By Vasco Dega
There’s nothing quite like dreaming up a luxury vacation. Whether you want to go to a tropical island somewhere and bask in the sun, or you’re passionate about a specific hobby and there are only certain places in the world to do it, there’s nothing wrong with planning your dream vacation.
But, the biggest hurdle people often run into is how they’re going to pay for it. Travel is expensive, there is no doubting that. But, it’s not impossible even when you want to go on a luxury trip while you’re on a budget.
As of 2019, global tourism was on the rise. While the COVID-19 pandemic may have changed everyone’s travel plans for the time being, it’s normal to feel like you want to get back out there in the world and experience a bit of freedom. The tourism industry will pick up again. When it does, you can be ready to take the trip of a lifetime.
So, use these three tips to start saving for your luxury vacation, wherever you want to go. In a short amount of time, you could be enjoying a drink with a little umbrella in it by the pool, or going on a heart-racing adventure that you’ll never forget.
1. Set a Goal
One of the first things you should do when you’re saving for a trip is to set a goal. How much do you want/need to save? That can be easier said than done, because most people don’t factor in everything they need to in order to create a realistic goal. Some things you need to research in order to get accurate estimates of how much it will cost include:
- Travel expenses (including airfare and any travel once you reach your destination)
- Tickets to events
- Rental equipment if you’re doing something physical
It’s also a good idea to have a “miscellaneous” category within your goal. Unexpected things happen in real life on a daily basis. They can happen just as easily when you’re on a trip. Having a bit of a “cushion” in your budget can help to alleviate stress.
Obviously, you won’t be able to know the exact cost of anything, so it’s better to overestimate. Once you have your financial goal in mind, create a budget that allows you to reach it. That might mean cutting back on a few “extra” things in your life right now so that money can go toward your trip. Think about how much you would like to save each month for the trip, and how long it will take you to reach your goal.
By having something to look forward to, you’re more likely to stay motivated about saving money. Each month when you see your goal getting closer, you can start to put plans in motion to turn your dream trip into a reality.
2. Open a Separate Bank Account
You might think opening a separate bank account is a hassle, but it can make a big difference in how easy it is to save for a big trip.
If you try putting all of the money you’re saving into your existing bank or savings account, it can be too tempting to use it for other things.
Another way to avoid using money from a separate account? Choose an online banking company, rather than a local bank. This will make it harder to get money out of the account on a regular basis, and far less tempting.
There are plenty of ways to add money to a new bank account. Not sure where to get started? Try some of these ideas:
- Set up an automated payment each month into the account from your existing bank
- Work a side hustle for some extra income
- Find ways to buy your favorite items at discounted prices, like on NetVoucherCodes.co.uk
- Gather your change at the end of each day and make a deposit when you reach a certain amount
- Use any extra money you get as a gift for your vacation fund
Will it be difficult to save away every extra ounce of money you receive for a few months? Yes. Things always come up. You might want to make a big purchase, or you might have to handle an emergency with your home that costs money. But, make a promise to yourself never to touch your vacation fund for those things. That’s why having it as its own separate entity makes such a big difference.
3. Pay Off Existing Debts
Nothing will hold you back from saving money quite like an outstanding debt. It doesn’t matter if you have student loans, personal loans, or credit card debt. Any kind of owed money can make you feel as though you can’t save for anything else.
And you’re right.
Any extra money you receive when you’re in debt should go toward paying off those debts. So, realistically, you shouldn’t start a ‘vacation fund’ until those debts are paid off. Not only is paying off your debts practical, but it will actually give you the opportunity to enjoy a luxury vacation. If you did manage to get away somewhere, knowing you had a mountain of debt waiting for you at home, you wouldn’t even be able to enjoy your time away.
There are many different ways to pay off debts. Some people use the snowball method of paying off their smallest debt first and then working toward the larger ones. Others use the avalanche methods of making payments toward the larger debt until it’s paid off, and trickling down from there.
Whatever the case, make paying off your debts a priority before you start focusing on your vacation goals. Doing so will give you a sense of freedom. By the time you have paid off your debts, you’ll have earned that trip!
Saving for a luxury vacation doesn’t have to be impossible, no matter what your current budget may be. Keep these tips in mind to make the saving process easy, and you might be surprised at how quickly you can reach your goal.