Everybody needs vacation.
You need to be able to step back from the stresses of life and the worries of work to enjoy time with family and friends. Your physical and mental health can suffer if you don’t—not to mention your productivity at your job!
Now, you can’t just drive to the airport, pick a city, and hop on a plane. Even a trip to the beach takes planning and budgeting. Money doesn’t grow on trees, right? If you go on vacation with an “anything goes” mentality, your dream trip can become a nightmare. But with a little planning and saving, you can enjoy a great vacation.
How Do I Estimate the Costs of Vacation?
Just like you create a monthly budget for your household needs, you need a budget for your vacation. But don’t wait until two months beforehand to figure the costs—it’s unlikely you’ll be able to save up enough in time. Here’s a step-by-step formula for estimating the expenses:
- Decide where you want to go.
- Figure out how much you’re willing to pay for travel, lodging, meals, tours and other expenses.
- Add up the costs for you and your family.
- Divide the total cost by the number of months until you want to take the trip.
- Create a line item in your budget and save that much money every month.
If you started putting away money in January and wanted to go on vacation in July, then you would have seven months to save. Here are a few different cost levels to use as examples:
Low-cost: $2,000 divided by 7 = $286 a month
Medium-cost: $4,550 divided by 7 = $650 a month
High-cost: $10,000 divided by 7 = $1,429 a month
If you can’t afford the trip you want to take, you have three options:
- Choose a less expensive vacation option, like a three-day excursion instead of a weeklong trip.
- Bring in extra income and put that money toward vacation.
- Sock away what you can and go when you’ve saved enough.
When you’re planning a luxury vacation—you know, that trip to Iceland or Australia—you may need to save for several years. I don’t know many people who can put away over $1,400 a month! Just keep working toward your goal. The reward will be worth the work you did and the patience you showed.
Notice I didn’t say anything about a credit card. That’s because you never want to go into debt for a vacation! You’re robbing from your future when you do that. If you just can’t save for a vacation right now, that’s okay. You can create just as many memories by taking a staycation. One woman I coached took a week to stay in town and be with her kids, and she told me it was one of their best and most memorable vacations!
How Can I Save Money on My Vacation Costs?
Just because you’ve saved money for vacation doesn’t mean you need to spend it foolishly. You can make the most out of your hard-earned cash by taking a few practical steps. Here are a few suggestions:
- Spend money on experiences, not on souvenirs. Memories last, but that snow globe won’t.
- Look local when it comes to eating out. Food trucks, street vendors, local cafes and shops can save you money because there’s no huge corporate overhead eating up the profits.
- Create envelopes for every day. Put your cash for each day in separate envelopes and take only that money. This will help you not overspend.
- Ask about discounts. Companies offer discounts to a variety of people: military personnel, teachers, students, clergy, police officers. It’s always nice to shave 10% here and there.
- Take vacations during the off-season. If your kids want to go see that famous mouse and his friends, don’t go in the middle of the summer. Or if you want to go to the beach, go over Christmas break. Sounds weird, but it’s less expensive and usually less crowded.
- Download location-specific apps. Many of them offer discounts and give you inside information on the best things to do and see—and some of the attractions may be free!
One other tip: Talk to people who have been there. You probably know someone who can give you pointers on how to save money. It never hurts to ask!
What Vacation Costs Do People Forget?
When you budget for vacation, you plan for the basics: travel, lodging, food, entertainment. But many people forget about the not-so-obvious costs. These can add up quickly. To keep your vacation from accidentally busting your budget, here are some additional costs to think about:
- Pet care. Fido and Fluffy need somewhere to stay. Even if you pay someone to stay at your house, you need to factor that into your budget.
- Plant and yard care. Who’s going to water your plants while you’re gone? Will your yard need attention, too? If so, add that expense in.
- Airline extras. You thought you paid all the fees when you bought the tickets, right? Sorry. Some airlines charge for any bags you check. Some charge for selecting a specific seat. Most charge for a meal. Keep these potential fees in mind.
- Parking. Think of the places you will park: long-term parking if you leave your car at the airport; theme parks; sports stadiums; downtown garages; parks; zoos. You get the idea. An extra $20 a day adds up fast! Budget for it.
- Taxes and fees. Depending on location, you’ll get hit with occupancy taxes, Wi-Fi usage fees, sales tax, or resort fees. Count yourself lucky if you don’t have any of these. Ask before you book!
- Tips. This cost gest left off the budget all the time. Think about baggage handlers, restaurant servers, taxi drivers, and valet staff. Part of their income depends on what you give them. Tips can range anywhere from $5–20 per vacation day. Plan for them.
- Stuff you left behind. As a family of five, we always forget something. It could be something minor like a toothbrush, deodorant or sunscreen. Or sometimes it’s something bigger like a coat or good shoes. Make a packing list to avoid this problem.
- Foreign fees. If you travel overseas, you could pay bank transaction fees; visa fees; import taxes; or current exchange fees. It all adds up. Check with your bank beforehand to get an estimate. At the very least, you’ll need to let them know you plan to use your debit card outside the country.
Now hear me on this: I don’t want you to sacrifice your future because you feel pressured to take your kids on a fancy trip like the other families on your block. Remember, those other families may be broke! Stick to your long-term plan for building wealth. You can take that dream vacation later—when you have all the time and money you need!