Here are 4 money-saving tips for your next vacation from a financial literacy expert
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With parts of the world reopening to tourists, many people may be looking to plan their next vacation. For some, this may be the first time they're venturing out since the onset of the coronavirus pandemic — and even with many travelers sitting on large stockpiles of points and miles, trips can be costly.
Sure, you can potentially use your rewards to cover your flights and hotel stays — but then there's food, tours, entrance fees to attractions, souvenirs and many other expenses. These can quickly add up, and if you're not careful, they could cause a major hit to your household's bottom line.
Fortunately, there are a number of concrete steps you can take now to save money as you look ahead to your 2022 travels.
Here are some ways to help pay for your next trip from Shirley Yang, vice president, Marcus by Goldman Sachs.
Set a goal — and a date to reach it
The first part of this suggestion is relatively simple. After all, anyone can set a goal. But according to Yang, setting a concrete deadline by which to hit that goal is what's complicated.
"Start off with estimating the extra expenses you expect to incur during the trip," she says. "Then, pick a specific date at least a month in advance of your departure date to have that amount of money set aside for your trip. This gives you a concrete deadline but also allows a grace period in case you come up just a bit short."
It may seem simple, but just putting pen to paper and articulating your goal and date to reach it can go a long way toward setting you up for success.
Related: 9 tips for taking a luxury vacation on a budget
Open a high-yield savings account
Once you have your goal in mind, another great step to take is to open a high-yield savings account (HYSA). You might currently have a traditional savings account affiliated with your primary checking accounts at your bank, but whether you have $10 or $10,000 in there, it's probably earning next to nothing in interest.
Compare that with the high-yield Online Savings Account from Marcus by Goldman Sachs that's currently offering an Annual Percentage Yield (APY) of 0.50% as of today (Dec. 7, 2021). That's more than four times higher than the national average.
With no minimum deposit, no fees, same-day transfers to (and from) most banks, and FDIC insurance, this could give your cash reserves a nice boost according to Yang.
Find ways to save on household expenses
Another way to save for your next trip involves those everyday purchases you make. After all, if you need an item, why not get it for less money?
One way to do this is via online shopping portals. If you have never utilized these sites before, you could have missed out on bonus cash for your online purchases. By beginning at one of these portals, rather than going directly to a merchant's website, you could earn an added bonus when shopping at select stores. This could be as low as 1%, but we've seen examples of 10% or even more — especially around the holidays.
Another option is to utilize subscription options for those household staples you need on a regular basis. Many online retailers offer a discount if you sign up for recurring shipments of select items. Again, if these are things you need to order anyway, it makes sense to save on them — though be sure to cancel (or postpone) future unwanted deliveries before they ship.
Once you've pursued these money-saving avenues, you could take those savings and funnel them right into that high-yield savings account — thus earmarking them for your trip.
Choose a credit card that gives you more
There are many great options out there for credit cards with cash-back rewards or with limited-time welcome bonuses. Some travelers may want to add one of these new cards to their wallets ahead of a trip. That initial bonus can be a good start to a vacation fund – then any additional earnings you get from your everyday purchases can further boost your account balance.
In addition, if your vacation will see you leave the country, be sure to look for a credit card option with no foreign transaction fees. If not, you could be adding up to 3% to every purchase you make abroad.
Finally, once you're on the trip, be aware of Dynamic Currency Conversion (DCC) — where you're charged in U.S. dollars instead of the local currency, generally at a much lower exchange rate.
Bottom line
It's exciting to think about the prospect of more normalcy in the world of travel, but saving up money for your next trip can be stressful. Fortunately, there are a number of ways to accomplish this — starting with setting a goal and a deadline and then taking steps like opening a high-yield savings account or adding a new credit card to your repertoire.
All of these items can help you feel confident as you prepare to embark on your long-awaited adventure.
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