Wanderlust: a strong longing for or impulse toward wandering or travel. If you’re like me, you’re always thinking of where you will travel to next. No matter how many deals you get or discounts you find, vacations cost money and the financial commitment is oftentimes the biggest deterrent for travel. While travel is a luxury, it is one that many people can afford through proper preparation. A trick to traveling stress-free is having a savings plan before you go, and not putting it all on credit to pay off later. Here are my tips for saving up for that next adventure.
1. Open up a savings account just for travel.
This may sound extreme, but it’s the best way to prioritize travel savings. Look for a savings account with no monthly fee, no or low requirement for a minimum balance, low or no monthly deposit requirement, and high interest rate so your money will grow. Online-only accounts usually offer higher interest rates and fewer fees because they don’t have the same overhead costs as banks with walk-in branches. I personally have used a Barclays US online savings account the last several years and have been really happy with it. Only take out money when you are going to make a travel purchase or pay off travel related expenses on your credit card, otherwise leave it alone!
2. Make an automatic monthly deposit into your travel savings account.
Instead of putting money in when you can, set up an automatic deposit into that account. If you already have a trip in mind, you can figure out how much your monthly contribution needs to be by dividing the estimated total trip cost by how many months until your trip. Don’t forget to budget for things you’ll want to buy in preparation for your trip (swimsuits maybe?) These expenses will otherwise sneak up on you. If you plan to take a $2,000 trip in a year and a half and are starting at $0, you’ll need to put in around $111 each month toward your goal in order for it to be fully funded by the time you go. If you don’t have a trip planned yet, figure out a reasonable amount you can put into the travel savings account each month, while still prioritizing paying your bills. That way when that unbelievably low priced flight comes up, you have money in the bank for it! Set up direct deposit with your employer so that amount gets deposited with each paycheck, or use a monthly automatic deposit from your checking account to your travel savings account.
3. Get a travel rewards credit card.
There are some great travel rewards cards out there so do your research to find the one that’s right for you. With the bonus points that many of them offer when you sign-up, you may be able to book a flight FOR FREE. I was able to book roundtrip tickets for my husband and I, Seattle to London, with sign-up bonus points from a travel rewards credit card alone! Make sure you understand how much you have to spend in a certain period of time in order to get those bonus points and make sure it's reasonable based on your upcoming expenses, and what the annual fee and interest rates are. It goes without saying but you should pay off your balance every month, and if you have trouble handling credit cards I would recommend just focusing on steps one and two. When used responsibly, travel reward credit cards can help you save while you spend!
If travel is a priority to you, following these three steps can help you take your dream vacation faster and minimize your financial stress. Comment below if you have any questions or share your own set of tips!