Financial well-being May 16, 2023 By
Vacations don’t have to be low-budget or financially stressful. Learn to budget for your next trip and travel in style.
You promised the kids a trip to Disney, but how will you ever afford that? Can you afford a European getaway this year, or will it wait until your next raise? Is driving across the country a more economical approach to checking off several locations on your bucket list? The answer to all these questions is “budgeting.”
The Benefits of Budgeting for a Trip
If you're not in the habit of budgeting, it may seem like a vacation buzzkill, like doing homework on your birthday. But budgeting helps you control your financial life, achieve your financial goals, and improve your self-satisfaction. Budgeting for your next trip can:
- Maximize your anticipation: Vacations are fun to spend with your family or friends, exploring different areas and enjoying new experiences. Part of the excitement of a trip is planning it. You get to dream about what it will be like for months before you leave home and experience it in real-time. Budgeting for your vacation begins several months before you go and requires in-depth research into where you will go, how you will get there, and what you will do once you arrive.
- Help you “earn” the trip: Travel budgeting includes saving the money you need to go on the trip. When the saving phase is over and you're ready to book your trip, you can be proud of your efforts. You'll feel like you earned the trip by following your savings goals.
- Reduce your overspending stress: Traveling can be financially stressful when you do not take the time to prepare a budget and save money. Your vacation will not be as fun as you'd like if you spend the whole time worrying about whether you can afford it. In addition, coming home with a mountain of debt is no fun. Budgeting for your trip can reduce your financial stress.
Do Your Research
The first step in creating a budget for your next trip is knowing how much money you’ll need. Luckily, almost everything you need to know is available on the internet, and researching travel information can be a fun part of that trip anticipation we talked about before. Here is some research guidance:
- Compare prices for different dates and locations. Keep your date and location options open unless you're traveling for a specific event. Check out flights and hotels in other areas and during different times of the year. You may find some travel bargains by visiting locations during their off-peak times. When the weather is poor where you live, you can always find some sunny place to visit. Also, check prices on different days of the week. Sometimes if you fly on Tuesday instead of Saturday, you’ll get a lower fare.
- Look for travel deals through AAA, AARP, or other organizations. One of the perks of membership in certain organizations is travel discounts. Check out the offers available through any of your memberships. And your credit card may offer specials on travel as well. Also, look into travel discounters like Orbitz and Expedia to see if they have any special offers you could take advantage of.
- Read reviews on travel sites. Saving money on travel is excellent as long as you have a pleasant trip. When researching your trip, read the reviews on various websites. People's opinions may vary, but the reviews will help you avoid a bargain that isn't a bargain. Use the reviews to decide where to spend your money and what attractions to skip.
Plan a Travel Budget
With all the information from your research, you should be able to estimate your trip's cost. To get the most accurate estimate, break your potential costs out by these categories:
- Transportation: If this will be a driving trip, estimate miles, gas, and toll charges. Remember the cost of parking, which can be shockingly high, especially in large cities. If you are flying, don't forget to include ground transportation to and from the airport.
- Lodging: Read the fine print to know what taxes and fees you’ll pay on top of the overnight rate. A bed tax can add quite a bit to your hotel bill in some places. Be sure to include all applicable fees for Airbnb, as well.
- Meals: Consider buying some groceries when you arrive to keep the cost of breakfast, lunch, and snacks low. Plan to take advantage of the complimentary breakfast if one is offered at your hotel. Also, plan to check out the local street food scene to keep your food costs low.
- Tours and activities: Plan a mix of free activities like using public parks and beaches or the hotel pool and more expensive experiences like amusement parks and museums. You may want to splurge on one very expensive activity like hang gliding or jet skiing. Now is the time to figure those expenses into the budget.
- Shopping: No matter how frugal you are, you will buy some things to bring home from your trip. This is the time to think about what you need and plan a budget for souvenirs.
Make a Savings Plan
Now that you know how much money you need for your next trip, all you have to do is make a plan to save that money. Be realistic about how much you can set aside for this vacation every month, and be patient – saving takes time. If it is a family trip you are planning, involve the whole family in the savings plan. Ask each person what they think they can live without to save for the vacation. Maybe some allowance money ends up in the vacation savings jar. Perhaps you or other family members can pick up some side jobs to contribute to the vacation savings fund.
Consider setting up a separate savings account to save your travel money. Automatic deposits from your paycheck or checking account make following through with your savings plan easier. Check your travel fund periodically to see if you are on track and adjust your timetable appropriately. With the proper planning, you can afford your next vacation!