How to Budget for a Vacation: The Ultimate Guide
When it comes time to budget for a vacation, starting is often the hardest part. With so many decisions to make regarding destinations, transport, timing and prices, you might feel overwhelmed quickly. Nevertheless, establishing a sound travel budget is the surest ticket to booking your dream trip—and actually enjoying it.
Here are some steps to help get your vacation savings off the ground. You'll also find a few tips to help you save on vacation expenses and make the most of your money while you travel.
Set a vacation budget
When budgeting for vacation, you'll need to get an idea of how much your trip will cost. As you're making your budget, don't forget to include expenses for everyone who's traveling with you. Here are some common average expenses to consider.
- Airfare: For flights within the US, the average plane ticket costs about $314. International flights typically cost several hundred dollars more. Also remember to budget for airline fees. For example, baggage fees can start as low as $30 but may grow to the hundreds if you're checking multiple pieces.
- Lodging: In the US, the average rate for a hotel room per night is about $133.
- Transportation: You can expect to pay an average of $99 per day for a rental car on a domestic trip.
- Food: Dining out will set you back an average of $60 per day for each adult. If you have access to a refrigerator or kitchenette, you might be able to save by stocking up at a local grocery store.
- Entertainment: On average, travelers spend $52 on entertainment for a 4-night trip within the US, or $293 for a 12-night international vacation.
- ATM fees: The cost of getting cash can add up, especially if you're traveling internationally. You'll likely be charged $2 to $5 per withdrawal in a foreign country, and you may have to pay a currency exchange fee of about 3%.
- Passports: Fees depend on your age and whether you already have a passport. As an example, an adult applying for the first time will need to pay a $130 application fee and a $35 acceptance fee for a passport book.
- TSA PreCheck or Global Entry: To save time at the airport, you may want to spend $85 on TSA PreCheck status for domestic travel or $100 on Global Entry status for international travel.
- Pet sitting or babysitting: In the US, the hourly rate for a babysitter is just under $18. Pet care costs vary depending on the type of pet, but kennels that board dogs typically charge about $20 to $50 per night.
Leverage online tools
A variety of savings strategies and digital services can help you grow your vacation savings and lock in budget-friendly travel plans.
- Use automatic transfers or direct deposit. Set up a recurring transfer from your checking account to your vacation savings every payday. You could also set up a split direct deposit so a portion of your paycheck goes directly into your savings before ever hitting your checking account.
- Explore digital savings tools.There are many apps available that link to your checking account and use unique algorithms to help you save. With so many to choose from, select one with features that protect you from potentially overdrawing on your account—automation is meant to bring you peace of mind, after all.
- Keep an eye out for deals. Sign up for notifications or download apps like Kiwi, Kayak or Skyscanner to get alerts on affordable airfare—and perhaps a discount on a hotel or car rental.
- Snag coupons for food and experiences. Groupon, LivingSocial and other coupon sites offer steep discounts on restaurant bookings and local attractions. With deals on everything from wine tastings to laser tag, they can help you plan an activity-packed vacation without going over your budget.
- Buy a pass. Apps like CityPASS will give you admission to several museums and experiences in exchange for an upfront fee. If you want to visit multiple attractions in a single city, a pass will often cost less than paying for tickets at each destination.
Save on vacation expenses
Creating a budget for a vacation is more than just putting money away. It's about finding savvy ways to save on every aspect of your vacation.
- Be flexible. If your travel dates are flexible, you're in a prime position to save on airfare and accommodations. You can also research peak travel seasons for your favorite destinations and plan trips just before or after these dates to save money. Pair this with some extra effort to hunt for discounts on events, amusement park tickets, museum entries and excursions, and you might considerably reduce your total spending.
- Consider sleeping options. You might find that a vacation rental costs less than a typical hotel. Vacation rentals can also help you save on things like morning coffee and dinners out.
- Use public transit. If you're traveling abroad or to a major US city, don't be shy about exploring public transportation. You could save hundreds on rideshares, taxi fares and car rentals. In Europe, for example, trains are an inexpensive, clean and comfortable way to get around.
- Start saving several months ahead. Gradual saving takes the pain out of putting away big chunks of cash a few times a year. You'll be left with a well-funded travel account when you're ready to hit the road.
- Tap into credit card rewards. If you pay for purchases with a travel rewards card, you might earn airline miles, hotel loyalty points or cash back that you can use to fund your next trip.
- Prepare for surprises. You don't want to be caught off guard—and forced to use expensive payment methods like cash advances—if something goes wrong on your trip. Set up an emergency fund that you can use to pay for things in a pinch, and consider buying travel insurance so you'll be compensated if unexpected events mess with your itinerary.
With these steps, you can put your vacation savings plan into action. When you make the most of what you save, it'll be that much easier to make every detail of your dream vacation a reality.
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This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.
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