5 Ways to Save Money for Your Next Vacation

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You don’t have to luck into a bundle of cash to pay for a vacation. Here are five easy steps you can take to build a proper vacation fund. 

Earlier this year, IPX 1031 surveyed Americans to see if they plan to take a vacation. Of those surveyed, 90% answered with a resounding “yes.” Trips varied in scope, but 9 out of 10 said they plan to go somewhere.

Here’s the rub: Around the same time IPX 1031 conducted its survey, LendingClub released a report stating that 60% of U.S. adults, including more than 4 in 10 high-income consumers, live paycheck to paycheck. Practically speaking, it may be challenging for some living paycheck to paycheck to come up with the funds needed to get away for a while.

If you’re among those who long to hit the open road but are just making ends meet, these five ideas may help.

1. Automate savings

The majority of us opt for immediate gratification. When offered a choice, we immediately do (or buy) the thing that provides satisfaction. Psychologists call it “present bias.” In other words, we are biased toward our present selves and likely to make choices that will benefit us at the moment.

Let’s say there’s a choice between going out for a great dinner tonight or using the money we would have spent to open a holiday savings account. Even though we know we’ll wish we had that holiday account when December rolls around, our present bias pushes us to go out and have fun instead.

The best way to overcome present bias is to remove the temptation. Go over your monthly budget with a fine-toothed comb, looking for any expenses you can live without. The lowest-hanging fruit tends to be things like gym memberships that are rarely used and subscriptions you’ve forgotten you’re still paying for.

Once you decide how much you can cut, ensure the funds go directly into your vacation savings. Here are two ways to have money automatically deposited into your savings account:

If you use direct deposit for your paychecks, update how the deposits are made. Financial institutions have made it easy by allowing you to request a “split” each time your check is deposited. For example, if you usually have $2,500 deposited into your checking account and your budget shows you can spare $100, split the deposit, with $2,400 going into checking and $100 into savings.Another easy way to move money into savings without lifting a finger is to set up automatic deposits from checking to savings. For example, if you’re paid every two weeks, set up a transfer the day after each deposit hits your account. The money never passes through your hands, making it less likely that you’ll spend it.

2. Stop loaning the government money

The average tax refund for 2022 was $3,028. If you regularly receive a federal tax refund, ask yourself why. Why are you loaning your hard-earned money to the federal government, free of charge? Unless you have a good reason for doing so, now may be the time to raise the number of deductions you claim.

If your refund runs around $3,000 yearly, that’s an extra $250 per month that could go into your vacation fund instead of sitting in government coffers.

3. Save on energy bills

If your bills are shockingly high right now, you’re not alone. It’s been a wickedly hot summer. Still, there are easy things you can do that cost next to nothing but will positively impact how much energy you’re using and how much you’re paying for utilities each month. These include cleaning your air filters and changing the type of lightbulbs you use.

Even if your monthly utility bills drop by $50, that’s an extra $600 per year toward your next vacation.

4. Buy generic

You can save about 40% on average by purchasing generic and store-brand groceries rather than name-brands. The trick is to conduct comparison tests. Each week, buy one or two new generic items and compare them against the brands you’re accustomed to buying.

It may be food, cleaning supplies, cat litter, or any other generic or store-brand label product. Whatever you purchase, take it home and give it a fair chance. For example, you may find that your kids enjoy store-label corn chips more than the name brand or that you can’t distinguish between a generic paper towel and a paper towel from a package with an uber-attractive lumberjack on the front.

If buying generic saves you even $10 per week, that’s an extra $520 per year toward vacation.

5. Look for money in the nooks and crannies

Like throwing coins into a jar, we often give little thought to small amounts of money. Why not gather those small piles of money together to see how much you end up with?

Unclaimed property

Across the U.S., more than $20 billion is waiting to be claimed by folks who may not even know they’re owed unclaimed property. Unclaimed property can include uncashed paychecks, refunds, deposit returns, abandoned bank accounts, and other valuable assets.

To learn if there’s any money out there, just waiting for you to claim it, go to unclaimed.org. Once there, you’ll be directed to your state’s website. The entire process will take minutes but may be well worth your time.

Online payment apps

If you have accounts with PayPal, Venmo, or any other online or app-based payment service, check to see if there’s any money sitting in one of those accounts.

Credit card points

Set aside a few minutes to log into your credit card accounts. Once you’re in, check how much you’re owed in cash back and travel points. Any money back you’re due can go directly toward covering the cost of vacation, and travel points may be enough to reduce the price you pay for travel and lodging.

While we’re on the subject of travel points, paying for everything — from utilities to groceries — with a travel rewards card will speed up how long it takes you to build points. The important trick here is to pay the credit card off in full at least once a month (more often if it’s easier to remember).

Return unwanted items

If you have a collection of items you’ve meant to return for a refund, pick a day when you can get it done in one fell swoop. Then, go by stores, to the post office, UPS, or wherever else you may need to return the items. All those items that have been building up are suddenly transformed into cash for vacation.

While you’re at it, have a garage sale or use a grocery app to snag the lowest price on food in your area. Try a gas app to quickly locate which gas station has the lowest price per gallon. None of these suggestions alone are likely to bring in enough money to cover your entire trip, but together, they can make a huge dent.

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