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

OkCupid admits to Facebook-style experimenting on customers

By Sarah McBrideSAN FRANCISCO (Reuters) - OkCupid, a top U.S. matchmaking website, intentionally mismatched users to test its technology, the IAC/InterActive Corp service said on…

Local

MTA fares still increasing 4 percent in newly…

The agency said the 4 percent increases, previously announced in December, will remain steady even as the MTA deals with increasing labor costs.

Local

De Blasio, Bratton defend city's efforts after Eric…

Mayor Bill de Blasio justified the city's response to the death of Eric Garner, a Staten Island man who died while in police custody earlier this month.

National

PHOTO: New Zealand Heral uses wrong image to…

The New Zealand Herald made a terrible mistake of using the wrong image to illustrate the tragic death of Staff Sergeant Guy Boyland – a New Zealand-born Israeli soldier who…

Movies

Interview: Brendan Gleeson on the way 'Calvary' depicts…

Brendan Gleeson talks about how his new film "Calvary" began over drinks and how his character here is the opposite of the lead in "The Guard."

Movies

'Get on Up' producer Mick Jagger on the…

Mick Jagger, a producer on the James Brown biopic "Get on Up," talks about the time had to tell the singer some bad news and his favorite JB record.

Television

'Glee' star Lea Michele to appear on 'Sons…

"Glee" star Lea Michele has been confirmed as a guest star in the final season of "Sons of Anarchy."

Television

TV watch list, Monday, July 28: 'The Bachelorette'…

See Andi Dorfman make her big choice on tonight's 'Bachelorette' finale.

NFL

Larry Donnell has inside track in Giants tight…

Little-known Larry Donnell of Grambling State currently has the inside track, as the second-year player has received the bulk of the first-team reps.

NFL

Computer to Jets: Start Michael Vick over Geno…

Jets general manager John Idzik says the choice of who starts between second-year quarterback Geno Smith and veteran Michael Vick will be a “Jets decision.”

MLB

Yankees looking to trade for Josh Willingham: Report

CBS Sports’ Jon Heyman reported Sunday the Yankees are interested in Twins outfielder Josh Willingham.

MLB

Joe Torre: I'm in Hall of Fame because…

Joe Torre spent 18 years putting together a near Hall of Fame career as a player. But it was the 12 years he spent as…

Travel

Glasgow: Hey, hey, the gangs aren't here

This European city has done a good job getting rid of its more violent residents and revitalizing with artists.

Education

Babson College tops list of best colleges for…

Money magazine has just released its inaugural list of "The Best Colleges for Your Money" -- and the answers have surprised many. Babson College, which…

Education

NYC teens learn how to develop apps during…

Through a program sponsored by CampInteractive, the high schoolers designed their own community-focused apps.

Tech

The Ministry of Silly Walks app is both…

Monty Python have dug into their back catalogue for cash-ins once more, but with the Ministry of Silly Walks app, they've made something that's fun too.