Saving up to travel might seem daunting, especially if you dream of a month-long vacation down by the Amalfi Coast in Southern Italy. But saving money shouldn’t be a drag. Here are some ways that you can save without needing to lock yourself up in your room and cut up your credit cards.
What kind of travelling do you want to do?
Before we start talking about how to save money, we should identify what the ideal holiday looks like. Let’s face it. Saving for a short getaway to Vietnam would be totally different from saving for a trip to Switzerland. So first things first, choose the country you want to visit.
Need some inspiration on where to head to? How about heading to bubble tea land, Taiwan, or maybe you’re craving some In-N-Out burger in Los Angeles, fancy some crumpets and tea in the UK? No matter the location, be sure to pick one that will not burn a hole in your wallet – or one that would take years to save up for.
How long do you want to travel for?
Then, decide how long you want to escape from reality go on vacation. If you have enough leave days, you can choose whenever to jet off, but if you need to be strategic with your leave days, check out our guide to maximise your holidays in 2024!
Who do you want to travel with?
This might seem like an odd question to ask yourself, but it is important. If you had a friend who is a little more liberal in their spending, you might catch yourself spending more than you originally planned.
Fighting with a friend on a trip is the last thing we want. So set expectations with your travel buddy so you’re on the same page on your spending expectations.
Share what you are willing to spend money on when it comes to travelling – like spending on experiences over shopping.
There is no hard and fast rule on how much money you should save before you travel. As I mentioned, it highly depends on where you are going and how long you plan to vacation.
Ask yourself these questions before embarking on your next adventure:
- Where are you travelling to?
- How long do you plan to travel for?
- How much will flight tickets cost?
- How much will you need for accommodation daily?
- How much will you need for food daily?
- How much will you need for transportation daily?
From there, you should have a good gauge of how much you would need to allocate toward your vacation.
The age-old question. With inflation and rising costs of daily necessities, saving money is not as simple as putting it in a tin box and praying that it multiplies. And while savings accounts can promise you generous returns, they typically benefit from being left alone for a few years – not the best to store your travel fund.
Here are a few money tips for setting aside that travel fund.
1. Start budgeting
If you wonder how much of your salary you should save, it might be time to start a budget. Here are two popular ones:
Zero-based budget: Simply put, this budget ensures that you balance your expenses by the end of the month. You would allocate a fixed amount to each of your needs and wants, as well as savings, investments or any debt repayment.
This budgeting practice is perfect for those whose spending might not be similar month on month. The flexibility will allow you to allocate savings where possible to your travel fund without stressing out too much about it.
50/30/20 budget: Probably one of the more popular budget techniques, this budget is where 50% of your monthly budget is allocated to needs, 30% toward wants and 20% toward savings or investments.
This budgeting practice works for those that need a strict budget to keep them on track.
2. Use a high-interest savings account
I know, I know. I just said savings accounts reap better benefits when you leave your money in for longer, but GXS Bank is different. Unlike typical banks, GXS Bank is a digital bank that allows you to save for your different money goals using pockets. The best part? Each pocket can offer interest of up to 2.68% p.a.
Being able to categorise your dollar goals and earn a whopping 2.68% interest rate makes saving for your next getaway even easier. Splitting your savings visually and seeing it grow daily – yes interest is calculated daily – could motivate you to hit your goals early.
There is no lock-in period or penalties, making it easy for you to withdraw your money to book that flight ticket.
GXS Bank is currently on an invite-only basis for their savings plan, so be sure to add yourself to the waitlist to start saving big.
Flights are typically the biggest expense you will incur when travelling. So how about scoring a free flight? Well, technically.
Using a credit card that rewards each spend with miles is one way to get flights for “free”. Discover these awesome cards that turbocharge your spending and pave the way to your vacation destination!
4. Marie Kondo your room
Often, we hold onto things that we think we might need in the future – and most of the time, it collects dust. Listing your underutilised items on Carousell is a great way to clear your clutter while earning some cash.
5. Cut entertainment costs
While it is all fine and dandy to grab a quick drink with colleagues after work, beer costs add up. Especially when you are saving for a trip, money spent on overpriced alcohol can be saved up instead.
Have friends over at your place, or pick more economical options when meeting your pals for a catch-up. Remember, delayed gratification is the game here.
Falling sick or getting injured is the last thing you want on your trip, but it’s made even worse if you have to fork out the money to pay for it. Before you embark on your trip, travel insurance is an important aspect of travel that should not be neglected.
Travelling is a great way to escape the hustle and bustle of everyday life. But it shouldn’t leave you in a worse financial situation.
Create a budget for your travels and allocate a buffer for unexpected expenses during your trip. Travel within your means so you can travel with peace of mind.
This article was originally published in SingSaver. SingSaver is a personal finance comparison platform that allows users to easily compare credit cards, personal loans, and insurance for free, while helping empower people to lead healthier financial lives through increased financial literacy.