If you’re thinking about a getaway this summer, you’re not alone. A survey from vacation rental brand Vacasa showed that 63% of respondents planned to take a summer vacation in 2022.
After spending so much time working and taking care of personal and family responsibilities, it’s nice to take a break. For most, the preferred way to take this break is by visiting fun or exciting destinations away from home.
While vacations are a great way to get a break and have shown health and productivity-related benefits, travel can quickly get expensive. Whether you’re taking a long weekend trip to the next state over or spending several weeks out of the country, the expenses can pile up. Lack of saving and overspending on trips can lead to debt and put you behind on other financial goals.
Luckily, you can take your well-deserved vacation without accumulating a huge credit card bill or emptying your life savings with some smart saving and budgeting techniques. Keep reading to learn more about the cost of a trip and budgeting for a vacation.
The Cost of a Trip: Why Are Vacations So Expensive?
You’ve probably heard horror stories from friends or family about how they came home from a vacation with significant debt that took years to pay off. While you probably don’t plan to rack up that much debt during your trip, it can be easy to overspend. Large travel expenses can take the shine out of the shoreline if you aren’t prepared.
In order to get a handle on the cost of travel from transportation to food to lodging, this survey took the average costs per day and organized them from largest to smallest:
- Transportation – On average, transportation is the largest percentage of vacation spending. Whether you’re flying, renting a car or driving your own vehicle, the cost of getting there is significant to the overall budget.
- Lodging – Behind transportation, lodging is another large expense, as hotels, resorts and other rental options are required for every night you spend away from home.
- Food – Dining costs are higher while on vacation than when you’re at home. This is usually due to the lack of a food preparation area like a kitchen or kitchenette, which forces you to rely on restaurants or other convenience meals.
- Entertainment – Entertainment can be anything from a guided tour to seeing a professional sports game. “Seeing the sights” can vary in cost but is usually considered the final major spending category for a vacation.
While the final bill will differ depending on where you go and your vacationing habits, these four areas can stack up the costs.
Budgeting for a Vacation: Our Top Tips
Whether you’re looking for a quick getaway or want to plan a multi-week vacation for the whole family, you can find ways to save up money, organize your funds and avoid overspending regardless of your timeframe or vacation’s scope.
The bigger the trip, the more pre-planning you will have to do to meet your vacation budget. Here are seven of our top tips to help you save for your travels.
1. Review your current financial situation.
While this may seem obvious, you need to understand your current finances to decide where you can and can’t afford to travel. If you’re paying off significant debt or lack a healthy savings fund, you may want to scale back your plans to a nearby road trip destination. A quick look at your online bank statement can be the first step of your budgeting plan.
2. Prioritize your travel goals.
Once you have a clear starting point, you can move on to organizing what you want to get out of your trip. Ask yourself questions like:
- What amenities do I need to have with my lodging? Which ones can I live without? How long does my trip have to be?
- How can I get to my destination? Is it possible for me to drive there, or is flying a must?
- How many meals do I want to eat out? Can I prepare meals to save on food costs?
- What are the must-see sites of my destination? What activities do I want to participate in while I’m on vacation?
While some options will inevitably cost more than others, you can prioritize what’s most important to you and make a budget based on your list.
3. Start saving early and often.
The sooner you start saving, the easier saving will become. If you can start an annual vacation budget, that’s a great habit sure to lend to frequent getaways. If you are planning to travel soon, look for ways you can reduce your daily spending now. A great place to start saving is by opening a savings account with a local bank that can help you set aside money for big purchases, like trips.
4. Avoid overspending with a percentage-based budget.
If you’re not sure how much vacation you can afford, start by setting aside a percentage of your monthly salary for your trip. If you follow the basic 50/30/20 budget rule, you can earmark part of the 30% for discretionary spending toward your vacation.
Once you determine what percentage of your income you can set aside for a trip, you can multiply that by the number of pay periods you have before your trip. Voila! You have your set vacation spending amount. From there, you can build your trip around your budget.
5. Research and keep an eye out for deals.
Once you’ve determined how much you can spend, it’s a great idea to scout online for deals on vacation destinations so you can get the most for your money. See if you can find packaged deals on activities and lodging. Airline and hotel pricing can fluctuate, so it’s a great idea to check multiple travel sites to find the best deals.
6. Look for areas to reduce your vacationing costs.
Once you’ve found your destination and created your list of priorities, you can begin to shave costs in the areas that rank lower on your list. For example, if you’re taking a trip to enjoy the natural beauty of the area and don’t care as much about the local cuisine, plan on making a few of your own meals. Have a family member or close friend in the area? See if you can reduce your lodging costs by staying with them for a night or two.
No matter how small it seems, the savings can add up quickly so don’t rule anything out!
7. Save up for your vacation with an excellent savings account from a local bank.
Now that you have a vacation savings plan, you need a savings account with an excellent local bank that offers competitive rates and services and makes managing your finances easy.
If you haven’t found the perfect bank to help you accomplish your financial goals, visit Community Point Bank. We have three convenient locations, all staffed with knowledgeable and friendly team members ready to help you.
Go to our contact page for more information.