Vacation Planning That Won’t Break Your Budget

by Andrea Norris-McKnight

Vacation Planning That Won't Break Budget photo

Taking a vacation that you can’t afford won’t provide a lot of rest and relaxation if you’re stressed about how you’ll pay for it after the fact. This year, take these steps to plan a vacation that leaves you refreshed instead of in debt.

Planning a vacation is exciting as you begin to imagine where you’ll go and what you’ll do. If you’ve started a vacation fund for a planned trip, you may feel the thrill of anticipation each time you add to it and get that much closer to your savings goal and your travel date.

But you know what isn’t exciting or thrilling? Paying off a trip you’ve already taken. A credit card balance is not the type of vacation memory you want to have!

So how can you avoid vacation debt and regret? Take these steps to vacation planning that won’t break your budget and figure out where your vacation dollars can afford to take you.

How To Plan a Vacation on a Budget

1. Start a vacation fund and determine how much you can add to it each month.

The very first step in planning any vacation should be to start saving! Estimating how much you’ll be able to save by vacation time will allow you to plan a trip that is reasonably within your budget.

Perhaps you already have a vacation fund and have tucked away a fair amount for your next journey. Good for you! You might be able to afford to travel a few short months from now. But if you’re just starting to save for this year’s trip, you likely won’t be traveling quite so soon.

Take a look at your current budget to determine how much you reasonably can set aside each month. Suppose you can save $100 per month. In five months, you’ll be able to afford a $500 vacation. And that might be plenty for you and your family if you intend to visit relatives or have mastered the art of frugal road-tripping. But if you hope to take a more expensive trip to a more exotic locale, you’ll need to plan several more months out to allow yourself the time to save.

Be realistic when determining how much you think you can save. Some of your vacation may need to be booked and paid for in advance, such as to purchase plane tickets or attraction tickets. You don’t want to begin charging your vacation only to discover you won’t have enough saved to pay for your trip after all. This could result in cancellation fees or, perhaps worse, taking a trip that you really can’t afford.

It may seem backward to determine how much you can afford to spend on a trip before even choosing a vacation destination. But having an honest assessment of how much you can reasonably save (and therefore spend!) and by when will go a long way in helping you plan a trip you can comfortably afford in the time frame that works with your schedule.

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2. Decide when you’d like to (or have to) travel.

Once again, this may seem backward to determine the when before the where, but most of us have jobs and/or children that restrict when we can travel. If you have school-age kids, your travel dates may be limited to spring, summer, and winter breaks. Or perhaps your employer does not allow vacations in November and December.

The benefit of knowing your tentative travel dates is that you can more easily choose an affordable destination. There is no sense in considering a trip to Lake Tahoe in June if you won’t possibly have saved the money for the four plane tickets to get there. But a few-hour drive to go hiking and white water rafting in North Carolina for a week might be well within your budget, including renting a nice mountain-side cabin for your stay.

3. Pick a few possible travel destinations and estimate costs to vacation there.

Most of us have a travel destination or two in mind long before we can start planning a trip, but if you don’t, pick a few possibilities so you can begin estimating costs. Don’t be surprised or disappointed if you find you won’t be able to afford your first or second choice by the time you hope to travel. Keep researching other possibilities and you’re sure to find an equally amazing destination with an even more amazing price tag.

When estimating your vacation costs, be sure to consider all of the following types of expenses:

How much will it cost to get to and from your chosen destination? Will you drive, fly, or take a train? Look up ticket prices or the cost of a rental car (or both) to get a general idea of how much you’ll likely need to spend to get to where you want to go.
Explore lodging options. Will you rent a house or get a hotel? Once again, research current prices in your chosen travel destination to get a better sense of how much you’ll likely need to spend.
Estimate food costs. A family of 4 can easily spend $100 per day if they eat at a restaurant for every meal and snack. And don’t forget to include a few glasses of wine with dinners or daiquiris by the pool if you like to indulge while on vacation.
What types of excursions or tours would you like to do at your chosen locale? Which will require a ticket or fee?
Do you like to bring back a few souvenirs when you travel?
Will you have any expenses back at home while you’re away, such as boarding fees for pets or the hiring of a house sitter?
Be sure to budget a little extra for surprises and unplanned activities, too. You never know when you’ll discover an attraction while on vacation that you just can’t pass up or have to buy everyone bathing suits because you forgot to pack them.

Be as inclusive as you can when estimating your travel costs. It is better to return from your trip to find that you overestimated costs rather than come home way over budget.

Also, spend time reviewing what others have liked and disliked about your chosen locale before making a final choice. Maybe you’ll find it doesn’t sound quite what you’re hoping for or worth what you’d need to spend. You may imagine a trip to Walt Disney World to be as magical as Disney claims, but one family’s week of magic is another’s week of long lines and large crowds. The last thing you want to do is drop big bucks on a disappointing trip, so get in the know before you decide to go.

Once you have a realistic cost estimate for a desired destination, you’ll want to compare that estimate to how much you’ll have in your vacation fund by the time you will be traveling. Are they close? If yes, you can begin finalizing plans when the time comes. But, if it appears costs will far outweigh the amount in your vacation fund by travel time, you’ll have a choice to make. Should you choose a more affordable destination or pick a much later travel date that will allow you more time to save?

4. Choose a final destination based on how far and how soon your budget will take you.

Remember that your goal is to afford your desired vacation by your chosen travel dates.

You may daydream about vacationing on a tropical island but know you cannot afford the beautiful beaches of Hawaii before summer’s end. Yes, a California coastal city would better fit your beach budget, but your heart is set on Oahu. By all means, go to Oahu! Just plan on going the following summer to allow yourself time to save.

If the thought of waiting 12 to 18 months to travel is more than you can stand, perhaps plan a few frugal weekend getaways this year or a super cheap road trip. Spend just enough to scratch that travel itch so you’ll have the willpower to save and wait for that dream vacation.

5. Research ways you can stretch your vacation dollars.

The first four steps in your vacation planning should be about choosing a destination that fits within your budget. This final step can help you come in way under budget!

There are countless articles on the internet that provide tips on frugal travel and reducing vacation costs. Do your homework! You’ll be amazed by how much a little time and research can save you. Here are some tips to get you started:

Regardless of how you travel, do the necessary research to learn how to get the best deals on your desired mode of transportation. You can find plenty of information online for scoring the cheapest airline tickets and the biggest discounts on rental cars.
Unless you’ll be staying with friends or relatives, you’ll likely need to book lodging. Consider if it makes financial sense to rent a house, condo, or hotel suite with a partial or full kitchen. Having the option to avoid restaurants for some, if not most, meals can save you quite a bit.
And if that house or suite has a washer and dryer? You’ll be able to pack lighter, which can help reduce checked baggage fees if flying or allow you to rent a smaller class of car if driving.
If you’ll be traveling domestically, check Groupon, LivingSocial, and other daily deals sites to see if you can get deals on restaurants, activities, or attractions at your chosen destination.

Do you really need to spend money on souvenirs? Unless you discover some one-of-a-kind vacation treasure you just can’t pass up, the photos you return home with will allow you to revisit your trip far better than a t-shirt or fridge magnet.

Taking a vacation that you can’t afford won’t provide a lot of rest and relaxation if you’re stressed about how you’ll pay for it after the fact. So start building up that vacation fund now and figuring out where those vacation dollars will take you this year.

Reviewed January 2024