You have dreams of traveling the world. Whether you hope to quit your job and become a digital nomad or plan a family vacation to Disney World (or Universal), at some point cost will cross your mind. If you’re wondering how to fund travel, you are not a lone. I’ve devoted this entire website, and my podcast, The Thought Card to answering this important question. Having the chance to visit 27 countries, like Iceland and Bermuda, I’ve mastered how to start a travel fund and budget for travel. I believe in not letting our financial responsibilities hold us back from pursuing our dreams.
While travel doesn’t have to be expensive, it does cost money. Although you no longer have to be wealthy to jet set across the globe, I can imagine it certainly helps. Nevertheless, it’s possible to travel even if you’re on a budget.
If you want to travel more, I recommend creating a travel savings account first and foremost. In this podcast episode I walk you through step-by-step how to start a travel fund and ways to save regularly.
After this post, grab a copy of my best-selling book, Affording Travel: Saving Strategies for Financially Savvy Travelers.
Listen to the episode here:
Danielle Desir Corbett: Welcome to The Thought Card, a podcast about traveling money where planning saving and creativity leads to affording travel building wealth and paying off debt. We are the financially savvy travelers. Hi everyone and welcome to episode two of the Thought Card podcast. Today, we're going to talk about the importance of having a travel fund and really how to get it started. So I'm going to take you back five years or so ago. It's been a little while, but after I graduated from grad school, I threw a nice shindig with my family to celebrate my victory. Right? And from that dinner I had, let's say about $700 in gifts. So for me at the time I hadn't traveled Because I didn't have any money, I didn't have a job really. So I put that $700 gift money into a separate account and I call that my travel fund and that's really where it all started for me and I can honestly credit my travel fund for allowing me to financially be able to travel because honestly having all my money in one-account doesn't work for me. I have a number of make accounts and we can talk about that in another episode. But really I found that a travel fund is a powerful tool that I used to help me save money for travel and honestly travel doesn't have to be expensive, but it does cost money no matter what anyone says. Travel cost money. I recently read an article from stuff dot com where a travel influencer had spent $170 on accommodation, travel The world in 12 months and that's amazing. She spent less than $200, but guess what she spent money. So regardless of what kind of travel style or what you do when you're traveling, you're going to spend some type of money. So I found that the easiest way for you to make travel financial priority in your life and the first thing I recommend to people is to start a travel fund. So what is a travel fund? A travel fund is simply a separate bank account dedicated to your travel savings and expenses. Okay, It can be a checking account, a savings account or a money market. The only caveat is if you put your travel fund money in a savings account in the United States, you are limited to six transactions per month before incurring a fee. So I recommend keeping your money into a checking account or a money market. That really makes things easier. You don't have to worry about fees, which is great. A travel fund is important because it helps you be intentional with your money by separating it out. Like I said, if you're someone like me who has really hard time with jumbling all their money together. Travel fund is great because it separates it out and when you're saving for travel, it's helping you be intentional, so when the time comes that you want to book those flights to hawaii for your honeymoon or go on a road trip with your girlfriends, you have a stash to pull from. You don't have to scratch your head like where is this money coming from? I really want to have this experience with my family and friends. You have a stash to pull from, no questions asked because hey, you've been doing the work you've been saving for it right. The point of having a travel fund is to have the money for travel available when you need it on demand. Right, Alright, Danielle. So I already have a checking account. I already got my numbers all set up. Why do I need to keep my travel fund separate? Well, it's really simple because the more you commingle your funds together, the less likely you're able to achieve your goals because in your mind, you're not distinguishing what money is what and you have to keep track of all of these numbers together and all the things that you want to do with these funds. So even with the best intentions, it's easy to spend money on other things if all of your funds are jumbled together. So that is my case for having a travel fund. A travel fund makes things so much easier because at the end of the day, you can take a look at your balance and know exactly how much you have available to spend on travel. Isn't that reassuring? So your travel fund will let you know if you can book right now or if you'll need a little bit more time to build your savings. Let's look at my travel fund right now. My travel fund actually has $245 in it right now. So I'm totally down with booking those flights in San Francisco in October because those flights are 220 and I got $24 left to spend. So that is the beauty of having a travel fund is that you can look at your bank account and know how much you have to spend. And with the travel fund you can be that exact, it helps you to avoid getting into debt paying high balances on credit cards and getting into a bunch of mess. I found that having a travel fund brings a lot of clarity into my finances and it also helps keep my wanderlust in check because it is so hard for me to resist a flight deal Guys, it is literally impossible. I love cheap flights. I love flight deals and having a travel fund really does keep me in check because if I don't have it, I don't got it. I'm not really going to book those flights. So if travel is important to you, consider consider having a travel fund and number two, consider treating it like a recurring bill. Okay, this can be groundbreaking because I treat travel like a recurring bill because it is so important to me and I set money aside for it every single month. Travel is right up there with my mortgage, my car insurance, my car note and my netflix subscription, All those things I need every day, all those things are things that help me stay alive and live my lifestyle and so does travel, travel is super important, so I treat it like everything else And this is great because it helps me create consistent saving habits and if you treat travel like a recurring bill, you'll save hundreds if not thousands of dollars by the end of the year if you don't touch it. So for example at $50 a month, that's a total of $600 in your travel savings a year and at $100 a month as a total of $1,200 in travel savings a year. So if you start small, you really can see the momentum pick up with your travel fund and your travel savings now that you have a travel fund. I suggest that you have your employer direct deposit money into your travel bank account, don't wait for the day after or even the week after to make this transaction, do not delay, do it the day you get paid and if you're a freelancer and you're getting money for a bunch of different clients, build that in to your transactions. If you have a business bank account, transfer some money into your travel fund when you're doing your drawdown every month again, this is back to the idea of consistency. Travel fund savings for me is a lot about consistency and saving in general is about consistency. Direct depositing really helps this because it really makes things easy because it's automated, You never have to remember to add money. Oh did my employer do this? Oh did I get oh I do, I know you don't have to worry about it because you said it, you forget it and you just watch it grow, which I love personally, I would say to start off with an insignificant amount that doesn't take too much sacrifice out of your budget and then build your savings rate from there. So if you want to start with $25 a month, 50 70 500 and then grow and grow and grow gradually. That really, really helps. Okay, so now if you want to schedule automatic transfers after you get paid to accelerate your goals, by all means guys go for it. So I say for travel every pay period, but recently I've decided to take things up a notch a little bit by adding an automatic transfer every Tuesday. So I'm adding a little bit of maybe $25 here, $25 there just to kind of boost things and make things accelerate so that I can travel too far and further places. So where do I suggest parking your travel fund? Like I talked about a little bit before the top of the show I recommend either a checking account or a money market that doesn't incur fee, don't put your money in big accounts where your bank is going to charge you fees for it because guess what? That's eating into your margin, that's going to affect your travel down the line. So I have my travel fund at Ally Bank. I've been their customer for many years. I think I was one of their first customers. They first came out and they're an online bank with relatively high interest rates and they're awesome because they're so easy to use setting up an account is like a piece of cake. And honestly I think I have like 10 big accounts with them right now. So I can't recommend Ally Bank enough. And I know a lot of my listeners also use ally bank. So let's recap if you want to afford travel and you want to make it truly a financial priority in your life, Start a travel fund which is simply a separate bank account devoted solely to your travel savings and your expenses. Next treat your travel like a recurring bill right up there with your mortgage, your rent, your gym membership, anything that is recurring every month, treat it like a recurring bill and lastly have your employer directly deposit money into your travel fund so that you can set it and forget it and watch it grow. Okay, automation is a powerful, powerful, powerful tool because we have so much going on that sometimes we can't even think about like you know, things that we really want in our life, we really can't think about it. So automation just makes things so much easier out of sight out of mind, which I love. I'm going to sign off by saying that the concept of saving is simple guys, it's so simple, but it is not easy and whoever said it is is lying, but some simple planning with some type of planning, you'll really get the results, you want to go on that cruise plan that bay weekend getaway and go on the excursion with your family which you deserve. Okay, I encourage you to invest in you invest in your future, invest in your future travel experiences and start saving money in your travel fund today. I want to know if you have a travel fund, why or why not? Or maybe you didn't have a travel fund before and you're reconsidering it and you are going to start one now, let me know, I would love to hear from you, I would love to hear about your transformation if you have one or if you're going to stick to your guns and like, nope, I don't need to travel fund, I'm going to still do my own thing and the best discussions happen over on the website podcast dot dot card dot com and I would love to hear from you, thank you so much for tuning in and I cannot wait to see you in the next episode. Bye.
Daphne: Yes, I do have a travel fund and the reason being is because a couple years ago I set a goal that I wanted to travel to one new country a year, which meant that I had to save up to travel to that new country every single year. Over time I decided to create a bigger budget just because that I realized I could actually do more than that and travel to more countries per year while saving money while I'm at home.
Kyle: Um no, mainly because I'd say how much I get paid doesn't really allow it right now because you know, I have savings and emergency that I can't really just spread my money over everything. I still need some money in the bank for, you know, gas or whatever.
What is a Travel Fund
A travel fund is a powerful tool you can use to help you save money for travel.
A “travel fund” or “vacation fund” is a dedicated bank account (checking, savings or money market) devoted to your travel savings and expenses. Intentionally save money for travel, so when it comes time to spend, you have a stash to pull from.
In this episode we cover:
- What is a travel fund?
- How to start a vacation fund
- How to save for travel by treating it like a recurring bill
- Best saving accounts for vacations
Watch this video for how to make travel a financial priority in your life.
Reasons To Start a Travel Fund
The more you commingle funds the less likely you are to achieve your goals. Even with the best intentions, it’s easy to spend money on other things if all of your funds are jumbled together.
Having a bank account for travel makes things so much easier because at a glance you can check your balance and know exactly how much you have available to spend.
Isn’t that reassuring?
Have money available for travel when you need it. In many ways it gives you permission to spend on what you want.
Here are (3) ways a travel fund can help you travel more.
1. Keeps funds separate
When you commingle funds you are less likely to achieve your goals.
This is why I have multiple bank accounts — a virtual envelope system where each account is set up for a specific purpose, a bill or goal.
A travel fund is important because it’s so much easier to save money for travel when it has its own dedicated savings account separate from everything else.
So, when you have to pay for a flight or want to go on a spontaneous weekend getaway, you can tap into the funds you set aside specifically for travel expenses, like flights, lodging, attractions, and more.
Helpful Tip: I recommend personalizing the name of this account by renaming it “Cruise to Mexico” or “Disney Family Vacation.” This makes your next adventure feel a little more real.
2. Avoids overspending
Travel savings can also help you avoid getting into debt and paying high credit card fees.
To avoid the temptation of using my travel savings on other expenses, I bank with Ally Bank, an online bank. While Ally is easy to use, it takes a few days to withdraw funds making it less convenient than an ATM withdrawal from my brick-and-mortar bank. This slight inconvenience, helps me avoid the temptation to dip into this account which strengths discipline.
3. Keeps you grounded
I’ve found that having a travel fund brings clarity to my finances. It helps keep my wanderlust in check (because it can be hard to resist flight deals).
For example, today I have $500 in my vacation fund. Let’s book those flights to San Francisco for $220. On the other hand, I’m not quite ready for that all-inclusive trip to Costa Rica for $2,000.
Overall, a vacay fund makes travel more financially feasible. Know with certainty what you can afford.
How To Build a Travel Fund
Instead of saving for a particular trip, get into the habit of saving for travel regularly.
- Determine how much you want to save towards travel every pay period (weekly, biweekly, or monthly).
- Set up direct deposit with your employer. This way money from your paycheck will get deposited into your travel bank account every time you get paid.
- Go about your life – set it, forget it and watch your travel savings grow!
Helpful Tip: Don’t wait for the day after or even the week after to move funds because you might forget. Automate your finances so when you get paid, a portion of your check is saved automatically for your next vacation.
Automation takes care of all the heavy lifting so you never have to worry about moving money into your travel fund. It’s done automatically for you. You’re essentially locking yourself in and sticking to your plans.
Ways To Boost Travel Savings
If you want to schedule additional automatic transfers after you get paid to accelerate reaching your travel savings goals, by all means, go for it.
These additional deposits can be as small as $5 or as large as you can possibly afford. The rationale here is that overtime these additional payments will boost your savings rate and help you reach your travel goals faster.
Savings challenges like the 52-Week Savings Challenge or $5 Bill Challenge can help you set aside extra cash.
A travel fund money box put in a visible place in your home or office may be another fun option to save your loose change.
Here are some of my favorites from Amazon:
Listen to the episode here:
How To Save Consistently
How important is travel to you?
If travel is important then add it to your budget or spending plan and make it a financial priority by treating it like a recurring monthly bill.
Put travel right up their with your car insurance, rent and gym membership.
Like a recurring bill, you’ll set money aside for it every single month which builds consistency.
On an average salary, I was able to make travel a financial priority by including it as a line item in my monthly budget.
If you treat travel like a recurring bill, you can potentially save hundreds or maybe thousands of dollars by the end of the year. It all depends on how aggressively you save.
For more helpful tips, here’s how to save money for travel.
Do you have a travel fund?
Danielle Desir Corbett paid off $63,000 of student loan debt in 4 years, bought a house at 27, and has traveled to 27 countries, including her favorites, Iceland, China, and Bermuda. Go here to learn Danielle’s incredible story, from struggling financially and in debt to finding creative ways to earn more and live on her terms. Listen to The Thought Card Podcast, where Danielle shares how you can creatively travel more and build wealth regardless of your current financial situation. Reach out to Danielle by contacting: thethoughtcard (at) gmail (dot) com.