By Eric on July 19, 2011 3

How to Vacation on a Budget

When we created our first budget, vacation did not make the cut as a line item. And the first time we had to plan for a small weekend getaway for a friend’s wedding, we were stressed out. We planned the best we knew how, but throughout the entire weekend we were so concerned about our money situation that we could hardly have fun! We have learned a lot since then and want to share with you the knowledge that we’ve gained over the past few years about putting together a vacation budget.

vacation budget

First, I want to clear the air and share some thoughts about vacation. Vacation should be a fun, stress-free getaway from daily life: a time when you can relax and rejuvenate your mind, body and soul so that you can return refreshed. So when you start to think about money as it relates to vacation, this usually adds panic to the equation, but it doesn’t have to.

Here’s what we do when planning vacations:

  1. Establish a rough plan early: At the beginning of the year, we try to gauge what vacations we will be taking. We love deciding how we’re going to spend our vacation days. In the past, we’ve spent a week in Okoboji every summer, so that is easy to predict. And, we have made staycations an annual tradition to enjoy our city on a budget! Once we know what we will be doing, we can set a rough budget goal to start saving.
  2. Save money: If you like to take vacations, don’t feel guilty about it. Instead, plan for them. Start saving money early. The earlier you start saving, the less you need to save each month, and the less stress it puts on your budget. It’s much easier to save $30 a month for year than it is to come up with $360 the week before you leave on a short trip.
  3. Research: If you are doing something new or going somewhere for the first time, spend a lot of time finding the best rates for lodging, eating and entertainment. Search for deals or coupons that can help lower the costs.

How we stay stress free on vacation:

  1. We pad our budget: We’ve known since our honeymoon financial disaster that we like to shop when we are on vacation. On vacation we usually have access to shops we don’t get to very often and we both like to purchase clothes (ahem, Kelsey is a fashion blogger). We always give ourselves a clothing allowance when on vacation. It’s important to figure out what you like to do on vacation when making a realistic financial plan that will work for you.
  2. We ration out our money: Once we set our vacation budget for a specific trip and have it saved, we get it in cash. This in and of itself stresses me out. What if I lose my wallet on the first day and all of our cash is gone? So, we divide up the money in a few different places so we don’t have all of our eggs in one basket. We keep most of the cash hidden in a safe place where we are staying. We aren’t too worried when we are staying in a house with friends, but in a hotel we will use a safe if the room has one. Then we take out a portion for each day’s activities. Plus, it would be too easy to spend it all if we had it in our pockets. ;)
  3. We try to be realistic: The first few times we budgeted our vacations, we came up short and were disappointed that we didn’t have the money to do things we really wanted to do. Committed to staying out of debt and not letting our vacation follow us home financially, we have started to think more about the possibilities while we were on vacation and budget them in. All this with the mindset that we don’t have to spend all of the money, but it’s there if something comes up. Think of it as a blow category for your vacation budget.

We used many of these thoughts when planning our last vacation to Charleston, S.C. It worked out beautifully and we came home with $130 left over. We can now apply that money to our next vacation, which is coming up next week!! Yay!

What types of hurdles do you face when planning a vacation?


Husband to Kelsey. Father to Rooney. Follower of Jesus. Born and raised in Iowa. I like blogging. Bulleted lists excite me. Thanks for stopping by.

  1. Awesome post! I’m still trying to figure out how I budget flights for conferences and things, when I eventually do get reimbursed, it just takes a few months to happen! I found the AceBudget app on the iPhone and have found it reallyyy helpful to keep track of purchases (I can rarely remember a receipt, but I always have my phone on me). I can’t tell you how many purchases were stopped just because I didn’t want to have to put down the purchase in my phone! I think it was like $2 but well worth it in my opinion, and you can set different budgets to roll over any unused portions each month (for example, I put away a certain amount of money for basic car maintenance, which I only use every 3 months).

  2. I think our biggest budget buster on vacation (and at home) is eating out. It would be a good idea to figure out where we plan on dining ahead of time to figure out menu prices. But part of the fun of vacation is discovering new places and trying new things. You never know if you’re going to spend more or less time doing something, which changes the timing or location of meals.

    On the flip side, we had a positive budget surprise a little while ago. We were planning on using hotel points to pay for our hotel room (I accumulated a bunch through work), but would have to pay for parking since the hotel was downtown. Much to our surprise during check-in, parking was free! So we had some extra wiggle room in our budget.

    • Totally Agree Cathy. Being spontaneous on vacation is half the fun. We have learned to add in some extra money for things like that. So, we usually budget $30 per meal for the 2 of us. If we eat at a sit down place, we should be right on, if we eat fast food, we should have a lot left over, maybe for ice cream later that day!!!

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