From Yahoo Finance: 2025-06-02 09:00:00

Planning a family vacation but worried about going into debt? The average cost of a trip in 2025 is over $7,000. Consider opening a vacation savings account to set aside money specifically for travel expenses. These accounts can help you stay on track with your savings goals.

Vacation savings accounts are dedicated deposit accounts offered by some financial institutions for saving money for travel expenses. They work by setting aside small amounts of money on a regular basis, which can be used for travel-related purchases like flights, rental cars, lodging, and meals.

Consider the features and drawbacks of vacation savings accounts before opening one. These accounts may help you avoid overspending by keeping your travel savings separate from other funds. They can also offer convenience and automated savings, but may come with lower interest rates and limited access.

Compare vacation savings accounts to high-yield savings accounts, which offer potential for more interest and flexible access to your funds. High-yield savings accounts may be better for those who prefer flexibility, while vacation accounts provide structure for saving specifically for travel expenses.

To make saving for your vacation easier, set up automatic transfers, earn a bank bonus, plan backward for expenses, and use credit card rewards. Remember to separate your vacation fund from other savings to track progress effectively and avoid mix-ups.

Overall, the key is to set aside enough money for a debt-free vacation. Whether you choose a vacation savings account or high-yield savings account, the important thing is to make wise financial choices to build happy memories without accumulating credit card debt.

Read more: Are they worth it for families?