How To Budget For Vacations

How to budget for vacations

As cabin fever starts to build after a year of shutdowns and shut-ins, More and more people are beginning to plan how to pay for their next vacations. In the next 12 months, the travel industry will begin to recover and more and more countries start to open up.

But for most, the biggest question is not Where to go? but Where are they going to get the money for the next vacation? Learning how to budget for vacations takes a little time and effort, but the following steps should help you.

Step 1.Estimating how much is it going to cost

The first step in learning how to budget for vacations is working out exactly how much money you need. Estimating and allowing for any costs you my encounter along the way not only gives you peace of mind but also helps you be prepared. Doing this could mean the difference between accumulating unwanted debt aorre being fully prepared for any unexpected charges. Some common vacation expenses will include, 

• Transportation costs including: airfare, car rental, train tickets
• Accommodation costs – Airbnb, hostels Lodging: hotel
• Eating costs – groceries, planned meals out
• Extracurricular costs: attraction tickets, tours, souvenirs
• Miscellaneous costs – unexpected fees, security deposits, rental car insurance, 

Step 2.Start a savings plan

Once you’ve estimated the cost of your vacation the next step is to start a basic savings plan. If you try to come up with the whole cost of a big trip in one move it may seem impossible. However, if you break it down over a longer period of time, planning and learning how to save for a vacation is much more straightforward.

For example, if you think your vacation is going to cost you $6,000 and you want to go in 10 months’ time, it’s a matter of saving $600 a month for the next 10 months.

How to make saving easier?

Stretch your timeline a little

If you’re looking to save for a vacation that’s going to cost $6,000, but you can’t manage to save $600 a month but maybe $400 a month is more achievable why not just push your vacation back by 3 or 4 months. This seems to give you much more time to save

Trim the costs

Now that you planned your dream vacation and estimated how it’s going to cost experts advise you that you should try to reduce this by 10% to 20%, by trimming some major expenses. For example car rental is a massive expense when traveling. Why not base yourself in a location that has excellent transport and this will reduce the need for renting a car all together.

Set up an account for savings

Talk to your financial institution about setting up an automated savings account, this doesn’t have to be pay interest it just means that the start of each month the money you intend to set aside for your vacation budget is automatically taken out of your account, and you don’t have to worry about saving it at the end of the month

Smart use of credit cards

One of the easiest ways to reduce the costs of vacations is to smartly use credit cards. Many of them will offer you a significant welcome packages providing points that can be redeemed in a variety of different ways such as savings and tours, hotels and flights. Once you can clear your credit card balance at the end of every month, these points can quickly clock up over the space of the next 12 months helping you budget for your vacation. 

Reduce household expenses

One of the keys to budgeting for a vacation is reducing your household expenses. Stop eating out and start cooking at home, instead of paying for cable, why not get a cheaper Netflix account. There are a wide variety of ways to reduce your household overheads. Another way to save money is the shop online using specific shopping portals, some of these would even offer you cash back or even miles or points on certain purchases.

Final thoughts

Dream vacations can quickly become very expensive, so remaining realistic about your budget and automating your savings, as well as reducing your daily, weekly and monthly expenses, will ensure that saving and budgeting for your next vacation isn’t as difficult, especially as you master the art of how to budget for vacations.