How to Budget for Your Dream Vacation—Without the Stress
Picture this: You and your partner are waking up to the sound of waves, sipping coffee on your balcony overlooking the Mediterranean. A cruise through Europe’s stunning coastlines is the goal—now, let’s talk about how to budget for your dream vacation to make it happen.
Okay, maybe the idea of being stuck on a ship for several days sounds like your personal nightmare. Just stick with me—I’m using this Mediterranean cruise as an example for the sake of this article about saving for your dream vacation. Maybe you’d rather road-trip through America’s state parks in an RV. These tips still apply. Really—any dream vacation. Disneyland? A month off work to sit in your backyard and yell at the squirrels for destroying your tomato plants? Visiting your sister in New York? Whatever your vibe, this advice works. For the rest of the article, though, I’m sticking with the cruise.
Step 1: Set Your Goal
You and your partner have a big anniversary coming up in a year, therefore you’ve got your eye on a Mediterranean cruise a year from now. The perfect celebration! You want a stateroom with a balcony, and plan to enjoy local excursions to explore the cities and their history. You want to taste the great food these countries have to offer, and you want to stroll down the markets to score some quality souvenirs. The cruise itself, with all the extras, might run about $4,000.
Now let’s look at the logistics: If you’re based in Minnesota and your cruise starts in Spain and ends in Italy, you’ll need international flights. To avoid missing your boat in case of delayed flight, you might want to book a hotel near the port and arrive a day before the cruise sets sail. That adds about $2,500, bringing the total trip cost to $6,500. Draining your savings account is not the best option but you can budget for your dream vacation!
Step 2: Build a Realistic Budget
With 12 months to save, you’ll need to put away roughly $542 per month. That’s a solid starting point, but depending on deposit deadlines or early booking deals, you may want to save a little more or adjust your timeline.
Sit down with your partner and decide on a plan. Will you both contribute equally? Does one of you have more room in your monthly budget? Or do you have a shared account where savings can come out automatically?
This is a great opportunity to take a close look at your overall spending. Consider:
- Canceling unused subscriptions: Are you paying for streaming services, subscription boxes, or apps you rarely use?
- Dining Out: Can you reduce how often you dine out and reallocate those dollars to your vacation fund?|
- Utilities and Services: Have you recently reviewed your phone, cable, or internet plans? Sometimes a quick call can result in a lower rate.
Even small changes can add up quickly.
A modest adjustment can help you hit your goal without feeling deprived. For example, canceling an unnecessary monthly subscription and cooking at home instead of eating out once a week could easily free up $150+ per month.
If trimming expenses isn’t quite enough, think creatively—selling unused items or starting a short-term side hustle can bridge the gap without long-term financial strain.
Step 3: Decide How You’ll Save
This is a crucial step: where and how will you save your vacation funds?
Option 1: Dedicated Savings Account
Opening a separate account for your vacation fund helps you avoid the temptation to dip into the money prematurely. Look for high-yield savings accounts with no monthly fees.
Option 2: Use a “Savings Bucket” Feature
Some banks offer the ability to create sub-accounts or “buckets” within a single savings account. You can label one “Vacation Fund” and track your progress more easily.
Hot tip: Automate Your Savings
Make it easy on yourself and set up an automatic transfer right after payday. Automating your savings reduces the temptation to spend and helps you build momentum without thinking about it.
In Conclusion
Whether your dream is a Mediterranean cruise or exploring America’s national parks, the path to budget for your dream vacation is the same: Set a clear goal, make a realistic plan, and stick to it.
And remember, your financial advisor is here to help you turn big dreams into smart, achievable goals—without sacrificing your long-term financial health.