A Financial Expert Shares How to Save (And Budget) for a Vacation

Millennials are a little different from our parents’ and grandparents’ generations. We want to see the world, and we favor companies that afford us the opportunity to do so. Forbes reported that millennials spend nearly $600 billion a year, and more and more of that money spent is going toward traveling. With companies like Travel Noire or Remote Work, we are able to cultivate experiences through travel and open up our minds to something much bigger than our neighborhood or our comfort zones. We got a chance to speak with millennial finance expert Stefanie O’Connell, who shared tips to keep at the top of our minds for a cost-effective and enjoyable vacation. What are some of your favorite tips? We’d love to have you share them in the comments below!

 

Be flexible with your destination and do some research

In the beginning stages of your leisure travel planning, you’re more than likely going to think of destinations you would like to visit. Several things can help to make a destination look enjoyable, like the weather, the activities associated with the location, and if you’re like me, the price point. When considering where I’d like to go, I begin by asking myself if this trip will deplete my savings, if I can truly afford it or if I will have to eat Top Ramen when I come home.

A great place to begin answering those questions? Websites like Skyscanner, where you can see ideal travel dates for certain locations, or which places are cost effective in the months you want to travel. Other websites/apps like Hopper, Airfare Watchdog, or Google Flights can help you further identify the best timing and the costs associated with those travels. There are tons of ways to save, but you just have to do some research.

Millennial finance expert Stefanie O’Connell echoes that point by saying, “I’m a big fan of finding insider deals by scouring reviews on Yelp and TripAdvisor. I also love a good Airbnb find — both homes and experiences.” Additionally, being flexible with when and how you travel can be a great asset during the early stages of planning. “Plan trips around friends or family visits for example, using public transit, traveling in the offseason, or using deal sites on local attractions,” says O’Connell.

 

 

You CAN save for your future and for fun at the same time

According to a new survey from Citi AA MileUp, 38% of consumers say that budgeting for a trip is the most stressful and least enjoyable part of vacation planning. There’s also a misconception that if you are saving for a trip, you can’t save for your future. To ease that anxiety, there are a few things to consider.

The best strategy for a vacation is to set money aside all year long. I recommend opening up a dedicated savings account for your vacation and travel goals and contributing a small percentage of each paycheck to it,” says O’Connell. “Setting aside 5% or even as little as 2% each paycheck can go a long way over time. By saving for your vacations in a separate savings account, you’ll get a clear picture of what trips you can and can’t afford to take just by checking the balance of your accounts.”

Going back to your personal savings, O’Connell says the same way in which you are hoping to make traveling a priority, you need to do the same with your personal savings goals. “In the same way you prioritize setting aside the savings for your vacation, I recommend setting aside savings for your future — as a percentage of each paycheck. Better yet, automate the savings process so that as soon as your paycheck lands in your checking account, a portion of it gets automatically rerouted to your various savings goals. When you don’t see the money in your checking account, you’re less likely to think of it as money you have available to spend at that moment.”

 

Source: @nnennaechem

 

Find a Side Hustle

If you want to be like Aladdin and Jasmine and see the whole world, but your budget is saying ‘girl, no,’ consider taking on a side hustle. The beauty in side hustles is that it’s something you’re doing on the side and it doesn’t have to take on a major time commitment like your full-time position. A great way to make your side hustle work for you is to center it around something that you actually enjoy.

For instance, if you’re a shopper — look into being a mystery shopper, stylist, or even selling clothes you want to get rid of on Poshmark or ThredUp. You can tutor, or write, or drive Uber/Lyft, be a book reviewer, or anything that you want to bring in extra funds. If traveling is a priority for you, you will find what works best for your situation and time. “If you take on a few weekends of babysitting now, maybe you can afford that bachelorette party weekend in cash come fall — without dipping into your long-term savings to afford it,” says O’Connell.

The silver lining at the end is that spending those extra hours per week can afford you the opportunity to go places you want like Bali, Italy, or Greece.

 

READ: 15 Creative Ways to Make Money

 

Source: @forever21

 

Look into a Travel Rewards Credit Card

Citi AA MileUp’s survey also showed that 81% of millennials say that they aren’t making the most of their travel rewards credit cards and, sadly, I am in that boat as well. To make matters worse, although I have had one credit card since college, I recently got another credit card that accumulates rewards. Imagine how useful all of my pointless spending on things like Taco Bell, Starbucks, makeup, or planners would have been if I were actually earning points or rewards for those expenses. When deciding to travel, it’s important to look into all the ways you can reduce costs. One of those ways is by obtaining a rewards credit card — however, there’s some confusion that may come from using them.

O’Connell says, “People might not know how they can actually earn rewards, how they can redeem rewards, whether or not annual fee cards are worthwhile, etc. You want to think about where you’re going to get the most benefit for your buck, which is going to differ from person to person. If you can only earn miles on purchases for travel, for example, and you really only take one or two trips per year, that might not be the best program for you.”

“If you’re going to get charged an annual fee that’s a couple of hundred dollars just to access a rewards program that you’re really not going to get a chance to maximize, well then that’s probably not the best use of your money,” O’Connell says. When looking at the best card for you, it’s not a one size fits all, but there are different tools to help you figure out what’s the best option for you. A personal favorite is the website NerdWallet as it allows you to research your options conveniently. O’Connell recommends the Citi Card as a low stakes option for people who are new to or still getting used to earning and using travel rewards.

“For me, a program that’s not going to charge you an annual fee and that’s going to reward you for your everyday spending — meaning it allows you to earn miles on all your purchases, so you can quickly rack up the rewards and find a way to put that dream on your calendar sooner,” says O’Connell. “There’s a new no-fee card out from Citi and American Airlines called the Mileup card that gives consumers 2x miles for every dollar they spend at the grocery store. On average, consumers spend around $324 at the grocery store per month, so that’s about 648 miles you can earn each month for the spending you’re already doing.”

Once you have your card, another thing to consider is making everyday purchases on your card to help maximize your rewards and to also give you a snapshot of where your money is going at the end of the month.

 

 

READ MORE: How to Get Your Flights for Free >>

 

Source: Hello Fashion

 

Do what the locals do

Now that you’ve got your trip organized, and you’re ready to jet set, a great way to see the beauty in your destination is to immerse yourself in what the locals do. When looking for the local coffee shops, or where locals eat, consider downloading the Localeur app, as it’s essentially Yelp from the local perspective. Read recommendations of places and why they are a must-see. Also consider looking into Airbnb for your home for the duration of your trips, as well as for experiences that would be worthwhile to attend.

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