Vacation Budgeting
A Vacation with Good Memories instead of Debt!

Americans planned to take 4 summer trips in 2005. And, according to a Travel Industry Survey, on their longest trip, they planned to spend an average of $1000. Everyone needs a break now and then, but when your vacation leaves you with a stack of bills you can’t pay, it’s hardly relaxing! Next time, plan a vacation that will leave you with good memories instead of debt. Use our roadmap to plan a vacation that won’t break your budget, or just take a last minute trip that doesn’t include visiting the parents.

What do you really want?

First, decide what kind of vacation you want? Do you want to sightsee? Or do you want to do as little as possible? Take some time and really think about things, or you’ll end up with a vacation you don’t really enjoy. If you have a family, ask them for input and work ahead of time to find a way so everyone gets at least a little of what they want. Does everyone want to spend time in quiet solitude, or participate in lots of sports or activities? Narrowing your interests will focus your search. For example, if you are not a gambler, there’s not much point in going to Las Vegas.

Plan for Savings

Plan in advance so you’ll have time to save money for your trip. The better you plan your budget, the better your vacation. You’ll find many vacation planning worksheets online that are very helpful. You can use them to develop your vacation spending plans. If you have children, make sure they have an opportunity to participate in the planning. Together, you can research destinations and costs. You can set target goals for the amount you would like to spend per day for specific activities or for your whole trip. Kids may help look for discount coupons, Internet specials, or even in weighing the costs of one type of outing over another.

Once you have a clear idea of what you plan to spend, start a vacation savings fund, and set aside a certain amount each month or each pay period. Even a small amount can go a long way if you plan carefully.

Consider off-peak travel if possible. Go to a popular winter destination in the summer, or vice versa. If your schedule allows it, avoid traveling during school breaks or holidays. Not only will you likely save money, but your destination will be less crowded and you’ll likely get better service and accommodations.

Shopping is the most domestic trip activity and is included in 30 percent of all trips. In total, that accounts for 342 million trips with shopping sprees. (www.tia.org)

If shopping is your idea of recreation, create a separate shopping budget and research the types of stores and items you’re hoping to find ahead of time. Otherwise, your “bargains” may end of being very expensive once you figure in the other costs of your trip.

Lodging

Shop online for discount accommodations, but don’t stop there. Call the hotel or resort directly to ask about discounts. Some websites offer discounts that you will not be able to get elsewhere, but be careful for offers that are “too good to be true.” Check their refund policy in case you are not satisfied. Only deal with companies that are reputable and have secure websites.

A suite-type hotel or vacation condo that includes a kitchen may prove to be a money saver if you prepare some of your own meals instead of eating out. It can be a real bargain for families with children.

Air Travel

If you have frequent flier miles, figure out whether it is worth it to cash them in for ticket. A frequent flier mile is said to be worth about 1-2 cents, so you do the math. Most programs require you use 25,000 miles for a basic RESTRICTED ticket, which can be worth up to $500, so you may be better off buying a ticket for a cheaper route and saving the miles for a more expensive one. However, restrictions and fewer seats for reward miles are making it more and more difficult to use your miles on some airlines, so in some cases it is better to just cash them in when you can.

Keep in mind that some airlines, like Southwest, only allow you to search fares and book tickets directly on their websites. One way to find cheaper tickets is to go to the website of the airport you plan to depart from and look at their list of airlines to see if there are other discount airlines that may offer a better deal.

Rental Cars

If you must rent a car in your destination, shop carefully. A low rate of $19 a day, for example, can easily end of costing $50 or more a day, so make sure you talk to each rental company and get all the details. Here are some other money saving tips:

Decide which size car you really need and don’t pay for a more expensive one. An upgrade of “just a few dollars a day” will add up quickly—and you will likely spend more in fuel with a larger car.

Be sure to ask about taxes and fees when shopping for an auto rental. These add significantly to the cost. Also ask about airport fees, and whether a fee will be charged if you have a second driver. Don’t allow anyone else to drive the car (including your spouse) unless you clear it with the rental agency.

Check with your auto insurance agency ahead of time to find out what coverage you have when you rent a car, so you can decide if you need to purchase any additional insurance. Check your credit cards, since many of them also offer a collision damage waiver that will cover the deductible if you use that card to pay for the vehicle.

Consider fuel costs carefully these days. Some rental places will encourage you to purchase a tank of fuel ahead of time at a discounted cost. But you will pay for any fuel you don’t use. Similarly, if you don’t buy fuel in advance and return the car without a full tank, you’ll pay a hefty price for the rental company to refill the car. Plan accordingly and ask about gas stations closest to the return area. Another tip: Make sure the tank is full before you take the car.

Traveler’s Beware! Too good to be true deals may be just that! Always check the companies you don’t know, and use your credit card to make the reservation for additional protection. Get their refund or cancellation policy in writing, and consider buying travel insurance for extra protection. Restrictions apply to travel insurance policies, so read the fine print.

More Money-Saving Tips

If you are traveling overseas, call your credit card companies in advance to find out what fees they charge for overseas purchases. While a 1% fee for overseas purchases is common, some issuers will charge as much as 4%.

Give your kids an allowance for souvenirs, snacks, etc and tell them they’ll have to stick to it.

If you’ll be staying in a U.S. city for several days or more, buy an entertainment book for that city at www.entertainment.com . You’ll get a whole book full of discount coupons for restaurants, entertainment, and more.

Don’t forget to budget gratuities. Examples include hotel housekeepers ($2-5/day), bellmen ($5-10 for delivering luggage to room), airport skycaps ($1/bag), cab drivers (15%), wait staff (15-20%), tour guides ($1-$2/day). Tipping on cruises can really add up, so plan ahead! Visit www.tipping.org for guidelines.

Get a cheap long distance phone card before you travel and use it! Avoid hotel phones, which can charge outrageous long distance rates. If you will be using your cell phone when you travel, find out whether roaming charges will apply. If you plan to go online at the hotel or on a cruise ship, make sure you understand what it will cost.

Just remember, vacationing can be fun and won’t break anyone when budgeted correctly. So have a blast, but remember to plan ahead and do your research.

Vacation Spending Planner