How to save for a family vacation
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Family vacations can be costly, and with persistently high inflation, many families are modifying their travel plans or canceling them altogether.
According to Bankrate’s summer vacation survey, 80 percent of those with summer vacation plans are altering their plans due to inflation. But higher prices don’t mean you have to forego a family trip.
Instead, consider taking some time to plan in advance and develop strategies to save up enough for your travel destination.
Family vacation statistics
- While 63 percent of U.S. adults say they are taking a summer vacation this year, 80 percent of those are modifying their plans due to inflation.
- Of those who aren’t taking a summer vacation this year, 58 percent say it’s because they can’t afford it.
- Inflation was the top-cited reason for not being able to afford a summer vacation, cited by 62 percent of those who can’t afford it.
- The most-cited ways vacationers are changing their plans due to rising prices are by selecting less expensive accommodations/destinations (29 percent), engaging in cheaper activities (28 percent), driving instead of flying (26 percent), taking fewer trips (26 percent) and shortening their trips (26 percent).
- The average cost for a one-week vacation in the U.S. per person is $1,982 — that would be just shy of $8,000 in total for a family of four.
Sources: Bankrate’s 2023 summer vacation survey, Budget Your Trip
Planning and saving for a family vacation
To avoid overspending and ensure a memorable trip, the key is planning ahead and saving enough in advance. Here are tips for setting your vacation goals and achieving them.
Decide where to go on vacation
Rising costs may have made some travel destinations unrealistic for your budget. In fact, one of the most cited ways that vacationers are changing their summer vacation plans is selecting a less expensive destination, according to Bankrate’s summer vacation survey.
Choosing a destination that fits your budget and your family’s needs is crucial when planning a family vacation. One way to save is by considering locations that are less popular or less touristy. You might also want to look for destinations that offer plenty of free activities, like parks and museums.
Factors to consider when choosing a vacation spot include:
- Ease of access
- Accommodations for different ages
Here’s a look at some popular travel destinations and what a one-week trip there would cost, on average, per person.
Calculate expenses and budget travel
Whether your family is planning a beach getaway or a visit to a historic city, it’s time to determine the costs.
Budgeting your trip is one area where you can involve your kids in the process. Break down the numbers for airfare, local transportation, lodging, entertainment, food and so on. Show your kids the total and discuss how they’ll help you save that amount and stay within predetermined spending limits.
Be sure to factor in the possibility of unexpected expenses, too, such as medical emergencies or unplanned activities.
When traveling internationally, you’ll also want to account for exchange rates and foreign transaction fees. There are some payment strategies you can take to reduce how much you spend on conversion, such as by using a credit card with no foreign transaction fees.
When it comes to finding room to cut costs, remember that you can often save when traveling with a family by booking shared rooms for kids and a shared rental car, rather than individual rooms and cars. You can also take advantage of group discounts for things like entrance fees, tours and other activities.
Start budgeting for your vacation by utilizing a travel budget template and budgeting apps.
Set a timeline
Typically, the farther in advance you plan your vacation and start booking, the more time you have to save and get better deals. But your exact timeline will vary depending on the destination, estimated cost, season and how many people you’re traveling with.
For domestic travel, it’s best to start planning at least three or four months ahead. This will give you enough time to research and book flights and accommodations. You might want to give yourself more time, however, if you’re planning a trip during peak season or a holiday weekend, in which case booking at least six months in advance can help ensure you secure the best deals.
International destinations often require planning six to nine months in advance. In addition to flights, accommodations and activities, you also need enough time to research visas, vaccinations and passports.
Other factors can also impact what your timeline looks like. A cruise vacation, for example, may require more advanced planning, since you need to choose a cruise line, secure your desired stateroom and book shore excursions before the cruise fills up.
How to build your savings
Paying for a vacation can be expensive, and it’s important to begin saving for it as early as possible so you can avoid holding onto debt and have a cushion of support for unexpected expenses during the trip. Saving can include setting aside money from your paycheck, holding off on purchases and adding that money to a vacation fund or working a side hustle to earn some extra cash.
Open a savings account dedicated to the vacation
A savings account dedicated to your trip can help you keep your vacation savings separate from other funds and motivate you to reach your goal. Having this separate account gives you a clear picture of how much you’ve saved and how much you need to meet your budget goal.
Many banks offer high-yielding savings accounts, which means that your money will earn more interest over time than it would in a traditional savings account or a checking account. If you plan far enough ahead, having a high yield can significantly boost your savings and help you meet your savings goal faster.
Cut back on costs
You may need to limit some day-to-day spending to build up your vacation fund. Some ways to cut costs include:
- Make food at home instead of eating out.
- Cancel subscriptions you don’t use.
- Brew your own coffee.
- Shop around for cheaper, off-brand groceries and products.
- Negotiate monthly bill costs.
- Avoid bank fees.
- Reduce energy consumption.
Create extra income
If cutting back on expenses isn’t enough, you may need to look for ways to increase your income. That could mean picking up some extra shifts or hours at work, or you can look for alternate ways to boost earnings, such as by taking on a side gig.
Bankrate’s take: A 2022 Bankrate study found that 31 percent of U.S. adults have a side hustle, and 17 percent of those are using the income from it to contribute to savings. Side hustles can include anything from doing freelance writing to delivering food.
Some other ways to make extra income include:
- Sell stuff you don’t need on an online marketplace.
- Participate in paid surveys and research studies.
- Rent out a spare room on Airbnb.
- Open up a rewards credit card and earn points back on purchases.
Track your savings goal progress
Once you’ve determined a savings goal and implemented some strategies to meet that goal, monitor your progress so you stay on track and achieve the savings target for your vacation.
You might want to track your progress using some kind of visual representation, whether that be in a traditional spreadsheet or a savings app. List your savings for each week or month in your tracking method, and add up the total savings at the end of each period.
If you find you’re not hitting your savings targets, don’t be discouraged. Re-evaluate your savings plan and consider other ways you can save more money.
Vacation planning frequently asked questions
How to do a cheap family vacation?
Here are some tips to make your family vacation less costly:
- Find a more affordable destination.
- Travel off-season.
- Book in advance to get better deals and discounts.
- Use loyalty programs and rewards.
- Rent an apartment or vacation home instead of staying at a hotel.
- Take advantage of group discounts on activities.
- Find free or low-cost activities, like museums and parks.
- Pack light to save on luggage fees.
How can I save for a vacation fast?
The first step toward saving for a vacation is setting a specific savings goal, based on how much you estimate the trip will cost, and creating a budget to meet that goal.
Then, you’ll need to cut back on spending, earn extra income or both to start building your vacation fund. Consider selling used items or picking up side gigs to increase your earnings.
It’s also important to find the right savings account to store the vacation fund, which should come with a high yield and low or no fees.
How much should I save for a vacation?
How much you should save for a vacation will vary depending on the destination, travel dates, family size and activities you plan to do.
When researching and calculating the cost of a vacation, make sure to consider flights, local transportation, accommodations, food, activities and a cushion of extra savings for unexpected expenses. Use a site like Budget Your Trip to find average costs for a variety of destinations.