This winter has been especially cold, with several cities seeing the coldest temperatures in nearly two decades. Most of us would love to leave the cold weather behind and plan a vacation to a warmer climate. In fact, it’s tempting to throw all caution to the wind — simply quit your job and move to the Caribbean. You could probably leave tomorrow if you wanted, but since that isn’t practical, and planning a vacation in advance is, let’s start there.
Most of us need to take time off from work in advance, and also save money for a while before we head off. Conveniently, tax returns are on their way to many of us. However, just in case your tax return is already going elsewhere — or you need more than you are going to get back — here are some smart ways to start your savings now.
1. Open a Savings Account Solely for Your Vacation
This is easy, often free, and probably the most important thing you can do in order to start saving for your vacation. It is so easy to say we want to save, but when all of our money is in one account, it seems to disappear more quickly (and often without us remembering where it went.) If you open a savings account and dedicate it to just your vacation, you will easily be able to keep track of how much you save without accidentally using the money for something else. If you want to make your savings account especially efficient, sign up for automatic deductions as well. This, too, will help you stay on track with your savings.
How much you need to put in each pay period will depend on where you want to go and how many people will accompany you. According to Financial Wisdom, you will need to save $205 per month for twelve months in order to have $2,500 for your vacation; $411 per month to have $5,000; and $822 per month for $10,000. If you don’t know how much you will need for your vacation, consider checking out the Estimated Vacation Cost Worksheet.