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How to save money and take a vacation without going into debt

Kevin Gallegos Vice President of Phoenix Operations Freedom Financial Network
How to save money and take a vacation without going into debt

Studies show that taking a break from work and everyday life stress is good for physical and mental well-being. Vacations are energizing. But they can be expensive, too. With some planning, it’s possible to enjoy a vacation without going into debt.


Do create a vacation budget

Be realistic in itemizing all anticipated expenses, and create a detailed breakdown of your ongoing living expenses and income. If it looks like you’ll need to go into debt to take the trip, stop and re-think your plan. Can you change dates (traveling in off season or shoulder season can save hundreds or thousands or dollars), choose different accommodations, or make other adjustments? The goal is to create an attainable savings goal. Otherwise, the savings (and your vacation trip) won’t happen.

Do treat savings as a mandatory bill

To help get into the savings habit, set up self-billing for savings. Some financial institutions permit automatic withdrawal from checking to savings accounts. Your employer may provide for automatic deposit into a savings account, too. Record this savings like a bill every month. If you need to, start small – like $25 or $50 per month. Then up the amount whenever possible.

Do look at your credit card statements

Do you have a credit card that offers rewards points? Check statements to see how many points you have accumulated. Then visit the rewards website to learn if you can convert the rewards into cash, gift cards, or travel-related items. Some credit cards even double the value of your rewards at specific places.

Do earn more money

Think creatively. Part-time jobs at the mall can work. So can babysitting, doing yard work for others, tutoring, selling unneeded items on eBay, holding a garage sale, or even putting change into a jar every night. Even small amounts, saved regularly, will accumulate surprisingly quickly.

Do give up a favorite (and expensive) habit

Whether it’s expensive coffee drinks or doughnuts or lunch out each week, the costs add up. You’ve heard it before, but do the math and you might take action. For instance, if you hit Starbucks twice a week, break the habit for 8 weeks and save $64. Do it for a year and it’s more than $400.


Do not use the credit card

Research shows that people who do not use debit or credit cards are less likely to throw that extra item into the shopping cart or make an extra purchase, and typically spend 15-20 percent less than when using a credit or debit card. Avoid spontaneous purchases by leaving credit cards at home. Some people even freeze their credit cards in a bowl of water in the freezer. The time it takes to thaw it out can serve as a deterrent, or at least provide time to really decide if you need to use it.

Do not think you have to do it all right away

Rome wasn’t built in a day, and neither will your savings. You may need to wait and take the dream trip next year, or modify plans (Disneyland instead of EuroDisney, Boston’s North End instead of Italy!).

Do not negate the idea of a vacation sans travel

A faraway destination might not be in your budget this year, but remember that the point of vacation is to rest and relax. It’s possible to do that close to home; think about day trips. Make a list of places and activities in your area that you’ve been wanting to check out. Consider amusement parks, museums, theater shows, zoos, water parks, festivals and family fun centers like bowling alleys, go-kart racing and miniature golf. Some public libraries offer free passes to museums.

Do not blow windfalls

If and when you receive extra money (from a freelance job, gift, yard sale, etc.), save rather than spend that money.

Do not just keep savings in your spending account with a mental note that they’re saved

Instead of just saving money in your spending account, put them in an investment or savings vehicle you’ve selected. If you don’t want savings tied up for the long term, you might choose a money market account that allows withdrawals only at certain minimum levels. Or – thinking longer-term, for future vacations – purchase short-term CDs (three- or six-month terms) on a regular basis. The strategy will provide interest earnings (and force you to constantly reinvest, saving more).

Jumping cartoon

Remember that the goals of a vacation are rest and relaxation. They are worthwhile goals to attain, and worth saving for. Some simple budgeting and planning will help make sure you can get that R&R realistically, without going into debt.

More expert advice about Budgeting

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Kevin Gallegos Vice President of Phoenix Operations

Kevin has worked with Freedom Financial Network since 2005. Before that time, he held the position of enrollment sales supervisor for Nationwide Financial Solutions in Tempe, Ariz. Kevin also has worked as a business analyst and customer service...

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