Want to see the world but don’t feel like your paychecks are big enough to foot the bill? While you might not have the money in the bank to buy a plane ticket right now, there’s a habit you can set up that will make it possible to take all the vacations you dream of! It’s starting a travel savings account, and it’s effortless to get started.
A travel savings account is the foundation you need to ensure you can incorporate travel into your lifestyle and only requires small, consistent contributions to really add up!
Benefits of a Travel Savings Account
A travel savings account doesn’t have any special qualities about it in regards to travel. It’s simply a dedicated savings account earmarked for travel expenses that you can use to make saving feel more attractive and tangible.
It’s a great way to see visible progress, which for some people, is motivation enough to keep them going! It keeps it separate from your other savings goals, allowing you to feel instant satisfaction when you make another deposit into your travel-specific savings account.
It also allows you to avoid dipping into your other savings accounts for travel-related things. Rather than take from your emergency savings fund, you should fund purchases like plane tickets and hotels with your travel account so you can maintain the much-needed safety net.
It’s also a great way to avoid the dreaded vacation debt. It could be used as a fund to draw from once you’re already on vacation rather than what you use to make the reservations, allowing you to spend with less discretion and truly enjoy your time.
How to Start a Travel Savings Account
Follow these five easy steps to get yourself set up for the future.
Step 1: Open the Right Bank Account
First, you want to open the right account. Travel bank accounts come in all shapes and sizes, but to get the most bang for your buck, opt for a high-yield savings account that will slowly grow over time based on your interest rate and account balance.
Be sure it’s not an account that will cost you anything to open. You should only be earning, not spending here!
Step 2: Calculate Your Financial Goals
Next, calculate your financial goals so you can have a better idea of how much to put into your travel savings account each month. Do you want to save up $1k per year for a nice weekend getaway, or are you saving for a lavish $10k honeymoon?
Create a financial goal first, and then you can work your travel plans into it.
Step 3: Determine Your Travel Goal
Next, find a travel goal that fits within a realistic financial goal. If your goal is to save $15k for your honeymoon, then perhaps your travel goal is a first-class trip to Thailand and staying at all 5-star hotels.
If your goal is smaller, find a travel goal that is reasonable, so you don’t find yourself disappointed by aiming for a luxury trip on a more frugal budget. All travel is enjoyable, but it’s all about setting expectations.
Don’t know where to start? Do some research, go on Pinterest, and explore areas you’ve always been curious about. See how safe it is to travel there, how far the dollar goes there, and what kind of culture and activities you can expect there.
Find something you’re excited about, and it will make all the savings and sacrifice worth it.
Step 4: Create a Plan to Add to Your Savings
Now that you know what kind of travel you’re working towards and what kind of financial goal you need to meet to achieve that, you can develop a system to continuously add to your travel savings.
The best way to do this is through automatic withdrawals. You can set it up so that your regular checking account pays out $200 from each paycheck toward your travel savings account or have a one-time monthly withdrawal you can count on.
You can also add more here and there as it is comfortable for you, but finding a savings plan you can stick with will serve you better over time.
Step 5: Regularly Track Your Progress
You don’t want to open and then immediately ignore your travel savings account once you have your automatic deposits set up.
Regularly check in on your account so you can see the progress as it happens. You’ll be delighted to see how compound interest can add up, contributing to your financial goal over time without taking more from your pockets.
How to Save More for Travel
There are a few great strategies you can use to save more for travel beyond your standard monthly contribution. If you have unaccounted money at the end of the month and all your savings goals have been met, transfer the additional funds you have into your travel account.
You can also use gifts, such as from birthdays or holidays, as part of a greater gift of travel to yourself by adding them to your travel fund rather than spending them on something more immediate.
Consider working a part-time job and dedicating all of the money earned there to your travels. Knowing the money isn’t going to pay for bills but something exciting instead is often enough motivation to pick up these extra hours.
Be sure you’re saving with a high-yield savings account, especially if you have a lot of money in your travel savings account. These accounts will earn interest, and the more you have, the more you stand to earn. If your money is sitting in a standard account, it won’t grow on its own without you adding to it.
Try a no-spend freeze for one week each month or one or two days per week. Reigning in your spending a bit here and there can go a long way to create more saving opportunities.
Final Thoughts – Starting A Travel Savings Account
If you want to see the world, a travel savings account should be your best friend. It’s a dedicated space for you to save money only for travel, and it can make the journey a more exciting one. All it takes is a little motivation to get started, finding the right savings account to use, and a consistent system you can count on.