Creating a Travel Savings Bucket: How to Fund Your Next Adventure

Our trip to Sintra, Portugal 2024

The $17.53 Vacation: Travel Hacking vs. Reality

Social media is full of glamorous trips paid for with points, miles, credit card perks, and other travel hacks. You are sold a promise that someone spent just $17.53 on a two week international vacation complete with high end resorts, amazing food, and incredible entertainment.

While it is absolutely true that you can get outsized value from your points and miles, and there really are ways to spend that little and get that much (which we will talk about later), the honest truth is that not every trip is going to be a travel hacker’s dream trip.

For some of your trips, cold, hard cash or a mix of cash and points may be what you need to make your dream a reality.

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Treat Your Dream Vacation Like a Monthly Bill

The most straightforward approach to working toward having the funds for a trip is to treat your future vacation like another monthly bill.

That’s right. You sit down to make sure everything is paid for the month: rent, credit cards, utilities, and the Euro summer trip you’ve been dreaming about since seeing that reel last year.

There are two approaches to saving for a future trip: a specific trip fund and a general travel fund. Let’s talk about both and which one we prefer.

Option 1: Give Your Trip a Price Tag

The first option is to choose your trip, plan the details of what you would like to do, research the costs, and work backward from there.

Say you want to go to Spain in 18 months. You could look up flights to Spain from your home airport, estimate the cost, choose a price point for the hotel where you want to stay, decide how you will get around while you’re there, choose a few excursions, and ballpark how much you expect to spend on food.

Take that total number and divide it by the number of months you have to save. For example, if your trip will cost $3,600 and you have 18 months to save, your monthly travel “bill” would be $200.

Voila! You now have a monthly target that helps ensure you aren’t stressing about how to pay for your trip when the time finally comes.

One of the biggest benefits of this approach is that you have a pretty clear idea of how much you need to save to make your trip a reality.

The downside? Travel costs are constantly changing. Flight and hotel prices can fluctuate based on world events, inflation, demand, and seasonality. This can work in your favor if prices drop and you suddenly have extra money available. But it can also create additional stress if costs significantly increase and you are left scrambling to come up with money you didn’t originally account for.

For this reason, it can be helpful to build a little extra cushion into your savings goal. That way, you can still enjoy your trip even if prices shift.

Option 2: Build a Travel Fund Before You Know Where You’re Going

The alternative is the more ambiguous, but potentially more flexible, travel fund.

Instead of saving for a specific trip, you simply keep a general travel fund going at all times. When you decide where you’re going, you already have money set aside to help cover the cost.

At first glance, it can seem challenging to know how much to save each month. But it really comes down to your personal travel preferences.

Do you take one big trip a year? A few weekend trips? A mix of both?

Start by looking at what you’ve spent on travel over the past couple of years if you want to maintain a similar pace. If you’re just starting to travel, take a realistic look at your life.

How much PTO do you have, and what type of trips will that allow you to take? Do you prefer domestic or international travel? Are you planning to take a “weekend warrior” approach, or are you really looking for one nice family vacation each year?

These questions can help you ballpark how much you actually need to save each month.

A family who wants to take multiple camping trips a year may have a very different travel budget than a family who wants to take one big international vacation every year. But both families will still need cash reserves to bring those trips to life.

So…Which Travel Fund Is Better?

I have probably the most annoying answer you can give: it depends.

The specific trip approach can be best for people who plan far in advance. It takes some preemptive planning to know exactly how much money needs to be set aside for a specific trip, but that planning can make the savings goal feel much more concrete.

The specific trip approach may also be best for those who are already on a tight budget. If you don’t have a ton of expendable cash or you have limited PTO, having a clear cut goal and deadline for saving may work best.

A general travel fund, on the other hand, is better for those who have a little more flexibility and want to make sure they have a bucket of money available when a travel opportunity or travel whim comes along.

While you can obviously change your mind about travel plans with either savings strategy, it seems much easier to change course with a general travel fund than it does with a fund you’ve already emotionally tied to a week in Spain.

Our Favorite Approach: Keep the Bucket, Pick the Trip Later

So, as promised, which approach do we prefer as a family? ‍

We keep a general travel fund with no specific trip tied to it.

There are a few reasons this works well for our family.

First, while I typically have our trips at least mentally plotted out for the next 18 months, my ideas will rapidly change between five or six different destinations before I finally settle on one. This is partly because we are open to many different travel experiences, but also because I am always in the market for a good travel deal and, honestly, because I am easily influenced by a cool travel video or story!

We also usually travel using a mix of cash and points. This allows us to save on flights and hotels while potentially spending more on other experiences. Both of these factors can make it difficult to accurately predict the total cost of a trip far in advance.

Finally, I want to acknowledge that we are privileged to be a dual income household with a couple of side hustles. That allows us to pay upfront for some of our smaller trips, while allowing our travel savings bucket to be used for bigger adventures. ‍

There Is No “Right” Way to Save for Travel

Overall, there isn’t really a right or wrong answer when it comes to saving for a trip.

Both strategies have pros and cons, and you may even find that blending the two approaches works best for your family. You might save a general travel fund throughout the year and then create a more specific savings goal once you choose your next big adventure.

The important thing is that you are saving before the trip instead of figuring out how to pay for it afterward.

Whether your dream is a week in Spain, a family camping trip, or a spontaneous weekend getaway, creating a travel savings bucket gives you something incredibly valuable: the freedom to say yes when the opportunity comes along.

Because at the end of the day, the goal isn’t just to save money.

It’s to use that money to create memories and experiences with the people you love.