Vacation Savings Strategies

By Michele Blandino

Taking a family vacation is turning into a costly proposition. According to information collected by the American Automobile Association, the typical family of four can expect to pay an average of $235 per day for food and lodging.

With most vacations lasting one week, this amounts to a little over $1600. When you add the cost of transportation and entertainment, the total cost of your vacation could be $3000 or more.

Given the ever-increasing price tag of a week away, many families are turning to credit cards to finance their vacations. Fortunately, there are ways to avoid this. While it may be too late for this year’s vacation season, by starting a vacation savings plan now, you should have more than enough money set aside by the time next year’s trip rolls around. Here are some ideas for getting your vacation fund started:

Eliminate Some Luxuries

Many people are surprised to learn that by simply eliminating their morning coffee stop, they can save approximately $10 each week. That’s over $500 per year. Suggest to your kids that they find ways to save money as well, perhaps by eliminating one trip to the movies each month or giving up fast food. Put the money you save aside – perhaps in a jar where you and your kids can see the savings grow. You can also save a few dollars each week by eliminating some costly snack items such as potato chips and ice cream from your shopping list. In addition to being able to add $5 - $10 each week to your vacation fund, you will probably find that you will lose a few pounds in the process.

Open a Vacation Club

Some banks offer savings plans, called clubs, to help people save money. While the most popular version of this is the Christmas club, many banks also have Vacation clubs which allows members to save toward a vacation. The process is fairly simple; you make weekly payments into an account (the amount of your payment will depend upon the total amount you would like to save) and after a specified period of time – usually one year – you receive a check for the total amount of your deposit. In some cases, you might also receive a nominal amount of interest. Because savings clubs are not as popular as they once were, you may need to inquire with several banks before you find one that has this type of arrangement.

Payroll Deduction

If you cannot find a bank that offers a Vacation Club, ask your employer if it is possible for them to make a regular “vacation” deduction from your paycheck. These funds can then be placed into a bank account via direct deposit. The amount deducted does not have to be large - a $20 weekly deduction will net you $1,000 after one year – any amount saved is better than having to charge the entire vacation.

Pocket Change

Make it a weekly habit to empty your pockets or wallet of loose change and place it in a jar; you will be surprised at how fast it will accumulate.

Saving for a vacation does not necessarily mean that you have to make wide-spread tradeoffs. With some careful planning and a few sacrifices, you should be able to save the money you need to make your vacation a memorable one.