Go Fund You: The Right Way to Save for That Big Trip

If planning an epic vacation for next year tops your to-do list, creating a travel fund should be your first step. What is a travel fund? A travel (or vacation) fund is a specific account aimed at saving money for your next major trip. 

When you go on vacation without saving for it, you’re likely to keep a constant tally running in your head, so you don’t overspend, or worse, go into deep debt during the trip. Since travel is supposed to be relaxing and help us disconnect from stress, creating a travel fund can make your journey more enjoyable. 

Follow these simple steps to create a travel fund. 

Step 1: Pick a location.

First things first when creating a travel fund: Decide where you want to go. If you already know, this part will be quick for you. But if you’re not sure, there are a few ways to help you figure out your destination. 

If you’re struggling to pick a vacation spot, we suggest making a list of five that you want to visit. Once you have that list, write the type of vacation that would be best for each location. Common types of trips are family, solo, romance, friend getaway, relaxation and adventure. Once you’ve paired the locations with what type of trip they would be, you will most likely be drawn to a place based on what type of trip you want to go on. 

Still stuck? If you’re traveling with another person or a group, start a new tradition by having everyone write their desired destination on a piece of paper and put it in a bowl. Each year, a new person gets to pick from the bowl, and that will be the location of the group’s vacation. 

Once you choose your location, it’s time to map out how you can set a realistic travel fund goal. An important part of setting such a goal is choosing the dates of the trip. The cost of travel usually fluctuates depending on the time of year you visit, so thoroughly research flight, hotel and transportation costs before locking in your dates. Also, set a realistic timeline of how quickly you will be able to build your travel fund when picking the dates you’ll be away. 

Once you’ve figured out your travel dates, it’s time to talk money. A good way to figure out trip costs is to break them down into Tier 1 costs and Tier 2 costs. The total of Tier 1 is the minimum you’ll need to save for this trip. Tier 1 costs include things like airfare or gas, lodging, food and travel insurance. 

Once you know your Tier 1 costs, divide it by the number of months you have to save for your trip. This will give you the amount of money you’ll need to put in your travel fund each month. 

Other expenses to remember when you tally your Tier 1 costs are pet-sitting, transportation (airport parking, rental cars, ridesharing service) and travel gear (suitcases, specialty clothing and sun protection). 

If your Tier 1 costs are manageable, then it’s time to create a Tier 2 list. Tier 2 costs are all the optional expenses: things like excursions, souvenirs, spa treatments and fine dining would be included. Once you’ve added up the Tier 2 costs, add it to your Tier 1 costs and divide that total by the number of months until your trip. 

Now you have the exact amount you’ll need to save each month in your travel fund for your vacation. Planning out your trip costs and saving accordingly allows you to be fully present on your trip and truly relax. 

Step 3: Create a trip-specific account.

The third step in creating your travel fund may not seem essential, but it helps you be intentional with your saving and spending. Establishing a savings account exclusively for your much-anticipated getaway helps make it real and keeps you accountable for your plan. 

Be sure to name the account something meaningful. When you’re saving for your vacation, it’s much more rewarding to put money in an “African Safari Dream Trip” account than in one named 242673.

Step 4: Start saving for your adventure.

The last step in creating a travel fund is saving cash for your trip. Here are some great ways to help your travel fund grow without thinking about it all the time. 

• Paycheck deductions. A great way to save for your travel fund is to designate a percentage or a specific amount each pay period to be taken from your paycheck before it even hits your account. This way the saving is automatic, and it won’t be another thing you have to do each month. Chances are, you won’t even notice. 

• Make it a family affair. If you’re planning a family vacation, bring your family in to brainstorm ideas for building up your trip fund. Do they want the trip to include a cool jungle ropes course or white-water rafting experience? Give them a goal of raising a certain amount of money for those adventures, and tell them you’ll match it. Older kids can pick up extra chores around the house or sell things on digital marketplaces like Facebook or eBay (supervised by a parent, of course) to earn extra money to contribute. 

A good way to get younger kids involved is to plan a garage sale and ask them to pick 10 things to contribute. This helps build excitement about the trip and helps children learn the value of working for money.

• Automate savings. There are tons of apps that make saving money super easy. Many of these apps can round up purchases or save money automatically when accounts reach certain thresholds. Think of these automated savings apps as a digital change jar in your kitchen—every little bit helps. If you’re saving for a trip that’s a few years away, many of these apps offer annual interest rates between 2% and 4%. AAA also offers interest-earning CDs and high-yield savings accounts. 

• Let AAA Travel Agents assist. Travel Agents have the insight and experience to help you discover great itineraries based on your interests and budget. These professionals can help you uncover Member benefits and discounts, advise on where and when to travel and much more. 

While saving for a major vacation may seem like a daunting task, having a travel fund helps lower the stress. By following these four simple steps to create and grow a cash stash for that special trip, you’ll be well-prepared and well-funded to have the vacation of a lifetime.