- 1 Tips for Saving Money Before Your Trip
- 2 Financial Instruments to Help You Prepare for Your Trip
Be smart with money. That’s the key to saving when you intend to take one or more trips. This task should begin even before you pack your suitcase, hit the road, or catch any plane. It’s important to know how to save and plan your trip so you don’t run out of money along the way.
Here are some of our best tips and tricks on how to save money for any trip, even if you don’t earn much each month, because there are many ways to increase savings quickly and be able to devote yourself to a passion like traveling! We discover useful tips and which are the best financial products to save for any trip.
Tips for Saving Money Before Your Trip
Every traveler has fantasies of flying around the world to secret European villages and the most beautiful islands in the world. But the crushing reality is that travel costs money, and for most travelers, money is not an unlimited resource.
What do you need to do to raise the necessary funds? Following the tips below will help you get closer to your financial goal.
1. Make a Personal Finance Plan
The first step to saving for a vacation is to plan it. Before you even think about your savings, plan where you want to go, where you want to stay, and what you want to do while you’re there. As you do your research, keep track of how much airfare, lodging, food, and activities will cost. After you’ve planned a vague itinerary, take the total estimated cost and write it on your calendar for your planned departure date.
Count how many weeks are left until your travel date and divide the cost by the time you need to save. Now you’ll know how much you need to set aside each week in order to afford your dream trip.
2. Buy in large quantities
Buying in bulk is not always the best option, but for items you use constantly around the house, this is the best way to save a few euros. Everyday products like butter, alcohol, toilet paper, paper towels, laundry detergent, and soap are best bought in bulk. If you don’t like carrying large bags home from the store, you can order in bulk online and have them delivered conveniently to your home.
3. Stay driven
Always keep your goal in mind. It can be a good tactic to print a picture of your dream destination. Tape it to the wall. Make it the background image on your phone or computer. This will help you in case you are going to buy through the Internet any food that is not essential for you, since seeing the image of your future vacation will help you to consider whether or not the purchase you are making is really necessary.
4. Try to avoid impulsive shopping
It is an undeniable fact that small unnecessary purchases add up and add up expenses, which prevents you from saving. We are referring to that mid-afternoon coffee at the corner café, that packet of potato chips to stave off hunger, or the same newspaper you decide to share to entertain yourself on the bus. Go through your bank account and look for the items where you regularly and unnecessarily spend money. Eliminate these impulse purchases and you’ll see how you can save more for the trip you plan to take.
Financial Instruments to Help You Prepare for Your Trip
Although there are very useful tips on how to save for any trip, if you tend to travel on a regular basis, it is better to also make use of financial instruments such as savings accounts or bank deposits, since they offer returns to the user, and therefore are an ideal method of saving for travel over time.
Set aside money for your travels with a savings account
A savings account is a deposit account held at a bank or other financial organization where you can deposit a sum of money and earn an interest rate in return. It is an income-earning deposit account that serves as one of the safest ways to invest your hard-earned money and, therefore, will help you save for the journey.
A savings account is one of the most prudent investment options, which will help you store your savings safely in the bank. Among its advantages is that its use is risk-free, which acts as an important benefit in today’s world, as you are earning money without any kind of risk.
Savings account differs from regular checking accounts and is used for different purposes. Regular bank accounts have no limits on the number of withdrawals you can make each month and any kind of payments are usually made through them. On the other hand, a savings account is beneficial for money that you do not intend to use for your daily expenses. Therefore, a savings account acts as a convenient place to keep extra money and if your passion is traveling, you can use it in the future for that purpose.
Since the savings account earns you interest on your funds, it is more financially beneficial for you to deposit the extra funds in a savings account than in a checking account. In addition, a savings account is one of the most liquid investments, allowing easy access to money whenever you need it.
The first and foremost benefit of having a savings account is that it earns interest on your deposited funds. In turn, a savings account allows you to keep deposits separate from the money you use regularly, such as cash on hand, checking accounts or long-term investments. Making regular deposits and watching it grow can motivate you to save. It is an ideal vehicle for saving for a specific purpose, such as a vacation. If you want to save for several different purposes, you may want to simplify your bookkeeping by opening several accounts.
However, with a savings account, you can easily access your money deposited there in case of an emergency. You can simply withdraw your deposited funds to cover an unexpected expense. Most banks and institutions provide their account holders with 24-hour online access to their funds. Some institutions may also allow you to link your savings account to other accounts for quick and hassle-free transfer of funds. Being able to access your funds when you need them is one of the greatest benefits of a savings account.
As mentioned earlier, a savings account is probably one of the safest ways to make an investment without any risk. The savings account also provides the ability to put your money into another investment whenever the opportunity arises. For example, if a house in your locality is available and you wish to buy it, you can use the funds in your savings account to cover the down payment and be able to buy the property.
Bank deposits, an opportunity for savings
Still, have money under your mattress? Savings accounts and fixed deposits are safe places to save money and earn interest on it. However, another method of saving money to travel more effectively, albeit for a longer-term, is through bank deposits.
Bank deposits consist of money deposited in banking institutions for safekeeping. These deposits are made in deposit accounts such as savings accounts, checking accounts, and money market accounts. The account holder has the right to withdraw the deposited funds, as set forth in the terms and conditions governing the account agreement.
Like a savings account, a time deposit account is an investment vehicle for those who want to save and will be very useful for saving for long-term travel. Time deposit accounts tend to offer a higher rate of return than traditional savings accounts, but the money must remain in the account for a certain period of time. In other countries, time deposit accounts have alternative names such as time deposits, fixed-term accounts, and savings bonds.
Bank deposits earn interest. That means that for every euro we save, we earn a few cents each year in interest. Interest can be paid daily, monthly, or annually, but is usually quoted as an annual figure such as 2% or 4%.
Banks offer different interest rates on deposit accounts, and it’s worth taking a look at our partner bank comparator to find out which one offers better interest rates.
Bank deposits are good for regular interest payments or access to short-term money. However, taxes and inflation can affect the value of interest earned.
So if you already know where you want to go on a trip and want to save for it, follow our savings tips and set up specific savings accounts, like the ones we have listed above, they will help you a lot in your goals!