Planning a Vacation on a Budget
Pay off debt – Save money - Avoid Future Debt.
By Renauld Smith
Industry Veteran & Executive Director of IAPDA
The average family of four, spends around $4,580 on a vacation annually. This can equal as much as 8%-9% of the average household income. Often, we plan the holiday first, and afterwards we try to figure out how to pay for it. Change things around this year and establish your vacation budget first.
If you plan ahead, there are a lot of ways to design a vacation on a budget so you can enjoy your time away to the fullest and skip the post-vacation blues when you get back home.
Setting Up a Vacation Savings Plan
Before you start booking plane tickets and accommodations, making restaurant reservations and creating your itinerary, you should first consider creating a vacation savings plan. Earmarking money for your vacation ahead of time can be one of the most effective ways to plan a vacation on a budget.
Estimate your trip costs
To create your vacation savings plan, you must first get a sense of how much you might spend on your trip. To figure out how much your trip might cost, you’ll need to take time to do some research and cost comparisons.
You need to add up four main expenses per day: nightly accommodation, meal spending, daily transportation and activities. For each primary expense, you’ll want to calculate the average cost per day. It’s always best to overestimate to have some room for unexpected costs that may arise.
An all-inclusive vacation makes estimating your trip cost a lot simpler. In order to plan a vacation on a budget, you’ll need to confirm exactly what is covered in your fee and what may be an additional expense, such as excursions or specialty meals.
Create a Monthly Savings Goal
Once you’ve committed to your next vacation, simple math will help you determine how much you will need to save each month leading up to your trip. All you need to do is divide your estimated vacation cost by the number of months you have between now and your trip. If your budget is $4,000 for your trip that’s 12 months away your goal is to save $333 per month.
Looking at your household budget there’s always a few easy ways to save on everyday expenses by identifying things you can live without such as dining out or coffee at Starbucks every morning. Simple lifestyle changes, especially if they’re temporary are simple to stick to when you have an end goal in mind.
Keep Your Eye on the Ball – Stay Focused
Finding ways to motivate yourself to stick to your vacation savings goal is important, especially if your trip is many months away. Focus on your end goal every time you skip a latte or a dinner night out. Creating a separate savings account is a good idea as you can watch your balance grow and maybe be motivated to save even more.
Be Mindful of Your Spending While on Vacation
Use a debit card or a prepaid card for expenses on your vacation. That way, you'll be more aware of how much money you can spend. Carry a credit card with you for emergencies and use the debit or prepaid card for everything else.
Creating a daily limit for spending will help you keep you within your means. Having a strict set amount of spending per day is less overwhelming and will help you stick to your budget.
Depending on your accommodations and if it’s possible, cook some of your own meals. If your hotel provides a complimentary breakfast, be sure to take advantage.
Stay out of the gift shop and avoid souvenirs. Take more pictures and videos, they’re free!
Don't wait! Get the professional help you deserve!
Finding the right option is the first step towards a solution. Let iapda.org connect you with a specialist for a free evaluation to review your specific financial situation.
