Roundup: 5 Smart Saving Tips for Your Summer Vacation

‘Tis the season of beach reads, palm trees and plenty of sunshine. We’re officially halfway through the dog days of summer, which means it’s time for you to start making headway on that travel bucket list (you know, the one you wrote while battling the winter blues).

But before you pack your bags and put those vacation days to good use, take a look at your finances. Nobody wants to come back from a summer cruise to a boatload of debt — and with a solid savings reserve and a budget in place, you don’t have to.

Here are five vacation planning tips to consider before making your great escape.

Smart Saving Tips Summer Vacation

1. Build a “vacation vault.”

If you’ve grappled with freezing temperatures and turbulent weather for most of the year, summer might mean the end of an extended hibernation for both your social calendar and your wallet. From weddings to sporting events to festivals, it’s easy to see why spending typically skyrockets in the summer months. Throw in a vacation, and you’ve got even more expenses to consider.

Jojo LiJojo Li, Associate Advisor in the Bay Area, says preparation is key to beating the summer spending drag, especially if you have a vacation in the works. “It’s easy to let your spending spiral out of control, especially when it comes to summer vacations,” she says. “And when it comes to money, disciplining yourself can be tough.”

That’s where a “vacation vault” can come in handy — a separate savings account dedicated entirely to travel expenses. Keeping your vacation savings away from your checking account (or the account you use for regular, day-to-day spending) can allow your funds to grow undisrupted.

logan-friedelIf you’re saving for a big, once-in-a-lifetime vacation that’s further down the road, Logan Freidel, Associate Advisor in Minneapolis, says you might consider a longer-term savings vehicle like a certificate of deposit (CD). Not only will a CD keep your vacation savings separate from your living expenses, it can also help your money “keep up with inflation and earn slight returns ahead of your trip,” he says.

2. Create a travel budget — and stick to it.

Okay, so the words “travel” and “budget” don’t exactly go hand-in-hand. After all, vacation is supposed to mean rest and relaxation; it’s a time to put all of your worries aside until you get back to reality. But just hear us out: embarking on a vacation with no defined budget in place is extremely risky. The last thing you want to do is overextend your savings and live outside of your means on vacation, only to return to a barren bank account and more money worries than you bargained for.

“When you’re starting to make vacation plans, ask yourself two questions: ‘how much will I need for this particular trip, and how much time do I have to save?’” suggests Logan. “Once you have the answers to those questions, you can develop an action plan that can ensure you’re saving enough to accomplish everything you want to do during your trip.” So if you are trekking out to the rainforest and planning to go zip lining, then be sure to build that into your budget well in advance. And don’t forget that you need to factor in the cost of transportation, food and lodging, too.

Derec MiedenAlso, keep in mind that you may need to sacrifice other vacation entertainment if your heart is set on big-ticket activities. “It’s important to be realistic,” says Derec Mieden, Associate Advisor in Wausau. “We all want to take that luxury, five-star vacation, but sometimes it just doesn’t fit into the budget.” Compare your budget to your vacation bucket list.
If zip lining trumps a pricey dinner at your resort’s world-famous restaurant, you may have to make a few sacrifices or simply save the fancy dinner for your next trip.

3. Make saving automatic.

You’ve got a separate account set aside for your vacation nest egg, and you’ve outlined your budget. So far, so good! Now, here comes the hard part: holding yourself accountable to the saving process.

Cassandra LatsiosThe solution? Make your paycheck do the work for you. “Set up a weekly or biweekly automatic transfer from your checking account to your vacation savings each pay period,” says Cassandra Latsios, Associate Advisor in the Eastern Region. “Even $25 or $50 every two weeks can go a long way toward reaching your goal, especially when you start in advance.
If you’re an avid traveler, you might even consider maintaining the automatic transfers for future trips, so you’re financially prepared for your next vacation before you even decide where you’d like to go.”

Noah MarellFinancial Advisor Noah Marell doesn’t just encourage this strategy; he even applies it to his own vacation savings. “When the travel bug bites, I have found that one of the best ways to make sure the funds are available is to automatically set aside a certain amount earmarked for vacations,” says Noah, who is based in Minneapolis. “A recurring deposit can be really helpful, but I recommend accruing these funds outside of your normal checking account so you’re less tempted to spend them.” Out of sight means out of mind.

4. Cut back now, splurge later.

Repeat after us: “good things come to those who wait.” Now make this your mantra for the weeks leading up to your vacation. “The biggest barriers to saving for your summer vacation will be your discretionary expenses,” says Derec. In other words, these are the simple, yet subtly dangerous splurges you could probably do without (think your morning trip to Starbucks or spontaneous meals out with friends).

If you feel yourself slipping on these expenses, think of it this way: you’re cutting back now so you can splurge on that jumbo margarita at the beach later on. Keep your eye on the prize, tighten your belt and put down the latte!

5. Be a thrifty traveler.

Whether you’re hitting Route 66 for a cross-country road trip or embarking on an extended excursion overseas, there are plenty of ways you can slash costs and still make your dream vacation a reality.

“Try utilizing discount travel sites when booking your accommodations, airfare and other necessities,” says Jojo. “Some of these websites allow you to name your own price on hotels and search for daily deals, which can help you find a nice place to stay without breaking the bank.” You can also score savings with other travel hacks, like booking your trip during the off-season, when prices may be lower; swapping the traditional chain hotel for a house rental (resources like Airbnb can be great for this); or balancing more expensive activities with a free walking tour.

You’ll feel much more relaxed on your summer getaway knowing your finances are in check, and you have enough cash to fund every item on your bucket list. Now set your out-of-office message and put your mind on autopilot — you deserve it!

 

Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional. Hewins does not provide tax, accounting or legal services.
OneBite Editorial Staff
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Roundup: 5 Smart Saving Tips for Your Summer Vacation

time to read: 5 min