What’s the point of saving if you never spend any of it? This is a legitimate question. Indeed, it’s important to remember that savings is always a means to an end, never an end in itself.

While you should have an emergency fund (equal to three to six months of living expenses) and an eye toward your future retirement, it’s OK to spend money out of your savings. So how do you save responsibly while also saving for a vacation?

Develop Responsible Saving Habits

If you want to save for a vacation, the first thing you should do is get your emergency fund squared away. This is the bare minimum of savings the average person should have in case of a loss of income. Generally speaking, this should equal three to six months of living expenses. The general target for ongoing savings is 10%. However, if you can save more, do it. Some even recommend saving as much as 30% of your income.

Once you have your emergency savings fund squared away, you’re not done with saving. You also should be saving money for retirement. However, once you meet the emergency fund requirement, you can earmark a portion of what you save for retirement and another portion for that vacation you’ve been dreaming about. Go back to the 10% figure. Especially if you’re saving more, closer to 30%, there’s nothing wrong with earmarking a significant portion of that for vacation savings.

Keep track of your savings. Even if you don’t have separate savings accounts for retirement, emergencies and vacation, you can monitor your progress by using a pen and paper or a money management app. When you save for vacation it should be a purposeful act, one that you are in total control of, rather than just pulling a sum of money out of your general savings.

Be Alert to “Found” Money

You’re not going to save for vacation by finding $20 bills in the street, yet there are other ways to find money:

  • For example, if you negotiate a lower premium on your insurance policies, you can pay that money forward to your vacation savings.
  • Knuckling down and paying off all of your credit cards frees that money up, allowing you another opportunity to pay money you were spending on bills forward into your travel savings.
  • Many people these days subscribe to services they don’t regularly use, whether that’s a movie streaming service or a basket of dog toys delivered every month. Cancelling these subscriptions and putting the money into your vacation savings provides another way to get away.
  • Finally, consider the other kind of “found” money — the kind you earn. Bonuses and tax refunds are often spent on extravagant purchases, many of which are quickly forgotten. Rather than just spending it on the latest toy or gadget, consider putting that money aside for your dream vacation.

Saving for a vacation isn’t necessarily easy, but it’s certainly not impossible. With just a little attention to your finances and an eye toward judicious use of savings account funds, you can be lounging on the beaches of San Juan or climbing the mountain that haunts your dreams in less time than you think.

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