Turning your dream European vacation into a reality is possible with some planning, savings and a couple of money hacks. Before you even start strategizing how to save for your Eurotrip, first estimate the cost of your travel expenses: meals, transportation, excursions, travel insurance, passport fees and more.
Once you've added up your estimates of each expense and have your budget amount in mind, focus on your savings strategies. Here are some tips to get your European vacation savings plan started.
Open a European Vacation Savings Account
First, separate your vacation money from your everyday spending and emergency fund. By creating a new savings account that's exclusively for your Eurotrip, you can easily make sure you're on track with your budget and savings. Plus, seeing your savings grow is a great way to stay motivated about your future travel plans.
Be sure to find a low-fee or free savings account with the highest interest rate possible. Ask your financial institution for help with choosing a savings account. Banks like GE Capital and Ally Bank offer accounts with no minimum opening deposit required and with relatively high interest rates.
Cut Back on Spending
Once you've set up a European trip savings account, start depositing money into it. The fastest way to save is to stop spending. Take time to look at your living expenses and identify some ways to cut back.
Whether you forgo your morning latte or cancel memberships you don't use or need, those little extras will add up. Consider the money you spend on subscription boxes or gym memberships, and take a break on those non-necessities to help you boost your savings.
On average, a gallon of lattes from a coffee shop is more than eight times the price of one gallon of gas. Over the course of a year, cutting back on these daily expenditures could amount to thousands of dollars in savings.
Earn More Money
If you're being aggressive about how much you save for your Europe trip, consider getting a side gig to boost your savings. If you get a second job, you can take that extra income and save it for your traveling expenses. You'll save more money without affecting your original income.
A good way to earn extra money without spending all your time away from home is to get a job that allows you to telecommute. Survey taking and website testing are examples of remote jobs that don't require a lot of time or any specific skill set. Check out employers like PaidViewpoint or UserTesting to learn more about these types of positions.
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Skip the Restaurants
Traveling to Europe is a good incentive to spend less money on eating out every day before your vacation. Buying costly meals daily can eat into your savings. By creating a budget-friendly meal plan each week, you can save some money — and still enjoy delicious food.
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On average, buying lunch can cost about $10 each time and making lunch at home can cost less than $3 per meal. By saving $7 per weekday, you'll have about $140 extra to deposit into your savings account every month. Over the course of six months, you're looking at $840 in savings, plus any interest you earn. That amount could cover your hotel cost and additional spending money.
Use Money Trackers
Changing your spending habits can be a challenge, especially if you don't know where your money is going. A good way to watch your expenditures is to use an app that tracks your spending and helps you save more money. Dozens of free apps are available to help you understand where your money is going.
Apps like Prosper Daily are free and will help you organize spending by types, amounts and even location. Fudget, another free app, is designed to help you stay on target with your financial goals — including upcoming travel to Europe.
As more stores, restaurants and service providers offer coupons online, saving money is easier than ever. Before you make any purchase, do a quick search to see if there's a coupon or discount code for that vendor.
Websites like RetailMeNot are reliable sources for coupon codes. They usually organize the discounts by date and even provide a rating system to show how likely that coupon will work.
Choose Credit Cards With Reward Programs
With a little bit of research, you'll find that there are credit cards with some rewarding programs. Using a rewards credit card is an excellent way to save money without doing much work: You can use a rewards credit card to pay for regular or recurring expenses — and get rewarded with points.
One example is the Citi AAdvantage card, which offers 30,000 American Airlines AAdvantage bonus miles after spending $1,000 in purchases within the first three months of opening the account.
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Set Up Automatic Transfer
You're less likely to spend money that you don't see. So if you allocate a portion of your paycheck to go straight into your travel savings account, then you're already ahead of the game.
Think of saving money like paying a bill. You can set up automatic transfers between accounts like your checking and savings to make saving seamless.
Sign Up for Deal Alerts
Your money-saving strategy should include getting the best deal on travel costs. With so many ways to save on hotels, airline tickets and excursions, there are probably few trip necessities for which you'll have to pay full price when you travel Europe.
You can use travel search sites like Kayak and Priceline to set up alerts for everything from hotels to plane tickets. To make sure you stay within your budget, set a dollar amount for the service you choose; if that service hits your selected amount, then the website notifies you. Deal alerts are especially helpful for airline tickets because airfare prices tend to fluctuate over time.
Pay in Installments
Another helpful way to get started on your Europe tour savings is to buy your tickets using an installment plan. Companies like Airfordable allow customers to lock in a price and pay one-third of the ticket up front and the rest in weekly or biweekly installments. Some travel agencies also offer installment plans on European tour packages and other itineraries.
An installment plan is an attractive way to pay as it makes travel more tangible. If you already have the tickets purchased, then maybe saving for the rest of the trip will come easier.