5 STEPS TO SETTING UP A VACATION BUDGET

Ready for your next trip? Covid-19 has us all itching to get out of the house. With a little extra spending money in our pockets (hopefully), and a lot of free time. Let’s talk about where you want to go on your next vaca. 

 

Here are 5 steps to help you plan and manage your next vacation budget

STEP 1: Where do you want to go?

Knowing is half the battle! Hitting Hawaii during the rainy season wouldn’t be fun. Neither would hitting Vale in summer, if you planned to hit the slopes. Planning your vacation based on destination and time of year will help you set the stage for success with your budget. 

STEP 2: Research Research Research

Road Trip!  

  

Look at gas prices, mileage to destination and back. Consider vehicle depreciation and adding on miles. Also, check to see if you need to get your car serviced before you go. Account for everything so nothing is a surprise! 

If you are flying, how are you going to get around when you get to your destination?  Rental car, rideshare, or Uber? Compare your costs and see what makes sense based on what you are doing. 

 If you end up in Las Vegas on the strip for a weekend, chances are a taxi is your best bet since the cost to rent and park a car is much higher than using taxis to get around.  Pay attention to the cheapest way to get around, none of us want to pay a ton for transportation. We want to use that money for activities and good food!

 

Activities

When you get to your location, what are you planning on doing? Do you need money for events or activities? Prior reservations or tickets? This is where you really want to plan your trip and account for the money you need to do all the things your vaca calls for. 

 

Spending Money

Last but not least. How much spending money do you want for your trip? Depending on where you are going and what you are doing, you may need some cash in your pocket. Prepare for this and account for what your vaca looks like. If you need spending money on your trip, plan for it.

 

 

 

STEP 3: Plan Your Vacation and Review the Cost

Now you have your time of year and location. Time to plan the actual length of your vacation and how much you plan on spending based on your research. 

 

Let’s give an example on a vacation for 5 days, a group of 4 headed to Disneyland:

 Flight: $1400 -- 350/person - 4 people

Airbnb - $750 for 5 days

Rental car-  $225 for 5 days

Food/Drink - $1,750 for 5 days 

Park Tickets: $1,750 - 5 day hopper + max pass

Spending money : $500

Total vacation cost: $6,375

Now, this could be a trip for a family of 4, where the family would need to save the full budget, or this could also be 4 friends headed down to Disney splitting the cost equally at 25% share per person.

 

 

STEP 4: Setup your target savings goal based on your research

Now you have an idea of the cost, it’s time to start budgeting for it!  Add your trip as a line item on your budget and include a manageable savings goal monthly. 

If you are the family of 4 from above and you are trying to take your vacation in 8 months. Let’s look at how this might work. Our family has about $1375 saved which means they still have $4000 needed for this vacation. 

They’d need to save $500/month for the next 8 months in order to meet their trip goals.

$4000  / 8 = $500 

Now, let's flip to our group of friends. If they are splitting the cost equally between all 4 parties, each person would need to save their portion of the cost.

It might look something like this:

$6,375 / 4 = $1,593.75/person With 8 months for each person to save their portion, they’d need to add a line item on their budget for $199.22/month to save enough for the trip.

$1,593.75 / 8 = $199.22/month 

As you can see, it depends on what you are doing, who is going, and how you want to pay for it!

 

 

STEP 5: Get out and enjoy yourself!

Get up and get out the door--vacation time is here! You’ve saved the funds and now you can enjoy yourself stress free because this trip is planned and paid.

Remember, this is just one example! There are millions of ways to do a vacation--some more expensive than others. Factor in what you want to do, how you are going to get there, and how much you need to enjoy yourself while you are traveling. 

 

For more information about setting up a budget take a look at our most recent articles:

 The Basics of Starting a Personal Monthly Budget

6 steps to setting up your personal monthly budget