Whether you’re backpacking through Western Europe or trekking the Amazon, it’s always exciting to plan your dream vacation: restaurants, resorts, beaches, monuments, you name it.

But, very quickly, you end up at the subject of budget: How do you pay for your trip, especially since the average vacation for one family can cost thousands of dollars?

This is why you actually need to create (and maintain) a vacation fund for your trips. Below, we’ll explore how much you need to save for vacation, and how to stretch every dollar to make it count.

The short answer is, “It depends.” 

If you simply drive across state lines to camp in a national park or a forest, you can spend anywhere from $8 to $110 per day, especially if you already have camping gear like tents, cooking equipment, backpack, etc.).

On the other hand, if you’re flying across continents and intend to lodge at three-star hotels, drive around the area, and experience local culture, you’ll spend significantly more.

Where you’re traveling, your planned activities, and your amount of disposable income all factor into how much you should set aside for your trip — and will require varying degrees of budgeting. Whatever your budget looks like, there are several creative ways to save money, like cutting back on unused subscriptions, cooking at home more frequently, and using savings hacks such as the 50/30/20 rule.

A dedicated vacation fund makes traveling less chaotic — it helps you stick to a budget, avoid dipping into your reserves, and promotes healthy savings habits that eventually contribute to your long-term financial health.

Helps avoid overspending

According to recent data from GOBankingRates, 33.75% of Americans report overspending on their vacation, with 11.38% report going significantly over budget for their trips.

It’s easy to understand why: There’s always another souvenir to buy, local dishes to try out, or attractions to visit.

And, of course, holidays are a great opportunity to reclaim your work-life balance, bond with family, bask in nature, create memories that last a lifetime, and just explore the world's beauty — it’s therapeutic and memorable.

But it’s hardly worth it if a few days of fun eats up all your extra cash and sets you up for financial difficulty and stress for several weeks (or months) down the line, especially if you can have just as much fun by sticking to your budget.

A vacation fund helps you save the money you need for your holidays. But even better, it creates a soft cap on how much you can spend to avoid dipping into savings in the heat of the moment.

Promotes healthy saving habits

According to figures published by Ramsey Solutions, 36% of Americans (119.48 million people) have absolutely no savings at all, while another 9% have less than $1,000 saved up. 

It’s not purely because of low incomes either: The report also finds that one-third of all Americans who earn over $100,000 a year still live paycheck to paycheck. In other words, saving consistently is a superpower that’s hard to master, and dipping into your reserves for every emergency, purchase, or vacation can be a major setback.

Building a vacation fund gives you a savings plan that helps cultivate a mindset of deferred gratification that will eventually extend into how you manage your finances in general. You can repurpose that motivation to drive you to learn more about personal finance, including high-yield savings accounts, credit card interest rates (to cut down on your debt), and starting a side hustle to grow your travel savings faster.

It doesn’t mean you don’t get to treat yourself at all — rather, it encourages you to manage your money thoughtfully, considering how every purchase will affect your finances.

Fosters financial preparedness

A recent Bankrate survey finds that more than half (57%) of Americans couldn’t cover an emergency of $1,000 using funds from their savings account. That level of vulnerability puts you at a disadvantage since a car accident, sudden injury, or illness can wreak havoc on your personal finances — whether you’re on vacation or not.

If worse comes to worst, a vacation fund can be converted for your day-to-day use and can serve as a buffer that helps shield you from unexpected emergencies.

Reduces travel-planning stresses

Sometimes, planning for a dream trip (with all its accommodations, food, and activities) can become so financially overwhelming that the stress makes it difficult to enjoy the trip itself. But, if you create a vacation fund and stick with it, it can help you avoid a lot of decision fatigue and narrow down your options to what you actually afford.

Let’s face it: Saving money can be hard, especially when you’re bombarded with ads for stuff you can buy in one click. But, if you’re serious about starting (and sticking with) a vacation fund, you need to make your savings goals as concrete as possible. 

Ready to get serious about your travel plans? Here are seven steps to help you kickstart your vacation fund.

1. Identify travel priorities

The first thing you need to do is identify your primary reason for traveling in the first place. For instance, if you’re planning a ski getaway, you could end up in Switzerland or one of several year-round ski resorts scattered across the United States, Canada, and Scandinavia.

Likewise, if your goal is to experience Oktoberfest, you might decide that Germany, Argentina, Australia, Canada, or even China are your preferred ways to celebrate German culture. If you're visiting the United States for SXSW, you can mark your calendar and create an agenda to take you across Texas, trying out local cuisine, music, and attractions along the way.

Your travel priorities will ultimately determine where you visit, how deeply you explore, how long you spend there, and how much money your next trip will cost you.

2. Pick a destination

Your destination is the single biggest factor that will affect your vacation budget. For instance, there are parts of Africa and Eastern Europe where you can explore rural communities, lodge at budget hotels, and try out local cuisine for $100 per week; meanwhile, the average Emirati hotel costs 536 AED or $146 per night.

If budget is a dealbreaker for you, you might need to pull some destinations off your bucket list — or save up for a little longer before embarking on your trip.

3. Decide when to go

If your vacation plans coincide with a huge number of holiday-goers, you’ll have to spend more on your flights, food, and accommodations. For example, the majority of the 14.36 million tourists who visit Dubai annually usually arrive between November and April. If you visit during that bracket, you’ll find that flights, accommodation, feeding, and sightseeing will be more expensive since there’s a higher demand for it.

Visiting outside peak seasons will be just as fun — and lighter on your vacation budget.

4. Research everything about your vacation

Create an outline of the places you intend to visit, sights to see, experiences to try out, and most importantly, research what the experience feels like by reading reviews from people who have visited your target destination. This can help you decide when to travel to avoid adverse weather and chaotic festivals — and even lock in better discounts.

5. Determine vacation expenses

Make a step-by-step breakdown of how much you expect to spend on every experience during your vacation, including:

• Travel expenses: Consider flights, cruises, road travel, gas for car trips, special permits, and any other travel-related expenses.
• Accommodations/lodging: Use Google Travel, TripAdvisor, Airbnb, or Hotels.com to compare prices.
• Transportation: Costs in this category should include rental cars, public transit, scooters, taxis, and rideshare services.
• Food: Decide whether you’ll cook or rely mostly on takeout and food delivery.
• Activities: Determine which activities are the most important to you, like museums, hiking, rafting, or visiting historical monuments.
• Souvenirs: Give yourself a ballpark range to splurge a little on special destination-specific purchases without overspending.
• Currency: For international travel, be sure to include foreign exchange fees and consider the current exchange rate between your country’s currency and your destination’s.

6. Set aside emergency funds

Whether you come down with a sudden illness or sprain your ankle during a hike, you need to plan for emergencies during your vacation — especially since roughly 40% of the world’s 1 billion tourists either fall sick or get injured every year.

Your travel fund should include extra money for healthcare, getting out of a warzone, losing your belongings, or trying to navigate an unexpected natural disaster at your travel destination.

7. Start budgeting for your trip

Set a target contribution and put money away regularly to build up your vacation savings account. Choose the savings frequency that makes the most sense for you. For example, if you’re paid biweekly, it makes sense to put money aside every two weeks as soon as you’re paid.

It’s also wise to split up your targeted savings by month or week — depending on your needs and preferences. For example, if you have three months until your trip and you want to save $1,000, you should aim to set aside around $350 each month. 

This may mean temporarily scaling back in some areas as you allocate money for your next vacation (like opting for less takeout, saving up your tax refund, or splurging a little less often).

After you’ve built up your vacation fund, you still need to be strategic with your expenses and try to get the most value for your money. Below are some of our best tips and tricks to help you stretch your savings and get the most out of your vacation fund.

Spend less with Accrue Savings

Accrue helps savers like you earn discounts from the brands you already use to help you reach your savings goals faster. We help you save up for the things you want — whether it’s jewelry, a new smile, or a dream vacation!

Instead of using buy-now-pay-later (BNPL) services with high interest fees, Accrue offers FDIC-insured accounts that make it easy to put money aside on a schedule that works for you. With Accrue, you can save as much or as little as you want and you always have the freedom to increase, decrease, or pause your contributions.

As you save, our partner brands drop cash rewards into your account to help you pay for it faster. You can also invite friends and family to help contribute to your savings goals!

Look for discounts and promotional deals

Sites like Kayak, Agoda, Going (formerly Scott’s Cheap Flights), Expedia, and Hotels.com can help you find and compare discounts for flights, car rentals, museums, restaurants, and hotels.

Travel during off-season periods

Vacation destinations are also subject to basic supply and demand economics — the more visitors there are, the pricier everything (airfare, taxis, hotels, sights, and restaurants) is.

And the more cramped you’ll find your vacation experience, especially if you’re traveling to a fairly popular location. As much as possible, plan your trips for off-season periods when you can enjoy quality experiences without the crowd.

Use travel rewards and loyalty programs

Travel rewards and airline miles can help subsidize your trips and earn points. You can redeem points from credit cards like the Chase Sapphire Reserve and Capital One’s Venture X Rewards Credit Card at eligible hotels, short-term rentals, restaurants, and dozens of other vendors.

Maximize your vacation fund with Accrue Savings

A vacation can help you unwind, reconnect with family, and take a well-deserved break — and a vacation fund can help you do all that without jeopardizing your financial future or struggling with guilt after you dip into your savings.

And Accrue is the best aspirational savings platform to help you create a picture of the lifestyle you deserve — and start saving up for it with less stress. Accrue helps you shop smarter by saving up with your favorite brands, including Smile Direct Club and Casper.

Check out our brand partners that will help you build your vacation fund faster with cash rewards for meeting your savings targets.