How to save for a trip.Finding a way to save money for a trip can be fun and challenging. Not only is it the first step to achieving your dream goal, but it also helps you create lifelong saving habits.
How to save for a trip
Perhaps thinking of saving for a trip during a global pandemic may seem absurd, but in reality it hides some unexpected advantages. First of all, setting yourself a goal in such uncertain times can become a real source of well-being. So, here’s how to start managing your money smartly so you can enjoy the ride of your life in the (hopefully!) not-too-distant future.
How to set aside money for the vacation of your dreams
Before anything else you need to evaluate how much your holiday will cost. This involves two things: deciding where you want to go and for how long. Once you have an idea in mind, it’s time to plan the details, in other words, estimate costs for the following factors:
- Cost of airfare (round trip!) and travel insurance
- The cost of accommodation
- Your budget for food and drinks
- The price of any tourist activity you intend to do once there
- The amount you want to have in an emergency travel fund
Obviously, it will be difficult to make an exact assessment, but at least you will know where to start. In general, always better to calculate an extra buffer in consideration of the fact that you could spend a little more than expected in all the categories mentioned.
Scopri N26 Spaces
Use N26 Spaces to easily organize your money and save for your goals.
Discover the advantages of a sub-account
How much to set aside for a trip to Europe
If you are planning a trip to a European country, on average, you can plan to spend around €1500 per month. Clearly it depends a lot, often decisively, on the place you have chosen to visit. While a week in Amsterdam for two costs on average around €1800, for a week-long trip to Poland for two you can get away with around €800 (flights excluded).
But remember: more comes with less, so it’s always better to plan a higher budget so you don’t risk running out of money. There’s no better cure for post-holiday blues than coming back with a few more coins than expected, so you can start saving right away for your next trip.
How to budget for your trip
Now that you know how much money you’ll need for your trip, it’s time to put together the budget to finance it . While saving money is boring, it’s also extremely liberating. Understanding your cash flow and tailoring it to suit your needs will give you a sense of financial independence, which is a plus in times of uncertainty.
1. Track your expenses
To start putting together a budget, you first need to figure out where your money goes each month; that means you need to start tracking all of your spending. Every single expense. You will need to note all incoming flows and compare them to your outgoing flows over a 30 day period. You can do this manually by checking your bank statement and entering these figures into a table. Or, if that’s too tedious, you can consider using an expense planner app .
2. Break down your expenses
This step requires you to divide your expenses into two categories: fixed and variable. Your fixed costs include any expenses that are hard to change. These include, for example, rent, debt repayments and utility bills. Your variable costs, on the other hand, are all those expenses that are a little more flexible. Thus, this category includes all subscriptions (e.g., Netflix, Spotify), all unnecessary food expenses and shopping.
3. Cut your variable costs
Since your variable expenses aren’t all essential, it’s easier to make cuts in this category. To do this, there are several things you can do. First, rethink the way you shop to make significant savings on groceries. This could mean planning your meals, so you can decide in advance how much to spend on weekly shopping, buy more food and avoid going to the supermarket on an empty stomach.
The next move is to cancel all unused subscription services, switch to a cheaper phone rate, and get into the second-hand buying habit. If you enjoy a challenge, try picking one day a week where you commit to spending nothing (aside from overhead costs). They may seem like minimal savings measures to you, but adding them together, they allow you to put aside a tidy sum.
4. Use a dedicated savings account
Once you’ve started freeing up some cash each month, it’s important to put the money you save into a savings account. By separating the money you set aside from your account for your daily expenses, you don’t risk using your savings unnecessarily and will therefore be able to stay within budget.
An even better tip for growing your savings? Automate the transfer to your savings account. Once you know how much you want to set aside each month, set up an automatic transfer each month so that the right amount is transferred into your savings account without you having to think about it.
5. Track your savings goals
At the end of each month, it’s important to evaluate how easy, or difficult, it was to meet your savings goals. If you seem to be having a hard time reaching your goals, it may be time to reduce how much you set aside each month or identify an area where you could cut some of your spending.
However, if you find yourself saving more than planned, adjust your budget to accommodate the extra and try to set aside even more. The trick is to set a savings goal that is challenging enough to inspire you to manage your finances intelligently, but not so difficult that it seems impossible to achieve and ultimately demotivates you.
6. Stay motivated
One of the best things about learning how to put money aside for a trip is that you have an exciting and challenging goal to look forward to. While it’s important to put money aside for an emergency or retirement fund, there’s no question that these goals are far less motivating.
As a result, it can help to wallpaper the entire house with visual stimuli to help you never lose sight of the finish line. For example, you could stick photos of your vacation destination next to your computer screen, or use it as a background photo on your phone. Whenever you feel the temptation to go beyond the limits you have set yourself, you can use this image to get back on track.
Manage your budget
View your daily expenses and savings to better manage your budget.
Try the budget calculator
How to save for a trip in 4 months
So far, we’ve seen some general savings tips that apply to saving money for a trip. But if you only have a limited amount of time before catching your flight, we’ve got some advice for that too. In addition to starting to save on your variable costs, identify some fixed costs that you could cut back on to set aside a lot of money, much faster.
7. Save on rent
Usually most people’s biggest fixed expense is rent. To save on this point you have a couple of options available: the simplest option is to find a roommate or two, so that you can halve, if not decrease by a third, the cost of the rent. If you currently already share a flat with someone, consider moving into a smaller room. If possible, you can also consider moving back in with your parents. While it’s not exactly the most attractive solution for many, it certainly is a way to pay significantly less rent, if not to cut this expense altogether.
8. Start saving on bills
Finding a way to save on bills each month is a great way to boost your savings. Here are some tips you can start implementing right away:
- Find and replace all energy inefficient appliances. Consider reselling them and replacing them with second-hand, but still more efficient alternatives.
- Make sure you take advantage of the best energy offer and gas suppliers. This means doing a lot of research, but in the end, it will be worth it for your finances.
- Replace all light bulbs with more efficient LED lamps.
9. Take a second job
If you want to save money quickly, finding a second job is the best way to boost your finances. If you work 9 to 5, you could add a couple of evening shifts at a coffee shop, find freelance work, or work at a restaurant on the weekend. If this option seems a bit extreme to you, doing it for only a limited amount of time will decrease your risk of burnout.
But remember: Your mental health is always more important than meeting your monthly savings goals. If you find working a side job too much of a burden on your mental well-being, adjust your monthly savings goals, not your lifestyle.
How to save for a trip fast
If you’d like to get a couple more money-saving tips for a quick trip, we’ve got one last alternative you might want to consider. This advice requires a smaller starting budget and allows you to reach your goal in less time. However, that also means you’ll need to be more flexible with your definition of an ideal vacation.
10. Bring work with you
While it doesn’t work for shorter trips, if you plan on going away for a month or more, you might consider bringing your work with you. With many people currently able to work remotely, remote working in different locations has become a more generally accepted concept. This way of working offers many possibilities for travel.
By choosing to work remotely from your vacation spot, you won’t have to set aside large sums before you leave. Plus, if your destination is particularly cheap, you could even save more money than if you stayed at home! But remember to keep a balance between your professional and private life. This could mean taking time off during your trip to ensure you make the most of the potential of this experience and possibly taking unpaid time off to do so.
N26 current account
The 100% digital account with no opening or management fees that simplifies your life.
Waiting list(new table)
Your money with N26
N26 helps you reach your travel destinations more easily. All our accounts allow you to make payments from all over the world, in all currencies and without extra commissions. In addition, you will have access to a virtual card that allows you to conveniently make contactless and mobile payments. Our premium account holders can take advantage of a dedicated insurance package to have a little extra peace of mind even when travelling, as well as the Spaces feature, separate spaces from your main account, ideal for setting specific savings goals for each trip. Visit our accounts page to choose the right one for you.
