Open a Dedicated and Separate Savings Account
If you are serious about your effort to fund your travels directly, rather than out of whatever is in your bank account when your travel date comes around, this is a great step. In most cases the cost to set up an account is zero, save for a bit of your time.
If you go this route, make sure you do not face any minimum balance penalties when you actually start to spend the money you’ve saved. It may also be useful to have ATM and online access to the account, which will let you draw money directly from the account when booking and while you travel. This keeps your regular accounts with your “trip money,” separate, so money you set aside for the trip is the money you actually spend.
Using a single, dedicated account will also help you keep on budget during your trip, as the easiest way to know how much you are spending is to track the balance of your dedicated travel account. You can keep an eye on your balance as your trip goes on.
Keep reading for more...
Set up Automatic Transfers
This is the easiest step. Once you have a dedicated account set up, you fund it automatically. If you don’t trust yourself or family members to do so, set up an automatic transfer at a regular interval to do it for you. This is easy to set up and can really add up over time. A transfer of $14/week ($2/day) adds up to nearly $730 by the end of a year. Or check out our many savings challenges on Be Secure Financially.
If you’ve set up a recurring direct deposit for your paycheck, often you can work with your employer to have your deposits split among multiple accounts. You can have 1 or 5 or 10 percent of your paycheck go straight into your dedicated travel account—without having to move it yourself or spend it.
Keep reading for more...
Let Someone Else Do It for You
You can do the whole thing online—and even have someone twist your arm. Check out SmartyPig.com, where you choose a savings goal when you set up your account, and let SmartyPig keep the transfers going until you reach your goal. You can have family and friends contribute as well.
When you reach your goal, you have several options on how to collect the money, including transfers back to your banking account or gift cards at popular retailers. On top of that, SmartyPig offers reasonable interest rates, so your money works for you as well.
You can also earn $10 here for every friend you refer!