Pay for Your Dream Vacation: A Saving Strategy that Works

Vacation savings plans
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If you’ve ever been to Disney World, the Grand Canyon, the National Mall or any other big tourist destination, you’ve probably seen the vacation meltdown. Three or four days into the trip, someone in the family has had enough: there’s pouting, screaming and the dreaded threat of “I refuse to take another step until I get a nap.”

In my observation, this is usually either a preschool-aged kid, or a dad.

Let’s face it, vacations can be stressful. Between bad weather, cranky kids, days of driving and lots of crowds, there’s a lot that can get under your skin.

For many families, paying for the vacation can be the most stressful part. Do you want to go on vacation without having to worry about how you’re going to pay for it? Do you want to sleep easy knowing that the vacation is already paid for? Are you still paying off the credit card from last year’s vacation? Then consider vacation savings plans.

What are Vacation Savings Plans?

When my wife and I took a trip to Alaska for a friend’s wedding, we only had one savings account for all our needs. After getting home and adding up the receipts, I was surprised at how much the trip had cost — we were enjoying ourselves so much, I didn’t realize how far we had gone over our budget. It wasn’t a nice surprise to come home to!

To prevent this situation on our next trip, I came up with the idea of the vacation savings account. Here’s how it works:

As part of your monthly budget, decide how much you want to save for vacations. Either pick an amount to deduct from each paycheck and save that, or decide how much you’d like to spend annually and divide by your pay interval (monthly, weekly or bi-weekly) to get your target amount.

Create a separate savings account for your vacation fund. There are a bunch of great online banks, but one of my favorites is Chase because they’re offering Penny Hoarder readers a $250 bonus when you open a new checking account.

After putting money away for retirement (you are saving for retirement, aren’t you?) and your other monthly savings, put the dedicated amount in the account and watch your money grow.

Pay yourself first by setting up an automatic transfer from the account your paycheck goes into — this way, you won’t be tempted to spend this money on something else.

Use Your Vacation Savings Plans to Budget Your Trip

When it’s time for you to plan your next vacation, you’ll know exactly how much you can spend — the amount that’s in your vacation account.

Budget your vacation just like you do your household budget (you do have a household budget, don’t you?). Use trip planning sites for your destination to help you plan what to budget for hotels, food, airfare and other needs.

Once you have a rough idea of what you can afford, fine tune it. After you book airfare and hotels, replace your estimates with the actual costs (don’t forget tax and baggage fees) and use the estimates from the trip planning sites to set aside money for food.

If you are driving, estimate gas costs for your trip. After you’ve done all this, decide whether you want to set some of the money aside for souvenirs.

My wife and I put $100 each per paycheck into our account, and after 10 months we had $2,000 put away. When we decided to take our son to Disney World for the first time, we already had a budget to work with. After crunching all the numbers, we discovered that we had enough left over to upgrade to a nicer hotel room!

Make the Most of Your Vacation Savings Plans: A Case Study

To make the most out of your vacation savings account, do your research. You should always be looking for the best travel deals and insider tips on how to save money and time on vacation.

The couple of hours I spent online preparing for our recent trip to Disney World paid off bigtime.

We were able to save hours waiting in lines because I learned touring strategies from some local bloggers. has some great infographics comparing weather, crowds, seasonal rates and even hurricane activity to help you choose the right time of year to visit.

Josh at breaks down crowd levels at each of the four Walt Disney World theme parks to help you choose which park to go to on each day of your visit. He posts his recommendations about eight months in advance, usually within a few days of Disney officially releasing the park hours.

These time savings helped us see more of the park and enjoy our time there rather than standing in line all day.

Additionally, we saved a lot of money shopping between available deals. posts constant updates as the company releases a variety of new promotions: seasonal offers, free dining offers (here’s a great article to help you decide whether a room discount or free dining will save you more money), AAA discounts, AARP discounts, military discounts and more. Booking through a travel agent can also get you a great deal.

I compared the Florida resident discount with the military rate and determined that the military deal would save me more money.

Bringing a Dream Vacation Within Reach

Once I saw how well the vacation savings account strategy worked for our Disney trip, I was ready to take it to the next level. My wife has always wanted to go to New Zealand, which seemed like an unreachable goal until I changed my attitude.

Rather than convincing myself we couldn’t afford it, I sat down and tried to figure out how I could afford it. If we saved $167 a month, at the end of five years we would have $10,000 saved. That’s the vacation of a lifetime and I don’t have to worry about how I’m going to afford it.

Your Turn: Have you used a vacation savings account to help plan a trip?

Kevin Mack is a freelance writer/blogger from Jacksonville, FL. You can check out his blog at