When you consider the costs of flights, hotels, rental cars, and meals, it’s easy to see why 75% of Americans rack up credit card debt to pay for vacations. In fact, a recent study revealed that the average American spends 10% of their annual income on vacation-related expenses. At the same time, many people spend upwards of 15% or even more.
When you stop to think about it, spending so much of your hard-earned money on a trip may not be the best use of your funds. When you get back from your vacation, you’ll wind up having to work twice as hard to pay for the debt you’ve racked up to enjoy your time out of the office. And if you don’t pay off your debt right away, you’ll wind up incurring hefty interest fees.
If you’re like most people, you probably don’t want to sacrifice going on an incredible vacation just to save money. Instead, you’re probably interested in learning some ways to better manage your money to offset the costs of your upcoming trips.
With that in mind, let’s take a look at three money-saving tips you can use to stockpile cash for a rainy day—and then use those funds to pay for your next vacation.
1. Open a High-Yield Savings Account (HYSA)
In recent years, HYSAs have become increasingly popular because they offer high-interest rates, which typically hover between 1% and 2% APY. These rates might not sound enormous. But when you consider the fact that the average savings account offers 0.09%, your interest quickly adds up.
For example, if you have $5,000 saved up for your emergency fund and you keep that cash in an HYSA that pays 1.5% APY, you’ll earn $75 annually. If your HYSA offers 2% APY, you’d earn $100 annually—without having to lift a finger.
The more money you stockpile in your HYSA, the more interest revenue you’ll earn. Who knows? One day you might be able to pay for your entire vacation with interest alone.
2. Make Easy Lifestyle Changes
It might be convenient to take an Uber home after work. But those costs can quickly add up.
Good news: You can save a bunch of cash by changing your habits and taking public transportation or walking to your destination instead.
For example, if you live in New York City, the minimum base fare for an UberX is $7, while the price of a single-ride subway ticket is $3. By walking or taking public transportation a few times a week instead of ordering a car, you can save at least $50 each month (or $600 annually).
Add it all up, and that’s enough to pay for a round-trip flight from the U.S. to Europe.
Similarly, many people also pay for gym memberships that they don’t use—or at least don’t use enough. Believe it or not, one study found that Americans spend $1.8 billion each year on unused gym memberships.
Instead of paying $50 or more each month to go to the gym, look into ways to exercise for free—like going on long walks, doing push-ups, running, or playing pick-up soccer, basketball, or volleyball at your local park. Thanks to YouTube, there’s also an endless amount of instructional fitness videos you can access for free—right from home.
In the U.S., the average cost of a gym membership is $58 each month. By ditching the gym and finding free ways to exercise, you can save at least $696. That might be enough to cover a good chunk of your next vacation.
3. Invest with Stash
As we begin the new year, it’s more important than ever to get your finances in order—especially if you plan on taking a vacation in 2020.
Our partner, Stash, can help you save and invest your money right from an easy-to-use mobile app. To date, Stash has helped over 4 million people set aside $1.8 billion.(*1)
Stash is a personal finance and investing app. As a Stash account holder, you can start investing in over 288 single stocks and ETFs with as little as $5. When you spend money each day using your Stash debit card, you can also earn Stock-Back® Rewards on everyday purchases.2
Stash has three plans, which are as follows:
This is an entry-level plan that offers access to a personal investment account and a debit account that earns Stock-Back® Rewards on everyday purchases.2,5 This account costs just $1/month.3
With a Growth account, you’ll enjoy the same benefits as the Beginner account. In addition, you have the option to also open and invest in either a traditional or Roth IRA. This account costs $3/month.3
The company’s premium membership option is called Stash+. This account includes the same benefits of the Beginner and Growth accounts. But you can also earn 2x Stock-Back® Rewards on everyday purchases made with your Stash debit card.2 Stash+ accounts cost $9/month.3
Get $20.20 Just for Signing Up
If Stash sounds like something that can help you save for your next vacation, you may want to open an account right away. The company is offering a $20.20 cash bonus for new Stash Invest account holders that sign up here through January 31, 2020.4 All it takes is $5 to get started.
By making some easy lifestyle changes, saving your money in the right places, and investing with Stash, you might be surprised at how quickly you could be able to pay for that next life-changing vacation.
Here’s to making smart financial decisions and to reaching your dream destination sooner than later!
1“Set Aside” is defined as complete incoming transfers from external funding sources to Stash Invest across all account types including the debit account since 9/11/2015. This value does not factor in withdrawals.
2Stash Stock-BackⓇ is not sponsored or endorsed by Green Dot Bank, Green Dot Corporation, Visa U.S.A., or any of their respective affiliates, and none of the foregoing has any responsibility to fulfill any stock rewards earned through this program.
3You’ll also bear the standard fees and expenses reflected in the pricing of ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.
4 Promotion is subject to Terms and Conditions. During the Promotion period you must (1) have an individual brokerage account in good standing (2) link a funding account (e.g a bank account) to your Stash Invest Account, AND (3) initiate a minimum deposit of 5.00 into your Invest account.
5 Account opening of the debit account is subject to Green Dot Bank approval. Debit Account Services provided by and Stash Visa Debit Card issued by Green Dot Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.Investment products and services provided by Stash Investments LLC, not Green Dot Bank, and are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value.
Dollar Flight Club is a paid partner of Stash.
Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.