How to Save Money for Travel

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Contributor, Benzinga
July 27, 2023

Whether you're throwing together one last road trip with your college pals or scheduling a family week in Florida, there’s no question about it: you're going to need money to fund a vacation.

Wondering how you’ll be able to save up enough money to go? We've put together this helpful step-by-step guide so you can determine the best way to save for a memorable trip.

Main Takeaways: How to Save Money for Travel

  • Step 1: Figure out total costs. Based on where you're going, how much it costs to get there, living accommodations, food, and more figure out how much your trip is going to cost.
  • Step 2: Determine your saving goals. From the number in step 1, work out how long it will take you to save the amount you need.
  • Step 3: Begin saving and adjust your methods. Below, we explore methods that allow you to budget and save for vacation. Read on to learn ways to fund your getaway.

Step 1: Determine Your Travel Costs

Wherever you decide to escape your every day, it's important that your budget remains firmly planted in reality. You don't want to return home and spend the next 5 years fretting over credit card bills from a short vacation. Research your travel costs as soon as you know when you plan to go on vacation.

Here are some tips you can use to research the cost of your trip and maximize your savings:

Skip the travel agent

You've seen the commercials for all of the travel sites, so pit those sites against each other to determine the best deals. Check out:

  • Kayak.com: Searches hundreds of travel websites to find the best deals.
  • Trevago.com: Compares hotel prices worldwide.
  • AirBNB.com: Finds vacation rentals pretty much everywhere.

At the same time, some travel agents can build a dream trip at no cost to you, depending on their affiliations. Budget travel to popular Florida theme parks is often handled by no-fee agents, allowing you to put more money back in your travel budget.

Stay with friends 

Do you have friends and/or family near your destination? Would they be willing to let you spend a few free nights in the guest room? Your friends’ old futon doesn’t even have to be your final destination. You can stop at their home in Atlanta for the night if you’re headed for Key West.

Plus, you an schedule your plane tickets in such a way that your friends can pick you up. You avoid both the cost of a hotel room and a rideshares, rental cars or taxi rides.

Be strategic about airline tickets

Buy your airline tickets on a Sunday at least 3 weeks before you plan to travel. That's now the cheapest day to buy. You can use a flight tracker like Google Flights to track your flights, which will notify you whether flight prices go up and down. 

Also, keep your travel dates flexible. If you're willing to fly standby, ticket prices come down dramatically. Your travel experience can actually improve when you’re flying creatively

Get the lowdown on car insurance

Before you pay for extra car insurance when you pick up a rental car, check with your car insurance company to see if you’re covered. Don’t forget to check with your credit card company, too. Both could cover you in the event of an accident.

Get your budget in check 

Peace of mind on your vacation is important, so getting your budget right ensures there will be very few surprises to disrupt your chi. Be sure your budget includes the following:

  • Airfare
  • Car rental/ground transportation
  • Gas prices
  • Luggage fees
  • Meals
  • Snacks
  • Hotel rates
  • Activity costs
  • Passport and/or visa
  • Travel insurance

Check out Benzinga's top picks for the best budget apps to help you stick to your vacation spending.

  • securely through Mint's website
    securely through Mint's website
    Best For:
    Budgeting
    Rating:
  • securely through Empower | Budget App's website
    securely through Empower | Budget App's website
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    Virtual Financial Assistance
    Rating:
  • securely through Digit's website
    securely through Digit's website
    Best For:
    Building Savings
    Rating:

Step 2: Figure Out How Much You Need to Save

Travel costs will vary depending on where you choose to let loose. Obviously, there will be a difference in price whether you choose to vacation in Fiji or wander in Wisconsin. Just to give you an idea, the average American spends over $1,100 per person, or nearly $5,000 for a family of 4, on a typical vacation.

Use a vacation financial calculator that asks all the right questions to ensure that you've planned your trip down to the dollar:

  • Airfare
  • Meal costs
  • Car rental
  • Clothes
  • Tour(s)
  • Fuel costs
  • Travel insurance
  • Pet sitting
  • Babysitting 
  • Activities

The question is, where do you want to go and how much are you willing to spend? Just for the sake of comparison and to whet your appetite for a fabulous trip, here are average vacation costs per destination:

  • Around the world in a year: $25,000 to $30,000 per person on the cheap end
  • African photo safari: $3,000 per person per night
  • Europe on a budget: $3,960

Step 3: Start Saving Your Money

You can combine a couple of savings methods to plan your trip of a lifetime.

First, determine the amount you'll need to save for your vacation and subtract the money you currently have saved (and are willing to spend) from the total cost of the vacation.

Next, decide which strategies will work for you. In general, they break down into two categories: How much you’ll save and how much you’ll spend. 

Develop good savings habits

Like anything worth doing, saving money is best developed into a regular habit. This is one habit best picked up early.

  • Get direct deposit: It’s time to sign up. Direct 90% of your paycheck into checking and the remaining 10% into a savings account. Do your research and open accounts at a bank offering free or no-fee checking.
  • Save your change: Save your spare change in a coffee can or a 5-gallon water jug. Don't touch the money until the receptacle is full.
  • Pack your lunch: Sure, it's more fun to go out, but the cost of a meal and a couple of drinks adds up.
  • Look for savings in healthy places: Quit smoking for a way to save you over $2,300 per year. That's a vacation right there! 
  • Round up your change: Bank of America's Keep the Change Program allows you to round your change up to the nearest dollar and stick the remaining into an account. For example, if you spend $19.51 on your debit card, the bank automatically rounds up to $20 and deposits $0.49 in your savings account.

Best Savings Account for Travelers

  • Best for Travelers Who Need to Save: Bask Bank
  • Best for No Maintenance or Service Fees: UFB Direct
  • Best for Savings and Money Market Accounts: CIT Bank
  • securely through Bask Bank Savings's website
    securely through Bask Bank Savings's website
    Best For:
    Travelers Who Need to Save
    Rating:
  • securely through UFB Direct Savings Account's website
    securely through UFB Direct Savings Account's website
    Best For:
    No Maintence or Service Fees
    Rating:
  • securely through CIT Bank Savings's website
    securely through CIT Bank Savings's website
    Best For:
    Savings and Money Market Accounts
    Rating:

Keep in mind that everything from world travel to quick jaunt will cost money, and your travel plans can be ruined if you haven’t saved enough money. You could use loyalty programs from credit cards (mentioned below), and you might also save with a high yield savings account that could have travel benefits of its own.

For example, Bask Bank allows you to earn American Airlines points along with saving money. You can mix a savings account with other options to travel goal, but should choose a cash management account that makes it easy to access your funds.

Develop better spending habits

If you’re saving, you might as well check your spending habits, too. You can learn from a travel blog, watch videos, carry your own water bottle wherever you go, use GasBuddy to save on road trips, collect travel tips and carefully monitor your travel budget.

  • Shop for value: Buying the cheapest products doesn't necessarily mean you're getting the best value. For example, you could purchase a high-quality pair of shoes that lasts a year. Or you could spend $30 on a pair that only lasts 6 months. In a single year, you would not only have saved $10, but you'd be wearing a nicer pair of shoes.
  • Ask about sales: Retailers have sales all the time. You can buy a new shirt today that goes on sale for 25% next week.
  • Beat the competition: Hyper-competitive businesses are generally willing to undercut their competition. If the store doesn't advertise, it can't hurt to ask.
  • Cut coupons: Your neighborhood weekly newspaper and value pack mailers are still great sources for coupons to save you money on the products you want.  
  • Use promo codes: Sites like RetailMeNot and Roblox scour the web for deals to share. Both websites have apps you can use to determine where you can get the best deal on what you want before you buy.
  • Use browser extensions: Enjoy savings up to 20% and get promo codes when you make a purchase with extensions like Honey and Piggy. Even if you buy a product on Amazon, these extensions will run through available promo codes and automatically insert the best promo code in your shopping cart.
  • Use credit cards to your advantage: Try to get a card that offers reward points in airline mileage. Use this card for your regular spending and pay it off at the end of each month and watch the free miles add up.
  • Save money on car insurance: As the commercial says, spend 15 minutes to see if you can save money on your car insurance. Even if you keep your current insurance company, ask your representative if any minor changes to your policy could produce major savings.
  • Determine a short term investment: What short term investment makes sense for your vacation savings? Check out Benzinga’s guide to short term investing for more information.

Best Credit Cards for Travelers

Credit cards for travelers offer rewards that can be converted into airline miles, hotel stays, rental car credits and much more. You can even use a travel credit card to get extra rental car insurance, protect those concert tickets you bought or get special discounts on attractions wherever you’re going.

Also, if you use a card that’s part of a loyalty program with travel benefits, remember that you should look into the specific benefits you get, blackout periods, restrictions, etc. If you don’t read the fine print, you might be disappointed.

Step 4: Monitor Your Progress and Make Adjustments

Even the best-laid plans should be evaluated regularly. Circumstances change. Prices change. Travel partners turn reclusive. At the end of each month, check your bank balance to take the temperature of your savings account.

Use an expense tracker app such as Mint.com to monitor your spending and expenses. At the end of each month, you should see where you need to spend less money.

Watch your expenses carefully. If you know how you're spending, you'll know where to trim your budget.

Fund Your Dream Vacation

Great vacations aren't cheap. Even staycations cost money. With discipline and regular oversight, the vacation of your dreams is within reach. Of course, the bigger the vacation, the bigger the price tag.

Depending on your income, it may take you a while to sock away the cash to do your plans justice. But if you dream big and stick to the fundamentals of savings and spending, the planet can be your playground.

Bon voyage!

Looking to spend wisely this next vacation? Check out Benzinga's resource on buying travel insurance.

Frequently Asked Questions

Q

Can you use a savings account for travel?

A

Yes, a savings account is a good way to put money away for travel expenses, but you should try to find a savings account with a high APY that gives you the best possible returns.

Q

Do you need travel insurance?

A

Travel insurance is a good investment for more travelers, but you should work with an agent who can help you find the best policy for your journey.

Q

Can you save money on travel with a credit card?

A

There are credit cards that can help you save money for travel, but you should choose cards that focus on travel rewards, savings and perks.