If you’re feeling drained or overworked, now might be the perfect time to go on vacation. Maybe you’ve been planning your dream vacation for years, or maybe you just decided it was time for a getaway last night. No matter when you decided to start planning your trip, it’s important you begin budgeting. After all, vacations aren’t cheap. Follow this guide for how to budget for your dream vacation.
It’s much easier to save money when you know how much you’ll need for your trip. Your first step to budgeting for your vacation should be planning it, including anything from storage solutions to what you’ll do for fun while you’re away.
First, you should choose your destination so you can begin crunching numbers. Include travel costs such as airline tickets, transportation costs once you’ve reached your destination, accommodations, and extra money for activities you choose to do on a whim.
A complete list of things you should budget for are:
- Public transportation/taxis
- Travel insurance
It may not be possible for you to get an exact figure for how much you’ll be spending, but it does help to be as specific as possible so you have a realistic estimate.
If you’ve already created a budget while drafting your plan, then you’re already on the right track. However, if you don’t have a budget, you will need to create one. First, you should calculate your monthly income and any money you saved away for your trip.
Next, take a look at all of your monthly expenses. Saving up for your dream vacation won’t come easy, and it will require some sacrifice. You won’t be able to cut out your rent or car payment, but you might be able to find optional expenses that can be eliminated for the time being so you can save money for your trip.
If you find you don’t have enough for your vacation yet, you should calculate the time it will take for you to reach your goal. If that timeline seems way too far in the future, consider adding income. Additional income from a side hustle or second job can help you reach your dream vacation goal much sooner, but it also means you’ll have to work more often.
If your current financial situation is comfortable enough for you and adding income would make your life more complicated, then don’t feel like you have to do it. You can always wait until your finances align more with your vacation goals.
We all want to go on a lavish vacation, but sometimes we can only afford to go on a staycation to the local spa. Based on your estimated budget, can you afford to go on the vacation of your dreams, or should you settle for something a little closer to home that’s more affordable?
The decision depends on your current financial situation and what you’re willing to spend for a vacation. Remember, just because you can’t afford to go on vacation now doesn’t mean you can’t go to that destination when your finances are more stable.
No matter what you decide, it’s important to keep your vacation reasonable. If you’ve been saving for a vacation for a long time, you should have a different set of expectations than someone who started planning their vacation last night.
The reason you’re going on a vacation is to get away from it all; you are not going on vacation to become broke.
Whether you’ve been saving for this vacation for months or recently decided it was time to take a break from work, you’ll need some savings. You might even want to set up a special saving account for big purchases like a vacation that’s separate from your everyday savings account. This will allow you to check on the balance and your progress more often, and it will keep you from dipping into your personal savings account that’s used for emergencies.
If you’re old school, you can even begin collecting spare change and bills in a piggy bank so you have two places for finding money to fund your vacation. The main purpose of creating a special savings account is to provide you with an account with one function to stay on top of your goal.
You should aim to put at least a small fraction of each paycheck in your new savings account so you can see how much it grows over time. You can also break out the calculator and do some math to determine how many months it will take for you to reach the estimated amount of money your vacation will cost you.
Even though you have a fairly detailed list of expenses to expect on your trip, you should always bring more than you expect to spend. Make sure your bank account has more than enough money to cover you in the case you end up spending more than you had originally planned on.
Your budget should always remain flexible because you never know how much something will cost until you purchase it. Similarly, you can’t predict when emergencies will happen, so we recommend taking at least a few hundred dollars more than your estimates.
Now that you’ve budgeted out the cost of your dream vacation and know what sacrifices you have to make for this to become a reality, it’s time for you to start saving your money. Make sure you have a detailed plan to follow and stick to it! There’s no reason you can’t afford a quality vacation on a budget. However, be careful with your expectations. Your vacation might not end up as lavish as you want, but you can still enjoy it.
Matt Casadona has a Bachelor of Science in Business Administration, with a concentration in Marketing and a minor in Psychology. Matt is passionate about marketing and business strategy and enjoys San Diego life, traveling, and music.