Unsurprisingly, everything has gotten more expensive since the COVID-19 pandemic. However, this doesn’t mean you must cancel your summer plans and stay home on the couch watching Netflix.
Regardless of how social media influencers portray it, vacationing does not have to be extravagant and expensive. With a budget, a well-thought-out plan, and determination, anyone can take a summer vacation.
Key Takeaways:
- Using a budget template can help you assess your current financial situation and determine how much you can spend on a vacation.
- Make sure to research where you are vacationing. Failing to research your destination can lead to unexpected surprises and missed opportunities.
- Vacationing on a budget requires thoughtful planning, flexibility, and smart decision-making.
- It’s not about the extravagance of the vacation but the experiences and joy it brings.
Starting Your Summer Vacation Budget
The average American spends $1,578 on a one-week vacation per person. However, you can cut costs and get below the average amount per person with a budget.
Determine your Budget:
Start by sitting down and figuring out how much money you can allocate to your vacation. Ideally, start a few months to a year before your vacation date to maximize your vacation savings. Using a budget template can help you assess your current financial situation and determine how much you can spend on a vacation.
Once you have your summer budget, consider putting your vacation funds into a high-yield savings
account or a certified deposit (CD). Doing this will make your money grow, compounding interest making
your money work for you. With a CD or high-yield savings account, you could earn hundreds in interest,
giving you extra cash for a fun activity or covering one night out.
50/20/30 Budget:
The 50/20/30 budget is designed to help you organize your finances and create a strategy for better spending habits. The budget allocates 50% of your after-tax income toward essentials, 20% toward financial goals, like emergency funds or paying down debt, and 30% toward things you want, like a summer vacation. To help start a 50/20/30 budget, do the following:
Related Article:
Planning a Summer Vacation with a Budget
Picking a Location:
Determining the duration, location, and time of year, you plan to take your vacation are major factors that will play into the cost of your vacation.
Time of year: It’s well-known that traveling during the off-season is the cheapest time to travel, which is why 43% of people tend to travel during the off-season. There can be massive price differences depending on the time of year you plan on traveling. For example, a flight to Hawaii in the off-season is $426 and, in the peak season, is $655. Picking the time, you plan on traveling should be the next step after getting your budget. Traveling at the right time of year can save you lots of money.
Location: Your vacation destination is the second biggest factor to think about when making your vacation budget. Do you plan on leaving your town, state, or country? Depending on where you plan to travel can be the difference of thousands of dollars.
If you plan on staying in Texas, look for the most affordable vacation places: Corpus Christi, Fort Worth, Dallas, San Antonio, Galveston Island, or Austin.
If you are staying in the U.S., consider taking a vacation to the most budget-friendly destination, such as New Orleans, Daytona Beach, Salt Lake City, Albuquerque, and Washington, DC.
If you plan on leaving the country, research the least expensive countries to vacation in, such as Greece, Portugal, Mexico, Costa Rica, Hungary, Indonesia, Turkey, and Laos.
Duration: It should be no surprise that the time you spend on vacation is a big factor in the cost of your vacation. Once you figure out your budget, location, and time of year, add all the daily expenses for a vacation, such as hotel stay, food, entertainment, gas, and transportation. Doing this will give you an idea of how much the trip will cost you per day. Take that number and add it up to find out how long you can afford to be on vacation.
Research Costs:
Hotels, rental cars, and flights are three of the biggest vacation expenses. Use travel sites to be able to compare multiple options all at once for affordable vacation options.
Flight tracking apps can help you find the cheapest flights to your location. Remember that it is 12% cheaper to fly on Monday, Tuesday, and Wednesday when picking your flights. Flights are typically the most affordable 30 to 45 days before a trip.
Adjust Your Plans If Necessary:
If the estimated costs exceed your budget, consider adjusting. Look for more affordable accommodations, explore alternative transportation options, or prioritize activities and attractions that fit within your budget.
Vacation Don’ts
It might be tempting to pay for a vacation using a loan or credit card, but this will cost you more money in the long run. Most credit cards charge interest rates well over 10%. The average annual percentage rate (APR) for a credit card in 2023 is 20.92%. Having to pay interest on your vacation could cost you hundreds, equal to the cost of a flight to Hawaii in the off-season.
Make sure to research where you are vacationing. Failing to research your destination can lead to unexpected surprises and missed opportunities. Research local customs, culture, weather, visa requirements, safety considerations, and popular attractions to make informed decisions.
Skipping out on travel insurance might seem like a good way to save money, but it comes with serious risks. Travel insurance covers unforeseen events such as trip cancellations, medical emergencies, or lost luggage. Without travel insurance, it could cost you more than your vacation cost.
Tips to Help Save Money
- Use price comparison websites: Take advantage of websites that compare prices for flights, accommodations, and rental cars. This can help you find the best deals available.
- Consider alternative accommodation: Instead of staying in a hotel, consider budget-friendly options such as hostels, vacation rentals, or camping. Bed and Breakfast (BNB) websites can offer more affordable alternatives.
- Travel with a group: If traveling with friends or family, consider sharing accommodation and splitting the costs. Group discounts may also be available for activities or tours.
- Avoid unnecessary expenses: Be mindful of costs that can quickly add up, such as airport parking fees, baggage fees, or pricey souvenirs. Prioritize your spending on experiences rather than material items.
Bottom Line
Vacationing on a budget is feasible and an opportunity to create lasting memories without breaking the bank. With careful planning and determination, anyone can enjoy a well-deserved summer vacation.
Picking the right location and timing is cost-saving. Traveling during the off-season can result in savings, and choosing affordable domestic and international destinations can help stretch your budget further.
Vacationing on a budget requires thoughtful planning, flexibility, and smart decision-making. Remember, it’s not about the extravagance of the vacation but the experiences and joy it brings. For more personal finance articles, visit our website, Personal Finance Archives – Texas Regional Bank.
