How to start saving for next year’s vacation

web-beach-TRV_barbados_beach
Credit: Getty Images

This is a great time to start planning ahead for what you want to do in 2014, especially if you anticipate a year-end bonus or holiday money to tuck away into a savings account. The key to success is that it’s not just what you save but how you save. Here are five ways to optimize your saving habits and make that dream vacation a reality.

1. Strategize: Think ahead to when you will get the most out of a big trip — over the holidays or during summer vacation — and when you are most likely to start saving toward that goal. It may be after receiving a bonus, holiday cash or during tax-refund season. Plan your timeline accordingly.

2. Embrace Risk: There’s such a thing as considered risk. If your travel date is a couple of years away, consider depositing your funds into an investment account rather than a savings account. It’s possible to grow your money while taking an acceptable amount of risk.

3. Be Specific: Traditional budgets don’t work because they focus on self-denial. Rather than setting restrictive limits on yourself like “spend less on restaurants,” try to visualize yourself on the beach or in the mountains on vacation. Research shows the more you see yourself achieving the goal, the more likely you are to get there.

4. Make Saving Automatic: Automating deposits into your savings or investment fund keeps you on track. It’s easy to make good decisions, like vowing to save up for family time in Paris, when you’re rational. It’s harder to achieve these things when it comes to resisting short-term temptations or juggling expenses. Automating your deposits helps you stick to the plan no matter what happens.

5. Think Buckets: It’s a good idea to keep your vacation account separate from other savings or investments. By creating a “vacation bucket” you can help avoid poor mental accounting. Separating your vacation “bucket” enumerates what you’re working toward, instead of having a slush fund that may be raided for other expenses that come up along the way.

Don’t waste your time trying to will yourself into good savings habits. Try these steps instead.  You’ve got a vacation to plan!

Jon Stein is the founder and CEO of Betterment, a leading online investing company that delivers smart, personalized financial advice paired with low fees and a superb customer experience. As a special offer, Metro readers can start a Betterment with the first 90 days free. Got money questions? Hit us up at metro@betterment.com.


News
Entertainment
Sports
Lifestyle
National

Miley Cyrus hospitalized, cancels Kansas concert, condition unknown,…

Singer Miley Cyrus was hospitalized on Tuesday night after suffering what is believed to be 'a severe allergic reaction' to antibiotics medication. The 21-year-old Bangerz…

News

Explosions in new Boston Marathon bomb panic, 'twisted'…

A fresh Boston Marathon terror alert, which caused Bomb Squad officers to order an evacuation while two controlled explosions were carried out, was today being…

National

Reddit boosts news capabilities in social media turf…

By Jennifer SabaNEW YORK (Reuters) - Reddit, a website with a retro-'90s look and space-alien mascot that tracks everything from online news to celebrity Q&As,…

Local

New York joins accord to strengthen popular vote…

New York State joined a nationwide effort that would gives the state's 29 electoral votes for president to the candidate who wins the national popular vote.

Entertainment

Miley Cyrus hospitalized, cancels Kansas concert, condition unknown,…

Singer Miley Cyrus was hospitalized on Tuesday night after suffering what is believed to be 'a severe allergic reaction' to antibiotics medication. The 21-year-old Bangerz…

Television

'Orphan Black's' Jordan Gavaris talks Felix's Season 2…

Jordan Gavaris plays heroically helpful foster sibling Felix to main clone Sarah on "Orphan Black." We talked to him about what’s ahead for him in…

Going Out

Accomplice Tour: New York (Spoiler Alert)

When I signed up for the Accomplice show tour, I had no idea what I was in for. But every grimy job comes with a great reward.

Television

TV watch list, Tuesday, April 15: 'New Girl,'…

'New Girl' Nick and Jess are hiding their breakup from the other loft residents. And Winston passes the police academy exam! That guy needed some…

NBA

Nets miss chance to clinch No. 5 seed…

Nets head coach Jason Kidd expressed little concern after a 109-98 loss to the Knicks, but others seemed to disagree.

NFL

Jets confident despite Chris Johnson leaving with no…

Jets fans clamored for a playmaker on offense all offseason. It looked like they were going to land that player on Tuesday when Chris Johnson…

NBA

Knicks, Nets rivalry never materialized despite national attention

When the NBA schedule was released, the league anticipated an intense rivalry between the Nets and Knicks with all four games slated for national TV.

NBA

NBA Power Rankings: Are the Spurs frauds? Could…

NBA Power Rankings: Are the Spurs frauds? Could the Mavericks surprise?

Home

Steal home decorating tips from Nattystyle blogger Natalie…

Despite the towering ceilings and enviable exposed brick, it’s easy to see how Natalie Decleve’s apartment could be considered a challenge. Perched above the streets…

Home

How to plant a garden in the city

Small on space but big on gardening? You can still have that welcoming oasis of fresh air with an urban garden. Peter Smith, owner of…

Style

Personalize your massage at a private practice

CityTouch customizes spa treatments to meet client's needs.

Style

Victoria's Secret Fashion Show moving to England

It will still broadcast on CBS this fall.