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Serving members worldwide since 1935.
Henry MolinaWritten by:
Henry Molina
Lafayette Federal Credit Union
Vice President, Business Development

After being restricted during lockdowns since the beginning of the COVID-19 pandemic, many Americans are now ready to pack their bags and explore the world this summer.

But for most families, it’s not as simple as just packing your suitcase and heading off to exotic locations. Knowing how to save and budget for your next vacation is essential to planning your next getaway.

To help you create a savings plan for your exotic (or local) destination, we’ve compiled key steps to take, so that you can effectively build your vacation savings.

Ten Steps to Saving For Your Vacation


vacation funding


1. Research and Create a Vacation Itinerary

First, you need to determine what your dream vacation is. Do you want to kick back on a beach with endless beverages? Experience cultural sites and visit historical museums? Get your adrenaline pumping with adventures and activities?

Knowing what you want to do will shape how much you’ll need to budget. You’ll want to research your destination and the attractions it offers before creating a vacation fund. Then, you’ll have an outline of what you have established to be essential for your grand getaway, shaping your trip itinerary.

Figuring out your itinerary is one of the most exciting, but equally important, parts of planning a vacation. During this stage, you can dream big and take a close look at everything you want to do and see. From there, you’ll be able to get a basic idea of costs and can begin building your budget.

2. Make a Plan to Save for Vacation

Once you have finalized your destination and the activities you want to do while you’re there, you can get started with figuring out how much it’s all going to cost. Research ALL expenses you will incur for the trip — such as, costs for hotels or vacation rentals, transportation, food and drinks, and the activities you want to enjoy.

By tallying up the total anticipated expenses, you can work backward to figure out exactly how much you need to save each month before you plan to leave. Additionally, you’ll want to make sure you save a little extra so you have some flexibility — in case you want to partake in other additional activities or shopping, prices suddenly increase, or you face an unexpected expense.

Without a clear plan, it’s much more difficult to meet your savings goals — not to mention, you risk spending more than you intend to while you’re on your trip. When you’re planning for a vacation, make sure you allow yourself adequate time to effectively formulate your plan.

3. Open a Separate Account for Your Vacation Funds

When you have specific funding set aside that’s meant only for vacation, it’s easier to save the right amount for this purpose. You’re much less likely to spend that money on something else when you have a dedicated account for your vacation savings.

At Lafayette Federal, we offer several savings account optionsOpens in New Window that will make it easy for you to stay on track and save the vacation fund you need. Our Share Savings and Preferred Savings accounts can be opened with a deposit of just $50. You can earn between 0.1% and 0.3% APY as well as dividends on your account balance.

If you are able to start saving well in advance of your trip, we also offer variable-rate and fixed-rate certificate accountsOpens in New Window with varying term lengths and competitive rates. Certificate accounts can be a great way to save for vacation funds because term length restrictions make it far less likely that you’ll be tempted to withdraw the money for other reasons.

4. Save a Little from Each Paycheck

One easy way to stick to your savings plan is to set aside a portion from each paycheck. Although it’s tempting to want to save huge chunks of money all at once, this can make it hard to stick to your goals. Instead, save a small, but fixed amount from your paycheck so you can continue meeting your additional obligations.

It might take some time hit your savings goal, but chances are you won’t miss the funds too much when you save in manageable increments. And, assuming you’re creating your vacation plan ahead of this step you’ll know exactly how much you need to set aside each month before your departure date.

5. Reduce Discretionary Spending

If you need to save for your dream vacation in a shorter timeframe, cutting unnecessary spending from your budget will be crucial. While saving in small increments is a recommended approach, not everyone has the luxury of time to do so. To make ends meet more quickly, you’ll need to take a close look at where your dollars are currently going and eliminate spending that isn't essential.

Many people spend more money than they realize on discretionary expenses, like dining out or online subscriptions. Keep track of your expenses for a couple of weeks so you can identify any patterns that might be making it more difficult to save for your vacation. Remember that cutting unnecessary spending now means you’ll get to indulge more when you’re enjoying your trip!

6. Create a Vacation Vision Board

Many people struggle to reduce their spending, and this is how vacation plans can easily get derailed. If you’re not able to save enough money for your trip, you won’t be able to go on vacation! Saving can be hard, especially when you’re looking at a big number.

One way to keep track of everything you want to do on vacation is to create a vision boardOpens in New Window. You can create a vision board digitally or put together a physical collage that you post in an easily visible spot, such as your refrigerator or bathroom mirror.

If you’ll be vacationing with a partner or your kids, create the vision board together! That way, you’ll all feel extra excited about the upcoming trip — and you’ll stay motivated to keep saving. For instance, whenever you start to feel the itch to go dine out, your vision board will remind you of why you’re saving and the excitement that’s about to be yours in the near future.

7. Take Advantage of Credit Card Points and Rewards

Who doesn’t like getting things for free? You can reduce or eliminate some costs by taking advantage of credit card points and rewards. A Lafayette Federal Credit CardOpens in New Window offers points earned with each purchase towards travel and merchandise — without charging an annual fee or foreign transaction fees.

Using points or cash back can have a huge impact on your vacation budget. Cash in on those rewards to make your vacation fund stretch even further. We offer credit limits up to $50,000 with APR rates as low as 8.90%.

8. Plan for the Unexpected

No one wants to think about catastrophe, but one of the secrets to truly enjoying a dream vacation is planning for every possibility, even the unexpected. Anything can happen when you’re out of town, so it’s important to know what you’ll do if things don’t run as anticipated.

When it comes to planning ahead for problems during your vacation, a credit card can be keep you protected. A Lafayette Federal Credit CardOpens in New Window comes with several perks. Credit cards are safer than cash and are accepted worldwide. Plus, if your credit card is stolen while you’re out of town, you can quickly freeze the card without losing access to the cash inside your bank accounts. Additionally, our cardholders enjoy up to $1,000,000 in free Travel Accident Insurance when they use the card to purchase travel items like plane tickets, train tickets, and more.

9. Know When to Book Your Vacation

Believe it or not, there are actually days and times when it’s more affordable to book flights and hotels. Knowing when to book can help you stretch your dollars further, which could be the difference between adding an extra activity to your itinerary and not being able to afford it at all. Do some research and find out when the best times to book are for your specific vacation.

Also, it’s most advantageous from a cost perspective to book well in advance of your trip. Sometimes, travelers hesitate to do so because they’re concerned about last-minute changes in the itinerary. But with your solid plan already in place, it should be pretty straightforward to get tickets ahead of time (and hopefully save money in the process).

10. Research Unexpected Travel Fees

Even with the best planning, people may overlook miscellaneous travel expenses, such as fees associated with converting dollars into international currency or for using foreign ATMs. These additional costs can quickly add up if you’re not careful.

One way to minimize fees is with a Lafayette Federal debit cardOpens in New Window. You can access your account 24/7 from anywhere in the world, making it easy to stay on top of things while you’re traveling. If you do need end up needing extra funds to cover a surprise event, you have easy access to your checking account — even if you’re thousands of miles away from home.

Our debit cards give you access to a worldwide network of surcharge-free ATMs. This means you can withdraw cash from anywhere you travel without incurring a surcharge fee. Those couple of dollars at the ATM may not seem like much at the moment, but they can add up quickly, especially if you are frequently withdrawing money.

Jump-Start Your Vacation Savings With Lafayette Federal Credit Union

At Lafayette Federal Credit Union, we can help you get started on your vacation fund, so that you’re in good financial shape for a fun, stress-free trip. With our savings accounts, and credit and debit card perks, we can help ensure you’ve got the funds you need — and you enjoy the peace of mind you need when you’re on your vacation as well!

Not a Lafayette Federal member yet? You can become a member by completing an online membership applicationOpens in New Window.

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