Tips for Funding and Saving on a Vacation

[J.J. Montanaro USAA]

Excitement and anxiety. As we map out our vacation plans for 2022 and beyond, there’s a curious mix of both. Can you Imagine a vacation without kids? We’ve got two planned for 2022, which makes this a watershed year. In any case, when you add in the financial dynamic, both emotions are understandable. However, with a little prep, hard work and discipline, you should be able to experience the excitement and leave the worry behind.  

Vacations can be a bit tricky, though. Just when you think you’ve got it all covered – bam! – another expense hits you head-on. That’s why I decided to break my tips into two distinct “financial phases,” saving for and saving on your next vacation(s). 

The “s” is intentional, as if you’re like us, you may have more than one in the hopper. For example, this year we will make our first trip to the Emerald Isle, but we will also head home to Kansas City, and we are planning for a big trip in a couple years.  So, this summer we will be working both savings ends of a vacation. That leads me to a few tips on saving for your upcoming vacation: 

You don’t need a destination to get started.

The point of saving for your vacation is to have the money necessary to take that vacation without having to hawk all your furniture, rent out the kids(?), or more likely use a credit card to make the trip. I’d encourage you to build a line item in your budget where you regularly and systematically set aside money specifically for vacations. We continuously direct  money to a “vacation fund” even when we haven’t settled on a destination.     

You do need a home.

No, not the roof over your head, I’m talking about a place for your vacation savings. Consider setting up a separate savings account for the money you do save. Unless you are saving for a vacation you are planning three-plus years in the future, you should consider a plain-vanilla safe, stable and accessible savings account. Sure, shop for a good rate, but there’s no reason to invest and take on unnecessary risk when you should be saving.  

It should be in your face.

While we saved a bit each paycheck, our efforts really took off – we saved some big chunks when it was available – once we named our savings account “river cruise fund.” If you’ve got more than one vacation idea, set up multiple savings accounts and name them all. Naming the account makes it a tangible goal and a place where you will want to put money, not pull it. Photos, screen savers or other reminders can motivate you, too. 

Go big, so you don’t have to go home.

One of the coolest things (relative to funding a vacation, but well behind a lot of other life experiences) is to finish your vacation with a zero balance and money left over … that you can roll to your next adventure. My point? Do a little research and set your savings goals properly and if you’re going to make an error, better to end up with too much than too little. 

Next up, let’s shift our focus to saving on your next vacation. These are all-purpose tips to help ensure you end up in the enviable position of finishing your vacation with a surplus. These tips are designed to keep your trip fun even when being frugal.  

Take advantage of trusted partners.

Morale, Welfare & Recreation opportunities, Armed Forces Vacation Club, USAA’s Member Travel Privileges and Armed Forces Recreation Centers are examples of a few of the military- and veteran-oriented resources you can tap into as you look for good value. If the situation is right, they can all help you save some serious dough.  Of course, no matter where you’re shopping, make sure you always ask for a military discount.  

Take advantage of on-the-fly opportunities.

We have always been planners. So, the whole “save for” idea resonates with my wife and me. On the other hand, we have always been a bit envious of some of the deals friends have gotten by waiting until the last minute. They’ve taken last-minute cruises, flown to $50 destinations and filled empty seats for a fraction of what we would have paid. If you can block the time and hold off on the destination, letting the best deal point the way, you may be able to do a lot more for less.  

Enjoy the local cuisine.

For many folks, eating out is already a huge expense and big money waster at home, so being cost-effective on vacation can be even tougher.  But don’t let the bright lights of a new town throw you off your game. Instead, pack snacks for the theme park or other tourist destinations. When you do eat out, drink water and skip dessert. And remember, there’s nothing wrong with hitting the local grocery store and picking up the makings for some brown bag lunches.  

Test the town.

We all love to be entertained! But it can get expensive quickly. It’s imperative to do research in advance. Look online for coupons or military discounts for cheaper access, but read all the fine print. Is there something you want to do that doesn’t carry that big price tag? For example, a local museum may be a lot of fun (and free!) and, at the same time, give you another perspective on that locale! You can take that brown bag lunch to a local park and win on two fronts. You don’t need to fork out a lot of cash to enjoy your vacation. 

Skip the souvenirs.

Speaking of dishing out a lot of cash. From the $25 T-shirt (that might be worn  

twice more) to the soon-to-be-broken key chain, save your money. Consider taking family photos or shooting a video record of the trip instead and encourage the kids or grandkids to write a daily journal. These types of keepsakes can truly capture the moment and last a lifetime.   

Saving for and on your next vacation can result in an unforgettable getaway without leaving you in a financial bind.  Share what has worked for you in the comments! 

About the Blogger: JJ Montanaro is a Certified Financial Planner® professional and part of the Military Affairs team at USAA. He’s a graduate of the U.S. Military Academy and has over 20 years of financial planning experience. 

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