Planning and budgeting for a vacation can be stressful at first but planning and budgeting can actually take away the anxiety and stress while you are enjoying the vacation because you know what to expect and you are limiting the things that can be surprise expenses.
The first things to do when setting a vacation budget is as follows:
Where are we going?
- International – flights can be more expensive if going international, but many places have cheaper accommodations or food prices.
- Ex: I went on vacation to Guatemala, which was a pricier plane ticket, however, the cost of Uber, food, and drinks were FAR below what we experience in the United States.
- Domestic – This really depends on city to city. Miami, New York, or Los Angeles are going to be more expensive than visiting cities like San Antonio or Kansas City.
What kind of vacation is this?
When I plan for a vacation, I like to ask myself what kind of vacation is this? Are we going to be allocating our budget towards luxury items like the spa, luxurious hotels, and experiences that may be pricey, or are we going to be camping, making our own meals with groceries? Both are amazing but making these decisions early on is crucial when budgeting for the type of vacation you want.
Accommodations
This is usually the priciest part of a vacation. Price varies for each location as well. There are also so many options: Hotels, Airbnb, VRBO, Hostels, or all-inclusive resorts. Splitting rooms with friends can bring down costs, and many times Airbnb options can also be cheaper since you are bringing a big group together and splitting the cost.
Transportation
- Flights: Once you know where you are going, you can book your flights and transportation. You may be able to use credit card points which can save you hundreds of dollars
- If you have a travel credit card, try to make those flight reservations through your credit card travel portals. Many times, they provide 3-5x points per dollar spent.
- Gas: if your vacation is a road trip, you may just need to calculate the gas prices.
- Uber & Lyft – This is always a sneaky expense when it comes to travel! You typically will get an Uber to and from the airport, an Uber to and from dinner, and an Uber to your various excursions or outings while on your vacation. This can easily add up to hundreds of dollars within your vacation budget, so remember to add this cost in – even if you are just averaging costs, it’s an important expense to remember.
Food
One of the best parts of a vacation is experiencing the cuisine! This is also a big part of budgeting for a vacation. Planning out when you will be going out to eat, and which nights you will be staying in and cooking is another great way to budget your expenses on the trip. It’s okay to go out for every meal, but just be realistic with your budget. If you go out for coffee, breakfast, lunch, drinks, and a fun dinner every night; that cost is going to add up… So just be sure to add all of those up per day so you are not surprised.
Recently I booked an all-inclusive resort option in Cabo, Mexico. Although the per-night cost was more than I usually spend on accommodations, I added up the cost of the average breakfast, lunch, dinner, and drinks… and not so shockingly, it was going to save us money in the end!
Surprise expenses!
It is inevitable that surprise expenses will come up. Here are some that often come up that people forget to account for:
- Tips: Especially with traveling, ask your hotel how they tip the staff and if it is included with the bill.
- Ubers
- Airport: Fees at the airport can range from baggage fees to snacks and we all know how expensive things are at the airport. So, plan for these airport expenses.
- Resort Fees
- Parking for Airport/Hotel: Parking fees can creep up quickly, if you are trying to budget your trip see if you can get dropped off and picked up from the airport – if that isn’t an option be sure to check your airport for their long- and short-term parking fees.
- Rental Car
- Public Transportation: If you are traveling to a city where there is easy access to public transportation such as trains or busses, we recommend checking the cost for these things early – sometimes when you book ahead there are discounts, or the city itself may offer a weekly/monthly pass that is cheaper per ride than paying for it as you go.
As you can see there are so many expenses that go into taking a vacation. My favorite way to incorporate all these expenses is a spreadsheet that I can label and categorize. This allows me to estimate as close as I can and get an idea of how much we need to save for this vacation. Here are also a few helpful tools to use:
TripIt – This organizes all the reservations you can through your email. It is so helpful to see all your flights, hotel check-in and checkout times, and other dinner reservations or excursions booked.
Splitwise – This allows you to put all expenses in the app that need to be shared. You can choose what expenses or share with just a few people or maybe they need to be split between everyone.
OutOfOffice – This app allows you to plan your trip but also incorporate your recommendations in that city and see other recommendations.
Important Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Please keep in mind that insurance companies alone determine insurability, and some people may be deemed uninsurable because of health reasons, occupation, and lifestyle choices. Guarantees are based on the claims paying ability of the issuing company.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by Allyson Flournoy.
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