How to save money for the holidays or a vacation without debt

When planning how to save money for the holidays or a vacation, it is important to set a sensible budget in good time, work out how much to set aside each month and choose a suitable place for the savings. If the money will be needed on a specific date, its availability and safety matter more than the chance to earn an extra return. So when thinking about where to keep savings meant for a goal, take into account both the timeframe and your willingness to take on investment risk.

In short

• Set your holiday or travel budget so that it does not cause financial strain after the event.

• To plan your savings, use a simple formula: the target amount divided by the number of months until the date.

• Keep your goal savings separate from your everyday money and your safety cushion.

• If the event is several months away, you can also consider short term investment options.

• The less time remains, the more important access to the money and lower risk become, rather than the chance to earn an extra return.

How to set the right budget for the holidays or a vacation?

A sensible holiday or vacation budget is one you can save up for in good time, without giving up important everyday expenses and without taking on new debt. Holiday traditions and the money spent on them differ from family to family, but a practical guideline for the total holiday budget could be around 5 to 10% of monthly income, provided this amount does not put excessive strain on the budget.

The dates of the major holidays are usually known well in advance, so planning ahead will help you celebrate thoughtfully and without unnecessary stress. The longer the timeframe, the more time you have both to save and, if needed, to change your plans.

Before you give in to the holiday shopping frenzy, remember that the holidays should bring joy, not difficulty paying the next bills.

How to calculate how much money to set aside each month?

To work out how much to set aside for a specific goal, a simple calculation is enough: the target amount divided by the number of months remaining. If you first need to figure out where to find this amount, the article on how to split your salary so there is money left for savings will help.

For example, if the event requires 1,500 euros and there are 10 months left, you need to set aside 150 euros a month. If you can only set aside 100 euros, there are two solutions: extend the saving period or reduce the budget.

Just as when saving for other goals, the key to success with holidays is consistency and regularity. It is better to set aside an amount each month that matches your real means than to set an overly ambitious goal and give up on it after a couple of months.

A clear goal and deadline will help you stay disciplined. After receiving your salary, automatically transfer a set amount to a separate account or another savings solution of your choice.

Where to keep money meant for a specific goal?

A regular bank account is convenient for everyday spending, but for goal savings it is better to use a separate savings account or another clearly separated solution. If 500 euros sit in the same account you use every day to pay for food, transport and entertainment, it is much easier to spend that amount by accident.

A safety cushion, on the other hand, is meant for unplanned situations, such as sudden larger expenses or a drop in income. That is why it should not be used for Christmas presents or a trip to warmer countries.

When thinking about where to keep money meant for a specific goal, one principle applies: the less time remains until the money is needed, the more important it becomes to preserve it and keep it accessible, rather than looking for an extra return.

If the goal is several months away and you are prepared to take on investment risk, you can consider investing part of your savings in the flexible investment solution TWINO FLEXI.

Fixed 6% annual return, but this result is not guaranteed.

The minimum investment amount is 10 euros.

You can request a withdrawal at any time, but it depends on the product's liquidity, and in periods of high demand it may take longer.

FLEXI is not a bank deposit and is not covered by the state deposit guarantee.

Investing involves risks, including the possibility of losing part or all of the amount invested.

Before investing, read the prospectus and product terms.

For other options on where to keep savings, read the article on where to park money in Europe.

How to save money for a trip if you do not know the exact cost?

Saving for a trip works on a similar principle as saving for the holidays, but it has its own nuances. You need to keep saving consistently, but your spending needs more flexibility.

First, unless the trip is a weekend in a neighbouring country, you usually need more money, so starting to save early is especially important here. Start saving even if you only have an idea for a trip and the destination is not yet known.

Second, the total cost of a trip cannot always be predicted precisely. Usually, by balancing wishes with means, you draw up a rough budget that includes not only flights and a hotel but also food, transport, activities and a small buffer. Divide this amount by the months left until the trip, just as with the holidays.

Third, trip planning is complicated by the fact that payment dates can also be unpredictable. Hotel deals, cheap flights and other good offers can significantly reduce costs, but such offers often appear unexpectedly and are available for a limited time.

That is exactly why a separate account with money already saved, quickly accessible and used only for trip related payments, will come in handy here.

How to save money day to day to reach your goal faster?

Knowing how to save is only half of the success. The other half is carrying out the plan, and that takes some effort, because there is no shortage of temptations.

To reach your goal, a short analysis of household expenses can help. Split your everyday spending into several groups and adapt your action plan for each.

Essential expenses that cannot be reduced without significant negative consequences: rent or mortgage, utility bills, food and household expenses, loans and leases, health, children's extracurricular activities and so on.

Expenses that can be temporarily reduced or replaced with cheaper alternatives: theatre and concert tickets, weekend trips, eating out, physical activities (free options instead of a gym), cheaper transport and the like.

Expenses you can give up completely for a few months: expensive entertainment, subscriptions you rarely use, buying the latest smart device model, unnecessary clothing and home goods purchases and other non urgent larger spending.

How to save money: a practical tip

This simple scheme will help you stick to the plan day to day.

After receiving your salary, transfer the amount meant for savings to a separate account.

Pay your monthly essential bills.

Split the remaining amount across the weeks of the month and adjust your everyday spending accordingly. This usually makes spending easier to control than tracking the whole monthly amount at once.

Frequently asked questions

Is it better to save every month or set aside a large amount at once?

If possible, it is better to save every month. A regular, small amount puts less pressure on your monthly budget, and an automatic transfer after payday helps make saving a habit. If you already have a larger amount available, you can move it straight to a separate goal account.

Can travel savings be used for other needs?

Better not. Separate goal savings help you see your progress clearly and reduce the chance of spending the money before the planned trip.

Is it worth investing money saved for specific goals?

It depends on the chosen solution, the risk and how firmly the date of use is set. What matters is that the money is available when needed and is not exposed to unnecessary risk. Money you will need within the next few weeks is better not invested.

Conclusion

To make sure the holidays and your vacation bring joy rather than financial worries, start with a realistic budget and regular saving. Separate goal savings will help you track your progress, and choose the most suitable way to keep the money according to the timeframe and your needs.

If you think investing could also suit your situation, take a look at the TWINO FLEXI terms.

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This material is for informational purposes and is not individual investment advice.