Summer is here, and it’s the most popular time for people to travel.
Whether you dream of exploring exotic destinations, relaxing on a sandy beach, or embarking on an adventurous journey, one thing that can keep you from making those dreams come true is finances.
However, fear not, I’ve got some good news!
With the power of proper financial planning and education, you can build a travel fund that allows you start on the path to vacation freedom.
You can plan your dream getaway without too much sacrifice or hassle.
What is a travel fund?
A travel fund is a dedicated savings/investment account specifically set up to accumulate funds for your future vacations.
It serves as a financial safety net, ensuring that you have the means to cover your travel expenses without resorting to credit cards or dipping into your regular savings.
By regularly contributing to your travel fund, you can turn your travel dreams into tangible and achievable goals.
Accounts You Can Use To Save Your Travel Fund
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High Interest Savings Account:
Opt for a high interest savings account to make sure your money grows over time. These accounts often offer better interest rates than regular savings accounts, allowing your travel fund to accumulate more earnings.
Here are a few top savings accounts you can compare and choose from available in the UK.
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Assets That Do Well Regardless of the Economy:
For those with a higher risk appetite and a longer time horizon, investing in assets that do well against inflation can super charge your travel fund.
However, it is essential to educate yourself about investing and choose assets that have historically performed well, even during extreme economic downturns.
Important Things to Consider When Creating a Travel Fund
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Define Your Goal:
In this instance, your goal is to build a travel fund which you can withdraw from every year. I would recommend giving this at least a 2 year head start to make your money work for you.
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Be Mindful of The Fees:
When selecting a savings account for your travel fund, opt for one with no fees. Look for accounts that don’t charge monthly maintenance fees or transaction fees, as these can eat into your savings over time.
If you choose to invest your travel fund, make sure to choose assets with fees below 0.07%.
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Automate Your Savings to the Account:
Set up automatic transfers from your main bank account to your travel fund. Automating your savings ensures consistency and discipline, making it easy to constantly build your fund.
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Take Advantage of Credit Card Rewards:
Use credit cards that offer travel rewards, such as airline miles or hotel points. By using these cards responsibly for your everyday expenses, you can accumulate points that will help offset some of your travel costs.
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Put Away Extra Cash:
Windfall wins like tax refunds, bonuses, or unexpected cash gifts can add significantly to your travel fund. Instead of splurging on unnecessary items, funnel these extra funds directly into your travel savings.
Conclusion
Building a travel fund is an essential step in making your travel dreams come true.
By setting your travel goals, automating your savings, and taking advantage of credit card rewards, you can steadily grow your fund without feeling the pressure.
If you have a higher tolerance for risk and want to explore more substantial returns, consider investing in stocks or funds that have a proven track record of beating inflation.
Remember, the key to a successful travel fund is consistency and discipline.
Start saving now, and before you know it, you’ll have accumulated a substantial amount to finance your dream vacation.
Happy travels!
Learn more about money management and investing with My Workshops
If you want to learn more financial strategies that can make your money work for you, I invite you to register for my investment workshop.
In this workshop, I will work with you to identify your investment goals, risk profile and assets you can invest in. I will help you develop an investment plan that is guaranteed to set you on the path to financial freedom.
Register here!
