Start saving now for next year's vacation

U.S. families told the Travel Industry Association of America that they expected to spend an average of just more than $1,000 on their longest trip this summer. And despite soaring gasoline prices, that's a 7 percent decrease from what they spent last year.

One reason: They plan to spend less time away from home this year.

Still, for a family of four to spend a week on a road trip, $1,000 is probably at the low end of realistic expenses — and a lot of those families will be putting the whole cost on plastic.

But how about preparing for next year's family vacation now? By saving as little as $20 a week (for the economy $1,000 trip) to $40 a week (for the more lavish $2,000 journey), families can avoid the interest they'd be paying on the credit card bills.

Ten tips to get you started on that vacation fund:

1. You'd be hard pressed to find a financial adviser who didn't suggest the latte factor. Instead of stopping for a cappuccino or a latte on the way to work, brew your own coffee at home and take it with you. Put the difference in a vacation fund and you're on your way.

2. Soccer practice is over and the kids are begging for a pizza. Get them one. But instead of stopping at the pizza parlor, hit the frozen food aisle at your grocery store and bank the savings.

3. A couple of generations ago, Christmas Clubs and Vacation Clubs were part of the culture. You got a coupon book from the bank and paid so much a week. The bank then sent you a check just in time for gift giving or trip-taking. Those clubs may be a thing of the past, but what's to stop you from opening a passbook account at your bank or credit union and treating it just like a Vacation Club?

4. Better yet, if your company or union offers a way to have money automatically withheld from your paycheck and placed into an account, use it. After a few paychecks, you'll get used to living on the smaller take-home amount and the money will be there for your next vacation.

5. Make vacation savings a family affair. That will make it more concrete to kids.

6. Watch those recreation bucks. The kids want to go to the movies with their friends? Add in the movie theater popcorn and you're looking at a healthy chunk of change. Maybe you can rent a DVD and let their friends come over to the house to watch a movie instead. The microwave popcorn costs a small fraction of the movie variety.

7. Here's another way the children can make a contribution. Are they willing to give up junk food? A couple bags of potato chips a week from the supermarket? A couple half gallons of ice cream? Items like that can quickly add up to $10-a-week savings, which is halfway toward that $1,000 trip.

8. Save the money somewhere — even in a jar — for up to six months before your vacation is scheduled. Then buy a six-month certificate of deposit. The interest may not amount to a whole heck of a lot, but it's still something above your investment.

9. Here's one the financial advisers usually eschew. But for some people it's the only way they can save . Have your employer over-withhold your federal and/or state taxes. You'll have a fat refund check coming your way in the spring, just in time for vacation.

10. If your company offers a flexible spending account for prescriptions and other medical costs, take advantage of it. But instead of using the funds to pay immediately for the medications, pay them out of pocket and send in all the receipts just in time to withdraw the money for vacation. You're still getting the benefit of pre-taxed money.