Budgeting for Your Next Vacation

The notion that a little saving goes a long way is especially applicable to budgeting for a vacation. If careful thought is put into budgeting, then the vacation you need may be within reach. In this article, we’ll go over how you can plan, budget and save.

Planning Ahead

After choosing your destination, it’s helpful to make a plan for every cost you know you will encounter. You can group these expenses into categories, such as lodging, transportation, food and activities. From there, do our research so you can make decisions about how much you want to spend and consider ways to save in each category. For example:

1. Lodging – Will you need a hotel or vacation rental home, or can you stay with a friend or relative in your destination? Can you split lodging expenses with anyone?

2. Transportation – Will you fly or drive? If you fly, be sure to consider whether you will need a rental car once you arrive, or factor in ride share and public transportation costs. If you drive, try to estimate the cost of gas and the impact on your vehicle.

3. Food – Will you eat out for every meal or buy a few groceries when you arrive and make some meals yourself? There are probably meals you’ll want to splurge on, and you may find perks such as breakfast being included at your hotel.

4. Activities – Most tourist destinations have a website that lists all the activities in the area. While some activities will surely cost money, usually there are a lot of free things to do in almost every destination. You can also look for deals if you buy tickets early or online, or if you buy as part of a package. When building your budget for this category, also consider whether you will be bringing home souvenirs or memorabilia from your trip.

Finding Room in Your Budget

If you don’t already, track your spending for two or three weeks. This will allow you to see where you put every dollar and you may find yourself saying, “I spend that much money at the coffee shop each week?” There may be items like this in your budget that aren’t crucial to your day-to-day life. Cutting back in those areas leaves more money to put toward your goal each month. Check out our article on Healthy Financial Habits You Can Adopt Today to get started with ideas. If you can be disciplined in this area, you will reach your goal before you know it!

Expect the Unexpected

It is also a good idea to set aside a small amount of money for unplanned expenses on vacation. For example, if you forget to pack everyday items such as soap or shampoo. Bigger ticket items like car problems or lost luggage can also pop up unexpectedly. You will have more peace of mind knowing you can cover these expenses.

If you remember to plan, budget and save, you can soon be on vacation!