Setting a New Year’s resolution to travel the world is exciting, but it can be daunting, too. The post-pandemic travel boon has caused prices to skyrocket. From buying flights to booking a hotel room — everything costs more these days.
Your budget may not be ready to handle such a big expense — for now, at least. With dedication and patience, however, you can whip your finances into shape until they support your globetrotting dreams.
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Get Your At-Home Budget in Order First
Although you may be ready to jet-set right this instance, you should hold off on any vacation until your finances at home calm down. If you’re carrying over a lot of debt on credit cards after the holiday season, you’ll want to pay them off before you pack your bags.
You need those cards free to book travel arrangements and accommodations online. The cards are also your safety net in an emergency. Luckily, they aren’t the only safety net at your disposal, so don’t panic if you face an unexpected expense while you’re cleaning up your budget.
Installment loans are available online if you need help covering an unexpected auto repair or medical expense in the new year. You can be ready to apply for an installment loan in no time at all, if you have your bank account and Social Security Number handy.
Open a Separate Savings Account
You should not stash your vacation fund in your checking account. That’s the account you use to pay your bills and other expenses. By merging your paycheck with your savings in one account, you can accidentally spend your vacation savings on non-vacation expenses.
Instead, open a new savings account for your holiday. Many banks offer sign-on promotions for new customers in the form of higher interest rates that can help your savings grow. To maximize these savings, choose from high-yield savings accounts that promise better rates.
Name Your Sacrifices
A vacation fund doesn’t grow out of nothing. You have to consistently stock it with cash, and that money has to come from somewhere. Look at your monthly splurge spending, and figure out what you’re willing to give up in the name of a holiday.
You don’t have to live on just the essentials to afford a vacation, although this will fatten your savings faster. You can simply limit how often you dine out or how many subscriptions you pay each month.
Leverage Your Credit Cards
The average credit card comes with travel rewards or cashback bonuses so use them. Redeem these gifts to help reduce the price of flights, accommodations, and rentals.
While credit cards can help you save money, don’t spend money just to earn points. Swipe these cards only when you can pay off what you use by the due date.
Customize Your Travel Plans to Suit Your Budget
Being strategic about when and where you go can help you save even more. Check out these tips to curate a vacation that works on a smaller budget:
- Leave during off-peak seasons to find cheaper prices on flights and accommodations.
- Use Google Flights to help you find the cheapest time to book.
- Explore destinations that promise a better exchange rate and cheaper prices, like Laos, Cambodia, or Indonesia.
- Consider booking your stay at a hostel or arrange free accommodation through house sitting.
Finally, customizing your travel plans to suit your budget is key. Travel during off-peak seasons use tools like Google Flights for cost-effective bookings, explore destinations with favorable exchange rates, and consider budget-friendly accommodation options such as hostels or house sitting.
Turning your New Year’s resolution to travel the world into a reality requires thoughtful financial planning and dedication.
By following these budgeting tips and patiently working towards your financial goals, you’ll be well on your way to turning that dream vacation into a reality in the coming year.
Start by getting your at-home budget in order, paying off any lingering credit card debt, and considering alternative financial safety nets like instalment loans for unexpected expenses. Opening a separate savings account exclusively for your vacation fund helps prevent accidental spending, and opting for high-yield savings accounts can maximize your savings growth.
If you want to make your wanderlust a reality this year, follow these budgeting tips. They’ll prepare your finances for that trip of your dreams.
