Budgeting for Fun Stuff: Your Next Vacation

Vacations don’t have to be low-budget or financially stressful. Learn to budget for your next trip and travel in style.

The Benefits of Budgeting for a Trip

Budgeting helps you control your financial life, achieve your financial goals, and improve your self-satisfaction. For example, budgeting for your next trip can:

Maximize your anticipation: Vacations are fun, and part of the excitement 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.
Help you “earn” the trip: Travel budgeting includes saving the money you need to go on the trip. Then, when the saving phase is over and you're ready to book your trip, you can be proud of your efforts.
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.

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. So here is some research guidance:

Compare prices for different dates and locations.
Look for travel deals through AAA, AARP, or other organizations.
Read reviews on travel sites.

Plan a Travel Budget

With all the information from your research, you should be able to estimate what your trip will cost. To get the most accurate estimate, break your potential costs out by these categories:

Transportation
Lodging
Meals
Tours and activities
Shopping

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 can make it easier to follow through with your savings plan. Check your travel fund periodically to see if you are on track and adjust your timetable appropriately. With the right planning, you can afford your next vacation!