Man and woman enjoying a romantic gondola ride in Venice.

Vacations do much more than just  relieve our wanderlust — taking time away from work can help ease everyday stress and return us to our regular lives relaxed and reinvigorated.

Sometimes, however, we feel like we have to postpone our dream travel due to financial concerns. While putting your travel on hold is hard, the silver lining is that you may be able to save up even more for that dream vacation.

Whether or not you’re already planning your next big trip, if you’re on a tight budget, saving for a vacation can seem out of reach. Planning early is one way to potentially minimize financial stress and also get excited about your trip.

The following five steps can help you plan travel budget, figure out how to trim travel expenses, and get ready to pack your bags. 

1. Create a reasonable travel budget

Like any other kind of budget, it helps to start with a list. Think about all the things you might spend money on when you travel. Travel and accommodation are obvious financial considerations, but remember that things like food and entertainment can also add up quickly. Get a pen and paper and write it all down – don’t forget vacation-related clothing or gear, souvenirs, and special experiences.

Once you ballpark how much your dream vacation might cost, you can start considering how to minimize expenses. You might, for instance, stay at a place where you can cook most (or at least some) of your meals. Cooking together can be a fun, relaxing experience, especially if you can experiment with local, seasonal groceries. Or plan a vacation to a destination where a lot of entertainment could be free, like the beach or a city with free museums.

2. Comb through your current budget for savings opportunities

Trimming your current spending is one of the easiest ways to save for a trip. So, your next step is to look through your monthly budget for areas where you can cut back. For example, maybe you’re spending on things like subscription services you don’t use, or perhaps you can cut back on discretionary spending like getting takeout meals or your clothing budget.

It is critical that you don’t borrow from any of your essential or important expenses, like retirement or emergency savings. However, if you already have enough in savings (experts recommend an amount worth at least six months of expenses — here are some suggestions on how to get started), then diverting some of the money you would normally put into savings into a travel fund is another way to temporarily save for something like a trip. You can also plan to use any windfalls — like a bonus, or large cash gift — towards your travel plans, as long as your other essential buckets are covered.

3. Set up travel-specific savings

The more you can save up to cover your vacation in cash ahead of time, the less likely you’ll be to go into debt if you end up putting more on a credit card than you planned.

Depending on how much time you have before your trip, you might consider opening a new high-yield savings account and putting a little bit of money into it each month specifically for travel. Divide your travel budget by how much time you have before the trip to figure out how much money you need to set aside each month, then set up an automatic direct deposit into your travel savings to do so. Doing it this way ensures that if you want to take a trip that costs more money, you can, as long as you give yourself enough time to save up for it.

4. Keep an eye open for deals

Traveling at off-peak times can save you a lot of money. If you can travel in the middle of the week or a time other than the holidays, you could find deals on things like airfare and accommodations. Booking your trip in advance can also shave some of the costs of traveling since last-minute trips can be pretty pricey. By researching the best time to travel, you can ensure that getting to your destination and where you stay take up as little of your overall travel budget as possible.

5. Factor in some wiggle room

Any budget is an estimation, and it’s always a good idea to leave some wiggle room, especially when it comes to travel. Unforeseen or forgotten expenses always crop up — like taxes, tips, gifts, and souvenirs — and you’ll feel less guilty about spending money on these things if you’ve padded your travel budget to cover them.

At the end of the day, with a little ingenuity, planning and time, your dream vacation can be possible.

If you need a little extra help financing your dream vacation to make it a reality, there are other fiscally smart ways to get there. For example, instead of using a credit card, most of which have variable rates, you might apply for a Discover personal loan. Personal loans offer a fixed rate and a set regular monthly payment that will never change. The predictability makes it easier to plan for and you can choose a repayment term that works for your budget.   

Learn More about Vacation Loans