Creating a Vacation Fund: Saving Money for a Better Vacation

Do you ever start to plan a vacation and realize suddenly how much it is going to cost as you add up the prices of everything? Vacations can be a savings drainer, and it's even easier to go crazy with spending on vacation if you are not keeping track of the money as it goes out. Creating a vacation fund is an easy way to keep a budget for your vacation as well as save some money in the process.

Why should you create a vacation fund?

Having a vacation fund will help you in many ways. First of all, once you start setting aside money for your vacation, you'll learn to spend less throughout the year because you'll want to save for that great vacation. Now instead of saving just to save, you are saving for something you anticipate. It's often hard for people to cut back on spending when they can't think of any good reason to save money. A vacation fund gives you a great reason and great motivation to save.

Another benefit of a vacation fund is that you will most likely end up spending less on the vacation. It's easy to go nuts when you don't have a budget for your vacation. A vacation fund can be your budget. Tell yourself you can only spend what you save in that fund and not a penny more. You'll be training yourself to actually pay attention to what you are spending on your vacation before you go booking the best room at the most expensive hotel.

Finally, a vacation fund offers you and your family the opportunity to EARN a vacation! By saving money specifically for the vacation, you'll be working hard to make it the best vacation you can. Your kids may even be convinced to donate some of their allowance, or if they are old enough to work see if they can contribute some money out of each paycheck. Since you will be saving specifically for the vacation, by the time you actually go on the trip you will really feel like you've earned it.

Where should you create a vacation fund?

Now that you know WHY you want a vacation fund, you'll have to decide where you will store the money. While some families like to do a jar on the table, I prefer keeping it in a bank account so that it can earn interest and make your vacation fund even better. The best option is to create a totally separate savings account where you will contribute money each month. For me, I use my paypal account as my vacation fund since it is completely separate from my savings. By having this money separate, you won't be tempted to spend it throughout the year and you will be more likely to save it.

If making a separate account sounds like too much trouble for you, another option is to just change the way you track your savings. Instead of having one savings balance, make a spreadsheet or a list with two savings balances on it. One will be your savings that you can spend; the other will be the vacation fund that you can't touch. If your savings balance starts to go too low, you'll have to use self control and learn not to touch your vacation fund.

How should you contribute to a vacation fund?

Some people like to contribute at random to a fund like this, but I think it's better to have some kind of plan. Perhaps with each paycheck you receive, you'll put so many dollars from it directly into your vacation fund. Your kids can be asked if they are willing to give up a percentage of their allowance or of their paychecks as well. If you budget for your vacation in advance, you can calculate out how much you'll need to save each month in order to earn that amount in time.

Another method to contributing to your vacation fund could be taking any side income you make and putting that directly into your fund. For example, anyone in the service industry could take all of their tips each day and put that into their vacation fund. That might just make you work extra hard to get tips so that your vacation can be even better! If you have a small side job, you could designate all the money earned on side jobs to the fund. For example, every penny I earn writing online goes right into my PayPal "vacation fund". This will obviously motivate me to write more and end up earning more for my vacation.

Go Create a vacation fund now!

If you are just dying to take your next vacation but you are worried about having enough money, it's time you start a vacation fund. Determine your budget and start saving today! Not only will a vacation fund help you have a better vacation, it will also teach you to save and spend wisely while you are there. Enjoy!!