For some, just mentioning the word "vacation" is enough to conjure up dreams of swaying palms and warm coastal waters. For others, it can be a major source of anxiety: where do I go and how will I pay for it? Over 40% of Americans will take at least one vacation a year, often with hefty price tags that can damper the relaxing experience. On average, people spend almost $2,000 on summer vacations alone. The good news is that by practicing a few clever financial habits, you can still enjoy a much-needed holiday without the unwelcome baggage that comes with debt. 

Here are some simple ways to take the stress out of your planning and help you save for your next vacation.

Create a Vacation Budget
Re-examine Your Household Budget
Open a Dedicated Vacation Savings Account
Be Flexible with Your Vacation Planning
Use Popular Travel Sites to Save for Vacation
Treat Yourself, But Pay In Advance
Use a Travel Agent or Travel Portal
Use Credit and Debit Card Rewards
Which Vacation Budgeting Tips are Right for You?

Create a Vacation Budget

Budgeting for your vacation is a fail-proof way to enjoy your downtime, knowing you're not breaking the bank. In addition, planning could help you find better travel deals and save enough money to cover your entire trip before you leave.

In creating your vacation budget, list the essentials and provide a ballpark cost range. Be sure to estimate costs for transportation, dining, lodging, tours, and other everyday expenses. If you need help, vacation planning apps like TripIt or Tripsy will log all your expenditures in one place. 

Remember to research customary tips and gratuity fees for the area you are traveling to, as these small expenses can add up while on vacation.

Once your list is complete, arrive at cost ranges for each category and add them together to get a total expected cost range. Then, pad your total costs with a reasonable buffer of 10 - 15% to account for higher-than-expected travel costs or currency fluctuations for international travel.

Re-examine Your Household Budget

• Streaming subscription services – Look for free trials from competing providers if you can't give these up
• Pack your lunch once or twice a week – Doing this will ensure you're using groceries you paid for and save money from dining out
• Reduce your electricity bill – Even making small adjustments can save money, such as turning off your computer at night, turning up the thermostat, taking quicker showers or pulling your curtains closed

There are numerous opportunities to save money in unexpected ways. If listing your expenses causes panic, look to your mobile banking app. Banking apps commonly include money management tools that categorize spending and sometimes even cancel unused subscriptions for you.

Open a Dedicated Vacation Savings Account

Though you may have a savings account already, consider opening an additional account specifically for your vacation. Doing this will help categorize your savings and reduce the need to dip into your emergency funds. 

While researching vacation savings accounts, look for ones that help you save by rounding debit transactions up to the nearest dollar and drop the excess change into your savings account or ones that automatically transfer $1 each time you use your debit card. These handy features can effortlessly build your savings balance.

Some savings accounts may even have a new customer bonus, just review the bonus details to ensure you meet the requirements.

Be Flexible with Your Vacation Planning

Did you know that Wednesdays and Thursdays are the cheapest international flight days? If you want to spend a week abroad, consider a Wednesday-to-Wednesday vacation instead of the typical Saturday-to-Saturday plan. Doing this could save around 10-20% on airfare.

Accommodations can be just as expensive – or more – than airfare, so it pays to know when you can save the most money on hotel stays. While many factors impact a hotel rate, Tuesday usually is the best day to book a hotel internationally, with Monday holding the distinction for domestic travel. 

Consider seasonality as you plan for vacation, as this can impact prices significantly. For example, a beach vacation in the winter may be chilly but can result in huge savings if swimming is outside of your agenda.

Use Popular Travel Sites to Save for Vacation

Travel sites like Hotels.com, Orbitz and Trivago have become popular destinations for booking cheap hotels and airfare and it's easy to see why. Discount booking sites often offer bundled travel deals, like airfare, car and hotel reservations. If you know you'll need these items bundling could be an easy way to save.

Hotels may also partner with these online travel agencies when inventory is low so they don't have to advertise the discounts publicly.

Remember, while discount booking sites could help you save money, the experience may not be worth the savings. For example, unused hotel inventory could result in less-than-ideal room accommodations, such as overlooking a busy street.

It pays to do your research and compare discount booking sites with hotels and airlines that may offer their own loyalty points and rewards.

Treat Yourself, But Pay In Advance

Most people don't think about planning for splurges in advance, but it's a bright idea. After all, you are saving for a vacation. 

If you have some breathing room in your budget, look for an opportunity to treat yourself. Your ideal splurge might be a spa day, a gift you can't find anywhere else, a chartered fishing trip, or a guided city tour – it all depends on your destination and personal preferences. 

Adding $10 to your weekly vacation savings account could go far with rest and relaxation.

Use a Travel Agent or Travel Portal

A travel agent or portal could earn you deep discounts and take the stress out of planning. Agents usually receive commissions from airlines and hotels rather than the traveler, which means you may pay less for your vacation than if you planned it yourself.

If you are a member of a travel club or lifestyle club, they often have discount portals that are unavailable to standard travelers. Also, review your work benefits, as some private organizations may offer discounts or employee benefits on traveling.

Use Credit and Debit Card Rewards

Consider opening a credit card with travel rewards. Often, large welcome offers are included when you hit specific spending goals, which can be redeemed for flights or hotels. 

Many hotel and airline-specific credit cards give you extra incentives, like room upgrades or free flights for using points when you book with them exclusively. 

Using your credit card for daily expenses like food and gas can also help you acquire points quickly and are easy to pay off monthly as they are already in your budget. 

Explore debit card rewards programs if credit cards aren't your preferred payment method. With debit reward programs, you're only spending money you have, with the added potential benefits of a hotel, food or experiential discounts.

Which Vacation Budgeting Tips are Right for You?

Enjoying a restful vacation without accruing debt is possible. After all, what good is a holiday if you have to work overtime to pay it off? By taking simple steps like creating a budget, being flexible with your travel dates, opening a dedicated savings account, and exploring travel rewards programs, you could be hitting the surf or the slopes in no time. 

Do you need help creating a personal savings plan? Your local banker can help you develop the right plan for your goals, whether for vacations, college or retirement. To learn more, fill out the form below.