If you like to travel, then you know that you need money to do so.
If you want to be able to explore the world and enjoy it, then the last thing you want to think about is money. On top of that, saving enough money to get there is tough, and it may always seem like a hassle in your day-to-day life.
Luckily, you can rely on technology to do all the thinking for you.
You can automate saving money allowing your travel fund to grow steadily.
If you’re lucky enough to get paid time off while traveling, then you can even supplement your travel fund while you’re abroad. Below, I will talk about some of the ways to automate your savings.
How to Automate Saving for TravelLearn how to automate saving for your #travel fund with these useful tips! Click To Tweet
Tip #1: Set Up a Separate Account
One of the first things you need to do is create a separate travel fund account. This account should be used ONLY to save before you go traveling. When you’re out and about, you can start spending out of this travel fund.
This account needs to be separate from your go-to bank account. If it isn’t, you may find it much harder to reach your savings goal.
Once you have this separate account in place, you might benefit from making it inconvenient to access while trying to save up money.
Try not to attach a debit card to the account until you go on the trip–if you have an easy way to access your money, then you may end up finding it much harder to save.
Tip #2: Deposit Money Automatically
One of the nice things about having a separate bank account is that you can set up direct deposit, or automatic paycheck deposit.
Every payday, you can split your paycheck across multiple accounts, and the money gets deposited directly. This will help you save money quickly. If you set aside a consistent percentage of your paycheck, then you’ll make good progress towards your travel fund.
Additionally, it is suggested that you have a weekly or bi-weekly automatic transfer from your checking account to your travel fund account.
This tip is more for the frugal spender–if you have money left over from your budget, then you can have it transferred over which would help you reach your goal sooner.
Tip #3: Choose an Interest-Bearing Account
One way to expedite your savings would be to choose an account that earns interest. There are both checking and savings accounts that will accrue interest each year; they present great opportunities to make your money work for you.
If you keep your travel fund in one of these accounts, you will earn additional money just for doing so. Keep in mind that these options might not be helpful in the short term.
As an alternative, you could also consider opening up a certificate of deposit, money market account, or a short-term fixed income account.
But don’t get your hopes up. You will only see significant gains if the money can sit for a longer period of time. If it’s too short, then you likely won’t have enough money in the account to earn much interest, or you could pull all the money out before you see any yield.
Tip #4: End the Late Fee Cycle
This may catch you by surprise. Instead of automating your savings, automate your bills. Automating your bills can actually save you time, energy, and money in the long run, which will allow you to devote more cash to your travel fund account.
Many banks will allow you to automate your bills through a service call bill pay or something similar. Through this option, you can pay your monthly bills automatically, and the money is withdrawn from your account on the day the bill is due or a couple of days before.
With a strategy such as bill pay in effect, you will not have to worry about remembering to make payments, and you will also avoid late fees.
Most of the time, the bill pay service is free through the bank, so make sure to check with your financial institution to find out if they offer this service.
If you want to travel the world, you need money to do so. Start saving now, and you will have a nice travel fund in no time! You can also apply these same strategies to start saving for a location independent lifestyle.
Remember that a separate account can help you save more, and think about the tips above when saving money.
Try to incorporate them into your routine now to help you save as much money as possible.
This was a guest post written by Patty Moore. Check out her blog, Working Mother Life, for some candid personal finance insights from a single mom.