I’ve included some ideas on how to budget for a vacation. Additionally, be sure to our “Destinations” page to help get some ideas for your next vacation!
*Last updated 1/15/2024
12 Tips on how to budget for a vacation
1. Set a Budget
This is the most important step so be sure to decide how much you want to spend in advance. Additionally, there are two ways to determine your vacation destination. First, you can decide your ideal destination and then save up to go there. Second, you can determine how much you want to spend and then decide what destinations meet that budget. However, if your dream destination is some where like Hawaii, Europe or even Disney World, you might have to save to make it work. Consider your current financial situation and allocate funds specifically for the trip.
2. Choose Your Destination
Research the cost of living, accommodation, transportation, and activities at your chosen destination to estimate your expenses accurately. Certain destinations are going to be much more or less expensive than others.
3. Create a Detailed Itinerary
Plan your daily activities, including sightseeing, meals, and any excursions you want to take. I am a spreadsheet person, so I find that this helps me estimate my daily expenses. Also, Google sheets is good as you can share with anyone else you are travelling with.
4. Pick Accommodations
Unless you are camping, your accommodations will likely be the most expensive part of your vacation. Research options and book in advance. Look for deals, discounts, or consider alternative options like vacation rentals, VRBO or Airbnb. If price is a concern, you can definitely save a lot of money if you consider camping. However, larger campgrounds with amenities like swimming pools, electric and laundry have become more expensive as well and might even cost over $100 per night. Camping in State Parks and National Parks will be some of the least expensive options. However, many of those place will book up as soon as they become available, so you have to plan far in advance.
5. Choose Transportation
Additionally, if you are flying, transportation will likely be your second most expensive item in the budget. When you have kids or a larger family, the price of driving, if possible, can be considerably less expensive than flying. Consider renting a car, using public transportation, or rideshare services at your destination.
6. Meals and Dining
Plan your meals and set a daily food budget. You can save money by eating at local markets, cooking some meals yourself, or opting for budget-friendly restaurants. I find that this is really the thing that can blow up a budget quickly. A lot of people tend to take the approach “We’re on Vacation!”. However, setting a food budget and sticking to it will really help you meet your vacation budgeting goals.
7. Activities and Entertainment
List the activities and attractions you want to visit. Check entrance fees and plan accordingly. Look for any discounts or combination tickets for attractions. I find that when you are traveling to a “dream location”, it doesn’t make sense to travel to some where like Australia, but then not spend the money to do the things that you really want to do, so make sure to factor those prices into your budget. If it is too expensive, maybe save that trip for when you can do the things you want to do.
8. Souvenirs and Shopping
Some people like to spend money on experiences, where other people like to bring back some mementos or go shopping. Know what type of person you (or your spouse) are and budget accordingly.
9. Have an Emergency Fund
Allocate a portion of your budget for unexpected expenses or emergencies. We had one trip where our camper had a tire blowout. These things happen, so it is good to have some extra money allocated towards the unexpected.
10. Decide if you need Travel Insurance
Consider purchasing travel insurance to protect yourself from unexpected events, such as trip cancellations, medical emergencies, or lost luggage. Personally, I decline the travel insurance for cheaper flights and hotels, knowing that I can afford the unlikely circumstance that I won’t be able to make it for some reason. Our March, 2020 Germany vacation was canceled due to covid. We were able to get back our flight points and most of our hotel deposits. However, we did lose a non-refundable payment for a family-ownded boutique hotel in Rothenburg ob der Tauber. I’m sure those owners were also hurting due to the large loss of revenue. However, we do have some credit if we ever return.
11. Save Money in Advance
Start saving for your vacation well in advance. If money is tight, consider setting up a separate savings account dedicated to your travel fund.
12. Monitor Your Spending
Keep track of your expenses during the trip to ensure you stay within your budget. Use apps, like Mint, that can help you manage and track your spending.
Conclusion
Most people like to take vacations and I’m assuming that includes you since you are reading this page. However, figure out your time and budget and find a place that makes sense. I recommend that you don’t borrow for a vacation or charge it to a credit card. You only pay more in the long run and it could prevent you from taking other vacations in the future. Instead, adjust your vacation destination and expenses to meet those constraints.
Additionally, consider a staycation and take some day trips to nearby locations. In the end, the goal is to make long-lasting and fun memories with your family and you can certainly find those places close to home as well. Good luck, safe and happy travels!