Working out how to save money for a trip can be an exciting and empowering process. Not only does it bring you closer to going on your dream vacation, but it also helps you create money-saving habits that can last you a lifetime.While thinking about how to save money for a trip during a global pandemic may seem a little weird, it actually has some unexpected benefits. For instance, giving yourself a fixed goal in such unstable times can become a great source of comfort. So, here’s how to start getting smart with your money so you can enjoy the trip of a lifetime in the (hopefully!) not so distant future.
How to save for your dream vacation
First things first, you need to work out how much your trip is going to cost. This means deciding two things: where you want to travel, and for how long. Once you’ve got this idea in mind, it’s time to get specific. This means creating a cost estimate for the following:- How much your airfare (there and back!) and your travel insurance will cost
- The price of your accommodation
- Your budget for food and drinks
- The cost of any activities and sight-seeing trips you want to take while there
- The amount you want to have stored in a travel emergency fund
Of course, you won’t be able to reach an exact amount, but you’ll get a good ballpark figure of what you’re aiming for. In general, it’s best to give yourself an extra buffer by assuming you’ll spend a little more than expected in all of these categories.
How much to save for a trip to Europe
If you’re planning a trip to a European country, in general, you should plan to spend around €1500 per month when there. Of course, this will vary, often quite dramatically, from country to country. While a week-long trip for two to Amsterdam will cost on average around €1800, a trip for two to Poland for a week will cost you around €800 (flights excluded). But remember—over-budgeting is always better than under-budgeting. There’s no greater cure for the post-vacation blues than returning home with some leftover cash that you can use to start saving for your next trip.
How to create a budget for your trip
Now that you know how much money you need to go on your trip, it’s time to create a budget. While budgeting may sound boring, it can be incredibly liberating. Understanding your cash flow and adapting it to match your needs creates a sense of financial independence that is especially valuable in uncertain times.
1. Track your spending
To start budgeting, you need to understand where your money is going each month. This means you need to start tracking your expenditures. Every single one. This requires making a note of all of your income streams when compared to all of your expenditures over a 30-day period. You could do this manually by checking your bank statements and entering these figures into a spreadsheet. Or, if that sounds like too much work, you could consider using a budgeting app.
2. Separate your expenses
For this next step, you need to separate your expenses into two categories: fixed and variable. Your fixed costs include all your expenditures that are more difficult to change. This comprises things such as your rent, debt repayments, and utility bills. Your variable costs, however, include anything you spend that is a little more adjustable. So, this category covers any subscription services (e.g,, Netflix, Spotify), all non-essential grocery shopping, and clothes shopping.
3. Cut back on your variable expenses
As your variable expenses are non-essential, they are by far the easier category to cut back on. There are several things you can do here. First, consider changing the way you shop for groceries to make some significant savings on your monthly food budget. This could mean making weekly meal plans so you can project your weekly food expenditure in advance, buying food in bulk, and avoiding shopping on an empty stomach.Next up, it’s time to cancel any unused subscription services, swap your mobile tariff to a cheaper plan, and get into the habit of buying new items second-hand. If you want to set yourself a challenge, try choosing a day each week where you commit to spending nothing (besides fixed costs). Those these savings might seem miniscule, collectively, they will add up.
4. Use a designated savings account
Once you start to free up some extra money each month, it’s important to put that money in a designated savings account. By separating your savings from your daily spending account, you prevent yourself from needlessly eating into your savings so you’re more likely to stay on-budget.An even better tip to filling up your savings? Automate a monthly transfer into your savings account. Once you know how much you want to put away each month, set up a monthly automated bank transfer that moves this amount into your savings account without you having to think about it.
5. Keep track of your budgeting goals
At the end of each month, it’s important to assess how easy—or difficult—it was to meet your budgeting targets. If you find that you’re struggling to meet your targets, you may need to reduce how much you save each month or identify an area where you could free up some extra money. If, however, you find you’re saving more than you planned, then adapt your budget to accommodate for this and try to save even more. The trick is to set a budgeting goal that is challenging enough to inspire you to be smart with your money, but not so difficult that it feels impossible and demotivates you from trying.
6. Stay motivated
One of the best features of working out how to save money for a trip is that you have an exciting, motivating end-goal to work toward. Though it’s also important to save up for an emergency fund or your pension, there’s no doubt that these are significantly less inspiring goals to work toward.As a result, you might find it useful to decorate your home with some visual aids to help you stay on track. For example, you could stick a photo of your holiday destination next to your computer, or you could use it as the background on your phone. Whenever you feel tempted to stray from your savings goals, you can use these images to help visualize yourself back on track.
