Let’s be real, it cost money to travel. I don’t care how savvy a person claims to be, you need money to travel. Everyone has mastered their own budget travel hacks. Some people rack up hotel points. Some people rack up frequent flier miles. And others subscribe to alerts or use apps to snag ridiculously low flight deals or error fares at a moment’s notice. Regardless of the scenario, you need money to book those flights and hotels to accumulate the needed points throughout the year. You need to have funds available to catch that low travel deal or error fare. It doesn’t matter if it’s a $100 round trip flight to the Maldives. If you don’t have the funds readily available, your dream trip will remain just that, a dream.
I think the beginning of the year is a great time to implement a strategy to start saving for travel, especially if you’re looking to travel over the summer or for the holidays. If you start in January and want a plan a getaway in June, you will have 6 months to prepare. If you want to take a family Disney vacation for the holidays, saving until June will at least give you hefty a down payment. Here a 5 ideas you might what to consider:
Digit is a savings app that saves money based on your spending habits. How does it work? First, the user connects the app to their checking account. Digit will then analyze the user’s income and spending and transfer small amounts of money to set aside. They use 128-bit bank-level security, and do not store bank login information. Every 2 or 3 days, Digit transfer money (usually $5-50) from your checking account to your Digit savings. According to their user agreement, they will never transfer more than you can afford, eliminating the risk of over-drafting your account. They also have a no-overdraft guarantee. You can access your money at anytime by simply sending a text message. Digit will transfer your funds back to your checking account the next business day. They all unlimited transfers, with no minimums or fees.
My experience: I started using Digit over the summer and can attest that it works. I’m terrible when it comes to saving. Money management has always been a challenge for me. Digit works for me because it withdraws the money in small amounts and operates on the “out of sight, out of mind” concept. You’ll be amazed by the amount of money you will be able to save in such a short amount of time.
2. 52-Week Money Challenge
The 52-Week Money Challenge surfaced on Facebook a couple of year ago. There are many variations of the challenge allowing you to save as much as $5,000 in one calendar year. The challenge involves putting away small amounts of money, based on a weekly schedule. Depending on your discipline, you can put your money in a jar or canister or transfer it to the savings account of your choice.
My experience: It works in the beginning, unless you’re REALLY disciplined. Unfortunately, I’m not that chick. If you’re able to stick with it, I think it’s a great way to visually see your progress. But by February, I usually end up dipping into my money jar for food delivery or gas to hold me over until payday LOL.
3. 5-Dollar Money Challenge
The 5-Dollar Savings Challenge is similar to the 52-Week Money Challenge. Instead of following an established schedule, the strategy is to put away every 5 dollar bill you acquire throughout the year. Again, depending on your discipline, you can put it away a jar to be designated for your travel fund. But what if you use your debit card and don’t utilize cash? You can opt to receive a 5 dollar cash back when you make a purchase and put it away.
My experience: I haven’t tried it yet. And since I struggle with the 52-Week Challenge, this one may not be for me. But if you’re discipline enough, you can visually see your progress and over time, accumulate and nice egg.
4. Credit Union
This is an oldie, but nonetheless still an effective savings strategy. Take advantage of the credit union offered by your employer or the military (depending on your status). You can create a “vacation club” account. Contribute as little as $25 per pay period through pre-tax payroll deduction or manually transfer it to your account.
My experience: It works for me. By utilizing the payroll deduction amount, I find I don’t miss the money. Again, out of sight out of mind!
5. High Interest Yielding Online Savings
In lieu of a traditional savings account plans offered by your local bank, online banks offer high yielding savings options. With a higher interest rate on your return, you’re able to save more. Most high yielding online savings account plans are just that: online. Limited access allows you to stay disciplined. Without ATM access, you’re more likely to stay on track and use your account for it’s intended purpose. You can link it to your primary account and schedule monthly deposits based on your payroll calendar or make manual deposits. And, there is usually no minimum deposit: Here are a few recommended by Magnify Money: Goldman Sachs (1.05%), Ally (1.00%), Synchrony Bank (1.05%), and Barclays (1.00%).
My experience: This strategy works. I opened a Goldman Sachs account about a year ago and found it to be an effective way to save additional cash. This account is perfect for people like myself that lack discipline, because limited access deters you from dipping into funds.
I hope these tips are helpful. Depending on your level discipline, some will prove to be more effective than others. Whatever strategy to use, I wish you much success and abundant travel and adventure in 2017!!