How to Financially Plan for a Vacation

How to Financially Plan for a Vacation
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Whether you’re looking for a grand get-away at a 5-star resort or a frugal, family-friendly road trip, advanced planning can take the guesswork out of your vacation budgeting.

Plan Your Trip

Spur-of-the-moment trips tend to cost a lot more than well thought-out vacation planning. Take into consideration not only where you want to travel and how long you want to stay, but also the time of year. High season can be far more costly than the offseason, so you’ll need to plan accordingly. If you’re traveling internationally, consider the exchange rate when selecting your destination. Your money will go farther in some countries than others. Buying airline tickets in advance can also save you money, as can opting for train, auto or bus travel. Explore multiple lodging options to help you get the most from your budget. For example, hostels, bed-and-breakfasts, Airbnb and motels can be less expensive than hotels. And, don't forget travel booking and hotel sites.

Start Saving in Advance

Create a detailed budget for your trip including travel and transportation costs, lodging, tips, food, attractions and excursions, and shopping. Contact the chamber of commerce or tourism bureau in your destination city and ask for pricing guides - or hop online and visit their sites. Once you determine how much the trip will cost overall, divide that amount into a monthly savings plan you’re comfortable with. For example, if your dream vacation will cost $12,000, and you can budget $1,000 a month, you’ll have your trip paid for in a year. Open a savings account for your travel fund so you aren’t tempted to use the cash for other purposes.

Expect the Unexpected

Budget a little more than necessary to cover unexpected issues that may arise during your trip. For example, you may have travel delays that tack on extra days in a hotel or lost luggage requiring a trip to the mall for holdover clothing. It may give you peace of mind to tuck away extra credit or debit card to have on hand for emergencies. Operating on an ultra-tight budget can sap some of the fun out of your trip, so build in financial wiggle room.

Involve the Whole Family

If you're traveling with children, make your financial vacation planning a family event. It may be necessary to forego extras while you’re socking away vacation money, so having everyone on board with the planning can help ease the pain and teach kids financial responsibility. For example, if your family orders pizza every Friday, consider making it an every-other-week treat with the understanding that half your pizza budget goes toward the trip, or decide how much each person wants to spend on souvenirs and include that figure in your budget.