Everyone loves a vacation. Studies have shown that even just planning one, and having it on the calendar, improves both your quality of life and work ethic. However, vacations can be expensive. Especially if you go into it without any sort of planning or knowing how expensive where you are traveling to will be. You can eliminate stress, and just focus on how much fun your vacation will be, by setting up a simple budget when you start planning your vacation.
START PLANNING EARLY
Before you get set on a specific location or vacation plan, you should find out how much it will cost to go somewhere. Brainstorm, and make a list of your top places you want to visit. Having a bunch of vacation ideas will help you find the best one for this specific trip, and you can always save the other vacation ideas for later on when you have the chance to take another trip.
PLAN OUT THE BIG EXPENSES
The biggest expenses of a trip are the travel costs, i.e., plane tickets, and the cost of hotels. Will you be flying or driving? Do you want to stay in a hotel, or rent a home like an Airbnb? These are important things to think about, and are the most expensive parts of your vacation.
THINK ABOUT THE SMALLER EXPENSES
You’ll have to eat on your trip. You’ll also probably want to spend money on tours, museums, or site seeing. Will you have to purchase anything before your trip? Include this in your budget, as well. Planning for all of the little things will keep you from getting to your destination, and spending all of your vacation money on the first day.
MAKE A DAILY BUDGET
Once you’ve calculated how much your trip will take, and put it on the calendar, you’ll want to set a daily budget for while you’re out, so you don’t go over budget. Average out how much it will cost for each meal, and then multiply that across how many days you’ll be traveling. Look up the prices of all of the attractions you want to visit and see.
Now that you have a plan, and have a budget for the trip, you’ll need to start saving to make the trip possible. You want to avoid dipping into your rainy day fund if you can avoid it. Either start another vacation bank account with your bank, or get really good at not touching the money you have set aside for your vacation. You can also collect cash and set it aside in a physical envelope in your home, only taking it to the bank before your trip to pay for your expenses. Make sure that your budget also includes essential financial goals (like these) besides the trip. If your margins are too small, something as simple as a car repair could throw everything off.
SAVE MONTH BY MONTH
Saving the entire cost of your trip all at once is a daunting task. Calculate how many months are left before your trip, and then divide how much money you need to save by how many months are left. You’ll be left with an amount that you’ll need to put away every month to make your trip possible. If it helps, you can also set this up by week, or biweekly. If you get paid biweekly, then figure out how much you’ll need to save from each paycheck.
PAY WHAT YOU CAN BEFORE YOU GO
Paying for most of your trip before you even leave is a great idea, to avoid having to spend a large chunk of money all at once. Pay for plane tickets, and prepay hotel or Airbnb rooms before you leave, as you save. That way, once you leave, you just have to take care of the daily expenses. When you are paying before you go, make sure you understand the cancellation and refund policies, just in case of emergency. We recommend getting travel insurance, which will take care of these things if you have to cancel or postpone your trip.