How much to save for a vacation
The average cost of a vacation in 2025 is $7,249, according to travel insurance marketplace Squaremouth — a 24% increase from 2024.1 Where do you begin?
Our 50/15/5 rule is a guideline for saving and spending: Aim to allocate no more than 50% of take-home pay to essential expenses, aim to save 15% of pretax income for retirement savings (which includes any employer contributions), and keep 5% of take-home pay for short-term savings like for vacations. Your situation may be different, but you could consider using our framework as a starting point.
How to save for a vacation
Find ways to cut spending
In addition to our 50/15/5 framework, you could examine your expenses and determine what's essential. Consider cutting or reducing what isn't needed. This can go a long way with allocating more money towards saving for a vacation.
For example, your fixed expenses, such as rent or mortgage loans, car payments and insurance, and childcare or pet care are likely to be the same each month, albeit your variable expenses are not as consistent.
Helpful tips to find ways to save include:
- Looking for deals at the grocery store.
- Creating meal plans and eating out less.
- Reviewing your subscriptions and memberships.
- Cutting your utility bill by keeping your home a little cooler in the winter or slightly warmer in the summer.
To learn more, read Fidelity Smart MoneySM: How to save money
Make a budget
Create a budget to keep track and record all of your expenses, and even to monitor your adjustments. Today, there are lots of tools you can use: simple pen and paper, excel spreadsheets, and even apps.
Fidelity's free spending and budgeting tools can also help you track spending and build a budget. This tool allows you to link all of your accounts, and all of the categorization and analysis is done for you.
No one person's budget will look the same. This is because we live diverse lives with varying expenses. For instance, your living expenses, family and household needs, debt, and investments and savings will not mirror your neighbor's. Focus on your needs and develop a budget for your financial goals like saving for vacation.
Factor in everything your trip will include
When you're ready to add to your vacation fund, depending on your destination, consider researching how much your overall trip will cost so you don't come up short. Also, look for budget friendly options when factoring in your transportation, lodging, food, entertainment and excursions, and even emergency money for unexpected situations.
Make your savings a little hard to access
Keep money earmarked for your vacation or other short-term goals separate from your daily spending money and your emergency savings. Setting your vacation fund apart could help reinforce the idea that you need distinct buckets for distinct goals. Your vacation fund is for one purpose and your daily spending and emergency savings are for another.
Putting your vacation funds slightly out of reach may help you avoid spending your savings prematurely. Nothing is too far out of reach in these days of easy electronic transfers, but putting your vacation funds in a separate savings account with no debit card access forces you to go through a couple of steps to access it.
Make saving a habit
Saving can be gratifying. Making it a habit to save, not only for vacation, can be rewarding. To add, saving for short-term goals like an upcoming vacation can help you practice for the longer-term goals like retirement.
Once you've reached your savings goal and are ready to travel, make sure to read Fidelity Smart MoneySM: How to save money on travel to stretch your vacation dollars even further!