Families that fail to prepare and follow a vacation budget bring home more than postcards, souvenirs, and a tan. They also bring home debt. Sound financial planning that includes a reasonable vacation budget can help individuals and families avoid paying unnecessary interest or depleting rainy-day funds.
Why Creating a Vacation Budget Is Essential
It’s not uncommon to slip into debt when underestimating the cost of traveling, dining out, shopping, and participating in excursions. For instance, an all-inclusive resort may not charge you for on-site meals and amenities. But when the entire family wants to go snorkeling along the reefs, the boating and instructional packages can strain your wallet. Rather than take a pay now and deal with it later approach, these simple steps can help you maximize your leisure experience and not feel financially overwhelmed when you return home.
Step 1: Determine Your Destination and Duration
There are a variety of factors that drive the cost of a vacation. Some people save a significant amount of money by scheduling their getaway just before an area’s peak season begins or after it ends. If the weather is good, you are effectively enjoying a hotel discount. Additional hotel discounts include travel specials that offer a savings based on the number of nights you plan to stay.
If you plan to travel to another country that uses a different currency, be sure to research exchange rates and prepare ahead of time. By avoiding the kiosks in international airports, you can avoid unnecessary fees.
Step 2: Establish Accommodation Options
Whether you are traveling within the United States or out of the country, it is important to research the hotels, motels, Airbnb, and hostel options. When securing a room, beach bungalow, studio apartment, or shared space that you feel comfortable with, the prices vary greatly!
The bustling small city of Pune, India has wonderful culinary opportunities, cultural sites, entire sections dedicated to shopping, and a wide range of places to stay. You can book a high-end hotel for well under $200 per night. Even 5-star hotels are available for under $75. Low-budget options such as hostels run between $9 and $20 when using the American dollar. Make sure you research all your options as you plan your adventure.
Step 3: Plan Transportation
We all know that summer is a busy season for traveling! It goes without saying that securing a plane, train, or bus ticket in late spring or right before you leave means paying a maximum fee.
Sources such as Leisure and Travel estimate that last-minute flights typically cost nearly 25 percent more than booking them in advance. Although airfares can be challenging to predict, it’s generally a good idea to secure flights for North American, South American, African, and European destinations 3-10 months early. If you plan to travel to Asia, consider purchasing airfare 5 to 10 months prior to avoid paying higher-than-necessary prices. This same reasoning generally holds true when booking passage on pleasure cruises, trains, and other modes of transportation.
Be sure to explore all modes of transportation to get to your destination and while you are visiting to find options that work for your budget.
Step 4: Budget for Meals and Dining
According to Forbes magazine, the average cost of eating breakfast, lunch, and dinner at restaurants runs about $105 per day in the U.S. When traveling out of the country, that cost declines to about $50, not including beverages. For a family of four, you are looking at $200 per day added to the price of rooms, activities, shopping, and other leisure expenses. If you stay within the U.S., that cost soars to $400 per day.
In terms of reducing your vacation budget, consider choosing only select dining options that differ from the meals you enjoy at home. Rather than just eat out for convenience’s sake, utilize the mini fridge and take advantage of no-cost continental breakfasts at the hotel. It may be worthwhile to weigh the price of a room with a full kitchen or outdoor barbecue grill and groceries against shelling out $200-$400 in restaurant meals.
Step 5: Include Entertainment and Activities
One of the ways to lower your vacation budget and maximize entertainment and excursion expenses is to balance premium options with low-budget ones. At first glance, the latter might sound like cheap alternatives. But many of the awe-inspiring sights and activities are relatively inexpensive or free.
Research the cost of professional sightseeing tours, A-list entertainment, and other top-tier leisure experiences. Consider how many days you’ll spend at your destination and choose the best options for your group. Then check out low-cost and free activities you and your loved ones will enjoy. Museums, historical walking tours, and places like Savannah, Georgia’s 30-acre Forsyth Park don’t cost a penny. You and the group can bring a picnic lunch, throw a Frisbee around, and have a memorable bonding experience without touching your vacation budget.
Step 6: Account for Miscellaneous Expenses
One of the sorely overlooked vacation budget items involves miscellaneous expenses. Travelers are prone to impulse purchases such as souvenirs and duty-free products, among others. It’s generally a good idea to include a line item that caps miscellaneous spending. And don’t forget to include protections such as traveler’s insurance in the vacation budget.
If you find yourself stranded in need of fast cash, keep Allegiance top of mind. Allegiance offers a Fast Cash Loan which allows you to apply and borrow money within 60 seconds. No credit check is required!
Step 7: Create a Contingency Plan
Not enough travelers plan for things to go sideways. When people lose sight of their budget, they start to overspend by swiping plastic. Financing a vacation with unplanned credit leaves hard-working families in a tight spot when they return. One way to avoid this issue is to budget for unexpected expenses.
Consider setting aside 10 percent of the total vacation budget. It may also be prudent to omit the vacation rainy fund when discussing planned vacation expenses. The point is not to feel enticed to use the extra cash unless it becomes necessary.
A realistic vacation budget helps people enjoy their time off from work, create lasting memories, and bond with loved ones away from sometimes stressful daily life. If you don’t have the cash on hand to pay for a once-in-a-lifetime vacation, there are options that can fit into your monthly budget.
If after careful budgeting you realize in order to take your dream vacation you may need some extra funds, talk to your local credit union about personal loans, home equity lines of credit, fast cash loans which are funded in 24 hours, or cash back credit cards. While paying for a vacation up front is ideal, sometimes individuals and families need a little assistance to make their dream vacation come true.
Allegiance Is Here to Help You Budget for Vacation
If you plan to travel close to home or across the world, Allegiance Credit Union offers a variety of options to help you maximize your trip in a cost-effective fashion. Contact us today to discuss how a personal loan, home equity line of credit, fast cash loan, or cash back credit card can support your dream of a memorable family vacation.