Vacations are more than just wonderful; they’re essential. Whether you want to sit on a beach in California, or ski in Colorado, it’s good for your soul to relax and rejuvenate.
But nothing will spoil a relaxing vacation like having to pay for it after the fact. In other words, going into debt for a vacation is a bad idea. Instead, you should save up and pay cash.
So, in this post, I’m going to show you how to save for a vacation in 6 months and avoid any kind of relaxation-ruining debt.
But why 6 months? Because the only thing better than one yearly vacation, is two yearly vacations! That’s my opinion, and I’m sticking to it.
So, dust off your luggage, because after reading this post, vacations are going to become a consistent part of your life.
Let’s get started.
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Step 1: Set Up a Vacation Savings Account
If you want to save enough money for a vacation every 6 months, you’re going to need a place to put it. So, start by setting up a savings account.
But, don’t just set up a new account at your current bank. You want this money to be out of sight, and inconvenient to access more than twice a year. Remember, the only reason you should dip into your vacation savings, is to pay for a vacation. And keeping your savings separate from your everyday bank will reduce your temptation to ‘dip’.
Additionally, be sure to pick an account with a low minimum balance. You don’t want to have to maintain a $500 minimum in an account that’s going to be drained every 6 months.
An account with a $100 minimum is reasonable.
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Step 2: Set a Savings Goal
One of the keys to traveling consistently, is fitting your vacation to your budget, not your budget to your vacation.
In other words, you should set a savings goal, then, pick a vacation that fits within that number.
For my wife and I, a vacation savings goal of $2,500 is just right. For you, the perfect number might be $5,000, or maybe a little lower, like $1,000.
If you need some help setting a savings goal, we recommend picking a number that is between 2% and 5% of your gross annual household income. So, if your gross household income is $100,000, your vacation savings goal should be between $2,000 and $5,000.
We have found that to be a reasonable savings goal. Though, everybody’s financial situation is a little different, so use your best judgement.
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Step 3: Your Vacation Savings Breakdown
This might be a little obvious, but once you have a savings goal, you need to break it down into bite-sized pieces. Hence the name, Vacation Savings Breakdown.
Luckily, this part is easy. You just need to take your savings goal and divide it by the number of paychecks you will receive over the next six months.
For example, if your goal is to save $1,500, and you get paid every 2 weeks, that’s 13 paychecks over the next 6 months. So, $1,500 divided by 13 is $115.39. That’s how much you need to save every time you get paid.
Ok, take a minute and create your savings breakdown. You’re going to need it for the next step.
Step 4: Work Your Budget
If you want to save for a vacation every 6 months, the money needs to come from somewhere. And honestly, it would be preferable if you didn’t have to sacrifice your long-term savings to do it.
So, open up your budget, and start going through your expenses. Are there any unnecessary expenses you can eliminate and replace with vacation savings? Are there any areas in your financial life you can cut back on, in order to fund your vacations?
Massage your budget, and squeeze as much money as you possibly can from the expenses category.
If you’re struggling to find ways to cut back, here are a few examples:
- Eliminate monthly subscriptions
- Trim your grocery budget
- Reduce your internet speed and lower your bill
- Cut your cable
- Cut back on dining out
Your goal should be to pull a little bit of money from a bunch of different categories in your budget, rather than pull a big chunk of money from one or two categories.
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Step 5: Save Before You Spend
Pay close attention, because this is the key to saving. If you’re serious about saving for a vacation in 6 months, you need to get in the habit of saving before you spend.
In other words, the first thing you should do each time you get a paycheck is move money into your vacation savings account. And since you have a savings breakdown, and you’ve worked your budget to accommodate for the savings, you don’t have to worry about needing it later.
Trust your budget, and move the money. Then live off of what’s left.
Step 6: Save Extra On Your Low Spend Months
Throughout the year, you will inevitably have months that are less expensive than others. And when those months arrive, you should make the most out of them by adding a little extra money to your vacation savings.
For instance, my wife and I know that February, April, August and September are the months we spend the least money. So, in those months we try extra hard to save more than planned.
However, you shouldn’t apply this principle in reverse. In other words, don’t cut your vacation spending in your high-spending months. Your vacation saving should remain consistent throughout the entire year. It’s just a nice bonus to save a little extra in your low-spend months.
Step 7: Utilize Cash Back Apps
Cash back apps are a nice addition to your financial life. And if you’ve never tried any, now’s the time.
Though, I will preface this section with one caveat: cash back apps are only useful when you use them to purchase things you would have bought in the first place. Spending money just so you can get cash back is beyond foolish.
Ok, with that said, we highly recommend Rakuten and Dosh.
We use Rakuten for nearly every online purchase, and it is glorious.
With Rakuten, you can get cash back on almost everything you buy online, which is a big bonus when you’re saving for a vacation. Plus, if you sign up for Rakuten after clicking any of the links on this page, you will get a $10 cash back bonus once you make your first qualifying purchase. Sign Up For Rakuten Here
Dosh works for more than just online purchases, and it is automatic. Just connect your card, and every time you use it, Dosh will work to try to get you some cash back. Sign Up For Dosh Here
Cash back apps are a beautiful thing when you’re trying to save for a vacation. Honestly, why wouldn’t you use them?
Step 8: Make Extra Money
Ok, so you’ve done just about everything in your power to cut expenses and save. But there’s one more approach you can take… make some extra money.
If you want to save for a vacation in 6 months, a couple hundred extra bucks each month can make a huge difference. And there are tons of different things you can do to make that amount of money each month.
I mean seriously, an extra $250 every month translates into $3,000 per year. Umm… that’s how much me and my wife’s honeymoon cost!
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It’s more than possible to take 2 vacations every year.
With a dab of planning here, and a pinch of effort there, you can be sipping daiquiris on a beach every six months! Heck, maybe even more often than that!
And the best part is, you won’t have an ounce of debt waiting to ruin all that wonderful, relaxing fun when you get back. In fact, you might even have a little vacation money left over to jump-start your savings for your next vacation, which just so happens to be in 6 months.
Thank you Zach. This article on Living Below Your Means, was so inspiring to me. I was heavily in credit card debt at one time. I climbed out of this debt and now I never use credit cards. I feel great paying for things with cash only. It just eliminated so much anxiety. I shop sales only. I do know people who are in debt up to their ears. It’s just not a smart way to live. Thank you for this article and I plan on being a little more frugal now. So inspiring.
Thanks for the kind words, Cindy! Yes, paying cash instead of credit cards is the best. No debt = no stress!