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For Your Life August 24, 2021

Taking a vacation on a budget

A vacation—be it a week in an exotic locale or time off at home—provides a well-deserved break and a chance to reset. This is why the finances of taking vacation shouldn’t be stress-inducing. In fact, there are a host of vacation options depending on your budget. 

There are several key components of vacationing on a budget. You’ll want to stay on track with your savings goals while still having a good time. The good news is there are plenty of ways you can have both without having to sacrifice. 

Here’s how you can keep your personal finances on track while still making the most of your time off.

Plan ahead

Everyone loves a spontaneous trip every now and then, but the smart way to take time away is by planning ahead. Whether you want a weekend out of town or are planning the trip of a lifetime, it makes sense to think about the basics of your vacation before you buy tickets and a place to stay. 

You can save a significant amount of money if you prepare for your trip ahead of time. Start by coming up with a few potential places you’d like to visit. Domestic trips are usually less expensive than international vacations due to flight costs and, depending on the locale, exchange rates.

Once you know where you want to go, you can keep tabs of the cost of getting there as well as what you can spend during your vacation. There are several websites that track the average cost of a plane or train ticket that can help you pick the right time to buy. You’ll also want to look at the cost of activities and restaurants you may want to visit while you’re there. 

Save up

Ideally you should save for a vacation rather than pay for it on a credit card. This helps ensure you don’t throw your personal finances off-track, particularly as credit card bills and interest can add up quickly. Plus, if you know how much you have to spend while you’re on vacation, you can get a better sense of what you can afford while you’re there.

Saving for your trip before you take off can broaden your options, both in terms of where you can go as well as what you can do when you get there. The more you save for vacation, the more you can indulge in some of the luxuries you might try to avoid if you put these charges on a card.

If you put aside money for vacation into a high-yield savings account, you’ll also earn interest on your cash. This can help generate more cash for you to use while you’re away.

Stay financially savvy

Just because you’re treating yourself to some rest and relaxation doesn’t mean there aren’t budget considerations to keep in mind while you’re doing it. Many tourist destinations are more expensive than you might be used to at home, which can cause sticker shock and overspending. Your money might not go as far as it would back home, especially if you’re visiting a city or country with an unfavorable exchange rate.

Set up a daily budget to keep your spending under control. You may not have to follow it down to the last cent—even a rough daily budget helps keep expenses under control. When you do create your budget, set aside a little extra money to allow for indulgences, such as gifts, experiences, or expensive restaurants. If you plan to take in a show or other ticketed experience, shop around ahead of time to find the best value. 

Get creative with your destination

There are several ways to make a vacation unforgettable. Sometimes that means staying in luxury accommodations—other times it may mean camping under a canopy of stars. So long as you’re open to a multitude of experiences, you can create a vacation that works for you. 

Sometimes this means finding a less expensive lodging option (e.g. a short-term home rental or cheaper hotel). In other cases, it may mean opting for a trip that’s half as expensive and just as rewarding (such as budget-friendly travel and lodging). 

There are also unconventional ways to explore a new locale. Take London’s houseboats, for example: the varied canals that run through the city are home to a multitude of houseboats—some of which are listed on home-sharing websites. These options are usually cheaper than a hotel stay and may get you closer to parts of the city that are otherwise out of your budget. Plus they’re much more unique than a hotel room.

Going away without breaking the bank

Everyone deserves a vacation—especially if you haven’t been able to get away for a long time. That being said, you don’t have to spend a fortune or throw your budget off-kilter to do so. With some forethought, planning, budgeting, and researching, you can embark on a trip that can help you recharge and reset.

When you save up before you go wheels up, you can work with a set budget for your trip. This empowers you to plan your vacation before you go, which can snag you a bargain on the essentials like where to stay and how to get there. When you don’t have to worry about taking on debt to have a good time, you’re free to make memories that last a lifetime.

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