a room in your house, or even downsize by selling second-hand items online or at a yard sale.
There are various ways to earn more income; don’t be afraid to get creative and explore all your options. If you have the time, you can do contract work remotely from home or start earning passive income. Unsure where to start? Look at your hobbies and skills. What are you good at, or what do you enjoy doing? Look for ways you can use your interests and abilities to fill a need and earn money.
5. Cut Back on Non-Essential Spending
One of the easiest ways to save money is by reducing your discretionary expenses. Discretionary expenses are all the costs related to purchases that are not essential in running your household. Entertainment such as movies, buying coffee out rather than making it at home, or dining at upscale restaurants are all examples of discretionary spending. Paying rent, utilities, and grocery shopping are all examples of non-discretionary or essential spending.
Look at your spending habits. Where can you cut back and save money? You don’t have to forgo luxury items forever; just long enough to create extra cash flow to save for your next trip. Plus, consider it as delayed spending rather than cutting out non-essentials entirely. Cutting back on luxuries now means you can indulge more later while vacationing.
Start saving for your next adventure with as little as $5 and open a savings account at Vermont Federal Credit Union. With innovative products and services, the latest technology, and easy-to-access accounts, they can satisfy your banking needs at every step of your journey. Become a member today and plan your dream getaway.
With the right strategies, you can put aside enough for the destinations you’ve been dreaming of while still affording essentials back home.
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