Making memories while on vacation or during the holidays shouldn’t include the stress of paying for everything. If you’ve experienced the dread after holidays of going over your budget, dipping into your emergency fund last minute for a vacation or having to get a high-rate loan to cover travel – you’re not alone. We’re here to help you learn how to save for vacation.
Did you know that summer is the best time to start thinking about winter holidays? Or that the easiest way to pay for your family’s summer vacation is to save before you even plan it? Saving ahead of time is the key to stress-free travel.
It’s common for these expenses to sneak up on you, and then you realize you don’t have the vacation funds to cover fun memories. However, you can skip vacation payment plans and choose the best savings account for special times instead.
A dedicated Vacation or Christmas Club Account can simplify creating your budget for places to travel to. You’ll get an automatic payout to your online savings account right on time for your vacation or the holidays.
What do both accounts offer? At Del-One Federal Credit Union, both accounts function similarly to any other savings account you might have. Here are the Christmas and Vacation Club Savings Account perks:
- No minimum deposit to open
- Competitive dividends; view rates here
- No monthly service fee
- No minimum balance required
- Deposit any amount at any time
- Online banking and eStatements available
What is the difference between a Christmas and Vacation Club Account? The main difference between a Christmas Club and Vacation Club Account is when the funds automatically transfer to your primary share account (also known as your savings account). For a Vacation Club Account, the transfer happens on June 1, while for a Christmas Club Account, it’s on October 1.
What if you need the funds early? You get two free withdrawals any time before the transfer date. You could use this option if you end up changing your vacation plans to start before June 1 or if you end up needing the money for an emergency. If you need to withdraw more often, there is a small $5.00 fee for each withdrawal after that.
Do you have to use a Christmas Club account for a Christmas celebration? While the name has Christmas in it, you don’t need to spend your funds for that holiday. Since the money is transferred on October 1, you could use it for Thanksgiving travel, Hanukkah celebrations, a winter ski vacation and more. The name is just an easy way to keep track of when your funds will be available.
Use these accounts to build long-term saving habits: Building a habit to save long term is one of the best reasons for opening a Vacation or Christmas Club Account. Saving can be tough, but you can think about it just like building any other habit – like exercising. While it may sting at first to cut back on short-term wants, you’ll build the muscle needed to make it easy to save for more expensive things.
Instead of putting all your savings in a traditional savings account, you can intentionally set aside funds for your goals. Not only will you be motivated to save by seeing the progress you make, but you’ll have a clear goal to celebrate in the end with a fun vacation or extra holiday memories.
How to get started saving for winter holidays: The best way to get started is to go back and see the total you spent last year during the holidays. Then you can use that amount as your savings goal. Since the automatic transfer for a Christmas Club Account is on October 1, count the months between now and then. Then you can divide your total goal amount by the number of months to set yourself a monthly savings goal.
Here’s an example:
- Last year’s holiday expenses were $1,000.
- If you start saving in June, you have four months to save (June, July, August and September).
- Save $250 per month to have $1,000 to spend on holiday expenses.
Bonus tip: Make sure you’re accounting for any holiday travel as well. If you missed out on some festivities last year or are traveling farther this year, you may have to add extra to your savings goal.
How to get started saving for your next summer vacation: This one may require some more research than holiday expenses. If you generally go to the same place for vacation, you can use last year as a model. If you like to plan vacations months in advance, set up your budget in the new year. Work your savings into your monthly budget, and then you’ll be stress-free when summer starts.
Here’s an example:
- Your family vacation will cost $5,000.
- If you start saving in January, you have five months to save (January, February, March, April and May.)
- Save $1,000 per month to have $5,000 to cover the cost of your vacation.
Remember, funds automatically transfer June 1, so make sure to plan your summer vacation after that date.
Bonus tip: If you’re not sure how much to save for a vacation, be on the safe side and save more than you’d guess. If you have extra money, you can either add something new to your vacation plans or add the extra to your Christmas Club Account.
Want to learn more about budgeting? All Del-One FCU members have access to financial education resources so you can budget confidently for your travel and beyond.
Is it worth it? While it may take some extra work to plan ahead for the cost of your holidays or vacation, it’s the easiest way to make sure your time is stress-free. Not only will you rest easy knowing you have the funds to cover the special memories you’re making, but you’ll also save extra money in the end. Between earning dividends and avoiding interest from credit cards or a high-rate personal loan, you’ll have more money in your pocket at the end of the special event.
Wondering how to open a savings account to fund your travel for vacation or the holidays? You can start saving for your next trip today at Del-One! Stop by a branch or open an account online here.
