Saving for Vacation: Financial Tips for International Travel

When you think of a dream travel destination, what comes to mind? Maybe you’ve always wanted to see the white and blue coastline of Mykonos, Greece, or the historic temples of Tokyo. Regardless of where you want to go, you’ll need to save money to actually get there. And it might be difficult to know where to start.

Julie Beckham, Rockland Trust’s AVP/Financial Education & Development, recently traveled to Sicily in what she calls “the family trip of a lifetime.” Whether you’re planning a trip abroad, or even just thinking about it, here are her best practices for saving and spending.

 

Saving for an experience versus an item

It can be tempting to go rogue and put a vacation on your credit card and worry about the total cost later. But before you make that jump, there are differences to consider when using a credit card on an expensive physical item versus a vacation.

“With purchasing a physical item, say a mattress, with a credit card, you pay for it for the next two years,” Beckham explains, “but you're sleeping on it every night, and probably will continue to do so years after the debt is paid. For those two years, you're not resentful about paying for the mattress because you're using it.”

Paying off a vacation is a different story.

“When you put a vacation on a credit card, once you're back home, it’s done,” Beckham says. “It doesn't feel as good to be paying for something that's gone as opposed to paying for something that's part of your everyday life.”

Putting money aside incrementally will help you avoid overspending on your credit card, while still experiencing the vacation of your dreams.

 

Financial Goal Setting: Where to Start

 

Make saving fun

We get it; saving can be a drag. That’s why it’s important to get excited when putting aside money for your vacation. Julie is well-versed in making saving fun! After all, she sings about saving, sharing, and spending money in Ms. Money’s Classroom, but adults can have fun when saving, as well.

“You can change the names of your bank account,” she says. “It's harder to take money out of an account when you're saving for something that has a name. Plus, it’s fun to log into an account that says ‘Destination Sicily’ or ‘Cape Escape.’”

Julie also recommends the “set it and forget it” strategy. For each paycheck you receive, allocate an amount to be automatically deposited into your intentionally named travel savings account. Whether it’s $10 or $100, you'll be surprised how quickly it grows.

And the allocated amount from your paycheck doesn’t need to be the only way you contribute to this savings account. Take funds that would otherwise be used on leisure or last-minute temptations, and put them aside for your vacation instead.

“If you’re tempted to go out to eat or make an impulse purchase months before your vacation, take a breath, think twice about it, and consider taking the money you were just about to spend mindlessly and transfer it into your travel savings account instead,” Beckham recommends.

Isn’t it more fun to go out to eat or shop abroad, anyway?

 

Finding the Right Type of Savings Account

 

The touchless tap trap

If you’ve made it to this stage, congratulations! Your trip is around the corner, but there are still a few things to remember.

In the United States, tapping cards at checkout seems ubiquitous, yet access to touchless transactions isn’t necessarily as common abroad (depending on your destination). And ATMs might be harder to find in other countries.

“Not everyone takes credit,” Beckham explains. “Even in the U.S., you'll go to some cash-only restaurant and will need to take out money at the on-site ATM. But when you have to pay cash in a foreign country and you don't have it, it's a different situation.”

Before you take off, give your banker a call two weeks in advance and let them know that you need to convert some cash into a different currency. It’s unlikely your bank carries a large amount of foreign currency on site, so they’ll need to place an order.

A bonus of using your local bank before you leave for your trip: you actually save money by avoiding transaction and currency conversion fees.

While you’re at it, give your bank a call a week before to set a travel alert, or request the alert through your online banking portal! Without one, your bank might flag transactions as fraud and put a hold on your account. The last thing you want to do on your vacation is chase down a teller across the world to lift your hold.

 

Check out Rockland Trust’s Learning Center

Even if you’re not necessarily planning for international travel, Rockland Trust’s Learning Center can provide you with resources to help you save. And with Ms. Money’s Classroom, you can get your families to join in the fun and get excited about saving as well. From podcast episodes to lesson plans for children, you’re guaranteed to find something that can help you reach your financial goals, build a healthy relationship with money and maybe even start funding that vacation you’ve been dreaming of.