Vacations are a great way to unwind after working hard for several months. You’ll not only be able to recharge, but you’ll also be able to bond with your family and friends.
There is a downside to planning the ultimate vacation, though: all those expenses. Save yourself the shock of finding out how much you actually spent on a vacation. When planning a trip, be sure to set up a vacation budget.
A budget will help in more ways than one. First, it will help you decide what kind of a vacation you can take. Second, it can control overspending. Being conscious of your vacation budget will also motivate you to try new things as alternatives to more expensive activities.
Determine your dream destination and set your target savings amount. Many people set aside money specifically for a vacation. While having a piggy bank for your dream Caribbean cruise is good, why not open a savings account that is dedicated to your travels? You can deposit a set amount each month from your paycheck or set up an automatic recurring transfer from your main account.
Since vacations are supposed to relax you, you don’t want to come home to debt after one. Setting up a vacation budget will allow you to have fun travelling while still considering your long-term financial goals.
It’s good to be aware of why we tend to overspend. When you’re away, it’s easy to overlook impulse purchases. Always remember that small impulse purchases add up. It’s easy to lose track of these small expenses, especially in countries where the currency is higher in value than your home currency. A fifty-cent souvenir may sound cheap at first, but it adds up in your own currency when you buy for everyone in your family.
Setting up Your Budget
Just like how you’d set your household budget, you have to determine your priorities for the vacation. This is important especially if you have limited funds. You may have to choose between flying to your destination and staying at a four-star hotel because you can’t afford to do both.
Typically, a vacation budget will include these expenses:
- Accommodations. From hotels to Airbnb rooms, you now have plenty of choices for your lodging.
- Transportation. People always remember to allocate for the transportation going to their destination, but often fail to include transportation within the area. Renting a car and hailing taxis are more expensive than taking public transportation. But depending on your destination, those might also be better options for you.
- Meals and snacks. You might want to include snacks, especially if your trip involves a lot of activities that will make you hungry mid-afternoon.
- Activities. These include tours, shows, museum trips, and other experiences that you want to try around the area. Start with your ultimate must-do activities. You can add more if your budget will allow it.
- Souvenirs. More likely than not, you’ll want to buy small tokens or even big items as souvenirs. Best to include them in the budget up front.
- Miscellaneous. You can set aside a small budget for unexpected expenses and other purchases that you haven’t planned.
Depending on your priorities and the length of your trip, determine how much you can spend on each type of expense. You may need to do some research on the average cost of goods and services at your destination. Do they expect tips for all services? Are credit cards widely accepted? These will affect your budget, so be sure to research well.
With careful planning before you leave, you ensure that you have a wonderful and memorable vacation without going bankrupt.