Planning a Vacation Without Breaking the Bank
You don’t need to run a survey or review the data to know that vacations are expensive. While the average cost of a vacation varies drastically from family to family and based on several factors, one survey found that approximately three-quarters of Americans admit to falling into debt of at least $1,100 following a holiday. Another 68% admit to overspending. While a fun, worry-free vacation may be just what you and your family need to recharge and reconnect, you do not want short-lived happiness to result in long-term debt and stress. The good news is that you can prevent just that from happening by planning ahead, setting a realistic vacation budget and strategizing ways to stick to it.
Set a Budget
If you’re serious about taking a budget-friendly vacation, the first thing you need to do — before even selecting a destination or date — is set a budget. Determine how much you’re willing and able to spend on the entire trip, from airfare to lodging to entertainment. If you need to save for your vacation, be realistic about how much you can set aside each month or pay period. If you have extra money coming your way, such as tax refunds, bonuses and overtime pay, calculate that into the equation as well.
Create a Vacation Fund
Once you have a realistic budget in place, create a “vacation fund.” Only use money from this fund to pay for plane tickets, hotel fees and other upfront costs. Continue to add to this fund as you can and up until the date of departure. Whatever money is left in the account after paying for upfront expenses is what you have to spend while away. If you cannot afford something with the vacation money, you cannot afford it.
A vacation fund serves two main purposes. First, it can prevent you from becoming one of nearly 40% of Americans who have to cancel their vacation plans because of budgetary concerns. Second, it can give you a concrete idea of what you can afford while away, which may help you avoid overspending or charging items to credit.
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Plan Your Vacation
With a budget and solid financial plan to work with you can finally begin the fun part: planning. Consult with your family to pick a destination you will all enjoy. While you shouldn’t let money dictate where you go, you should remind your loved ones that the more elaborate the vacation, the longer you will need to save. For instance, a week-long camping trip may be possible in six-months, but an international getaway may require three years of saving.
Once you have a destination in mind, start calculating the cost of all travel-related expenses, both big and small. While your list will look drastically different from others, some of the biggest costs to consider are as follows:
- Transportation to, at and from your destination
- Food and drink
- Gear and equipment
Come up with a realistic estimated total of all expenses, and then multiply it by 1.5. The 1.5 multiplier should give you a little wiggle room for price changes, inflation, etc.
Consider These Other Cost-Saving Tips
Ultimately, budgeting properly and honoring said budget is the best way to avoid breaking the bank on a family holiday. However, you can make your budget work harder for you by using some tried and true money-savvy tips. Those are as follows:
- Book everything early. Travel costs typically only go up as the travel date approaches.
- Travel during the off-season.
- Book a hotel that serves a continental breakfast.
- Monitor deals often.
- If you can, plan to prepare all your meals yourself.
- Plan your activities well in advance to score discounts and deals, and to avoid “impulse” buying.
A family vacation should not cause financial stress at any point leading up to, during or after your travel dates. With careful planning and budgeting, and with the above tips, yours won’t.