Sometimes we just need a break. Americans are some of the most stressed-out people in the world, and yet we don’t even take advantage of our PTO days! According to a survey from U.S. Travel, Oxford Economics, and Ipsos, Americans wasted 768 million vacation days during 2018, a 9% climb from 2017. In dollar terms, that’s equivalent to more than $60 billion in lost benefits.
Did you know a great tactic to ensuring you take your hard-earned PTO days is to save for a vacation? Some experts even say that there is more pleasure gained in advance of the time off than actually experiencing the trip! Planning a vacation has so many great benefits. We should all be intentional about taking vacations and saving for them in the right way.
The key to saving for a trip is to set aside a certain amount of money each paycheck to your carefully planned excursion. This way, you have bucketed out a portion of funds specifically designed for fun. That is more important than you think! While separating some money from other money doesn’t make sense ‘on a spreadsheet’, it helps us from a behavioral point of view. If we are not intentional about saving for a vacation, then we might never experience the fruits of our labor. That can have very negative mental health consequences.
Whether you plan on flying to an exotic beach, hitting the road on good ole Route 66, taking a cruise, or visiting a cool mountain cabin, here are good steps to take to help you plan your trip in a financially savvy way.
- Take a piece from each paycheck and deposit it into a separate account. You can watch it grow over the weeks and months before your vacation. You’ll also grow ever-more excited as your trip nears. You can open a high yield savings account or a money market account to earn a few extra dollars (or pennies) on your money.
- Be sure to have a target amount to save. It’s all about being intentional. If your goal is $2,000, then be sure to write that down and stick to the strategy. It’s almost like playing a game!
- Budget accordingly. How much will you spend on airfare? Gasoline? Hotels? Food? Jot these numbers down to so you have a ballpark on total costs.
- Consider a travel rewards credit card. Be careful venturing down this path, but there are many solid travel reward offers out there. If you are disciplined with your personal finances, this could be a good strategy to earn some good credit card benefits.
- Cut back on other areas of entertainment while you save. Maybe you want to put your savings into overdrive before your trip. Reducing your food & entertainment budget temporarily could help you hit your vacation savings target quicker.
- Investigate the best days and times to book a flight, cruise, and hotel (or Airbnb). Sometimes a little research goes a long way to scoring the best deals. Maybe even check to see if you can stay with friends or family instead of a costly hotel.
- Set up alerts for the best deals. You can use today’s technology to your advantage by setting up bells & whistles on travel websites and apps.
No matter how you save for a fun vacation, be sure to keep your retirement savings & investing strategy in place. Don’t shift around how much you are contributing to your 401(k) and IRA. Among the worst things you can do is reduce your retirement saving, and then never turn it back up. Vacations are important, but you want to be responsible with other areas of your financial plan.
Another idea – sometimes just doing something new where we currently live serves similar purposes as a vacation. Instead of going to the same reliable restaurant each week, try a different place – it will create a new, memorable experience. Also, mix it up by going out to eat at a different time and day. The more variety with which we spice up our life, the more stimulating our day-to-days are. It’s all about increasing happiness, and often we don’t need a lavish trip that costs thousands of dollars to do that. But who are we kidding, sometimes we just do!
Here’s the point
- Saving for a vacation needs to be an intentional plan – much like saving for retirement. If you just put it off for another day, years will go by with you just slaving away at your office.
- There are money-saving strategies for budgeting a trip. Just thinking about and planning for a vacation is most of the fun anyway!
- Keep your retirement savings and long-term financial plan on track while still enjoying a vacation.
Action items
- Take your vacation time. You’ve earned it, but so many American white-collar workers just let it go to waste because they think their job is so important that they have to be at the office all the time. It’s a sad trend that seems to be getting worse.
- Plan your vacation months in advance. Planning not only helps you budget and save accordingly, but science says there is a great deal of pleasure from looking forward to a fun trip more so than doing it on a whim.
- Sit down with TFC to help you ensure that you have a sound savings strategy. Having fun is a key piece of your long-term financial plan too!
Featured Photo: Image by Pikwizard