The average vacation costs $3,000-$7,000. That’s a significant expense to fund from a single paycheck. Spread across months of systematic saving, it becomes manageable. A spreadsheet provides the structure to track progress and stay on target.
If you want a ready-made solution, the Travel Budget Planner handles all the formulas and tracking. But building your own gives you control over exactly what you track and how you visualize progress.
The Sinking Fund Formula
A sinking fund is simply money set aside gradually for a future expense. The formula is straightforward: Total Vacation Cost divided by Months Until Trip equals Monthly Savings required.
For a $4,000 trip that’s 8 months away: $4,000 divided by 8 equals $500 per month. If that feels like too much, extending the timeline reduces the monthly requirement. At 12 months, it’s $333 per month. At 16 months, it’s $250 per month. The trade-off is between how much you can save monthly and how far in advance you need to plan.
Setting Up Your Tracker
Building a vacation savings tracker requires estimating the total cost, creating a spreadsheet structure, and adding formulas to automate the math. Here’s how each step works.
Start by estimating the total cost. Break down major categories and add a buffer for unexpected expenses.
| Category | Estimated |
|---|---|
| Transportation | $800 |
| Accommodation (7 nights) | $1,400 |
| Food (7 days) | $700 |
| Activities | $400 |
| Miscellaneous | $200 |
| Buffer (10%) | $350 |
| Total | $3,850 |
Next, build the spreadsheet structure. Create columns for Month, Target amount, Deposited amount, Running Total, and Progress percentage.
| Month | Target | Deposited | Running Total | Progress |
|---|---|---|---|---|
| January | $385 | $385 | $385 | 10% |
| February | $385 | $400 | $785 | 20% |
| March | $385 | $385 | $1,170 | 30% |
Finally, add formulas to automate the math. For Running Total, use =SUM(C$2:C2) to sum all deposits up to the current row. For Progress, use =D2/$E$2*100 where E2 contains your total goal. This calculates percentage of goal reached.
Automate Your Savings
The tracking spreadsheet shows where you stand. Automation makes progress happen consistently without relying on willpower each month.
Direct deposit splitting sends vacation savings directly to a dedicated account. Many employers allow splitting paychecks across multiple accounts. Some people find they’re less likely to spend what they don’t see in their main checking - the money is saved before it ever feels available.
Automatic transfers work similarly. Setting up a recurring transfer on payday - even to an account at the same bank - turns saving into something that just happens. The spreadsheet then tracks what’s accumulated rather than reminding you to move money.
Where to Keep Vacation Savings
The account choice matters for both earning potential and psychological separation from spending money.
High-yield savings accounts earn 4-5% APY, remain fully accessible, carry FDIC insurance, and stay separate from daily spending. The interest won’t dramatically increase your vacation fund, but it’s better than nothing and the separation helps.
A dedicated account - even low-interest - provides psychological benefit. An account specifically named “Hawaii 2026” or similar makes the purpose clear and prevents accidental spending. The mental separation often matters more than the interest rate difference.
If You Fall Behind
Life happens. Sometimes the target amount isn’t possible in a given month. The spreadsheet makes it easy to recalculate and adjust.
Adjusting targets is the first option. Remaining balance divided by remaining months equals a new monthly target. If you’re $500 behind with 4 months left, that’s $125 extra per month on top of the regular target.
Reducing trip cost is another approach. Shorter duration, cheaper accommodation, different destination - each adjustment reduces the gap between what you’ve saved and what you need.
Delaying the trip is worth considering if the alternative is credit card debt. Taking a vacation financed by high-interest debt often costs more in stress and interest than waiting a few more months to save would have.
Handling Windfalls
Unexpected money - tax refunds, bonuses, gifts - provides an opportunity to accelerate progress. Directing some portion toward vacation savings can shorten the timeline or create a buffer for trip overruns.
The psychological benefit of being ahead of schedule is real. Watching the progress bar jump forward after adding windfall money reinforces the saving habit and makes the goal feel more achievable.
Cost Benchmarks
These ranges help calibrate expectations for different trip types. Your actual costs depend on destination, travel style, and timing.
| Trip Type | Typical (2 people) |
|---|---|
| Weekend getaway | $500-1,000 |
| Domestic week | $2,000-4,000 |
| International week | $4,000-8,000 |
| Two-week international | $6,000-12,000 |
Use these as starting points for estimation. Research specific destinations to refine the numbers for your trip.
Common Questions
When does it make sense to start saving?
Earlier timelines mean lower monthly requirements. Saving $250/month for 16 months is easier than $500/month for 8 months. Starting as soon as you know you want to take a trip - even before choosing specific dates or destinations - gives maximum flexibility.
What if the trip ends up costing more than estimated?
If you built in a buffer, you’re covered. If not, worth adjusting expectations during the trip or finding room in other budget categories. This is why the 10% buffer in the estimation phase matters.
What happens to leftover money after the trip?
Several options: roll it into the next vacation fund to get a head start, add it to emergency savings, or enjoy a nicer meal on the last night of the trip. There’s no wrong answer - it’s money you already mentally allocated to vacation.