Vacationing together can help you unwind, reset sometimes tense parent-child relationships, and strengthen family bonds. And more Americans seem to be remembering that.

From the late 90s until 2014, the number of vacation days Americans took annually dropped precipitously. But it’s on its way up again, with the average for 2017 at about 17 days per year. And that’s great for families and businesses alike.

Of course, actually taking that vacation isn’t just about the number of PTO days you have at your job. It’s also about budgeting for travel, which can quickly get expensive, especially if you’re traveling with kids.

Can You Afford Not to Take a Vacation?

In our family, we have decided to prioritize taking vacation time together, even if it’s nothing fancy. Sometimes, a big vacation just doesn’t fit into the budget. If you’re barely making ends meet each month, planning a big trip complete with airline travel and hotel stays is probably not a good idea.

Unfortunately, a good chunk of Americans are doing just that. In 2017, 74% of people in one survey said they’d gone into debt to pay for a vacation. Yikes!

We definitely don’t recommend that, but we also don’t recommend never taking a vacation. Taking some time off can help you come back to your work and life with fresh energy and ideas. And that could ultimately be good for your long-term bottom line.

Still, if you cant follow the rest of the steps in this article so that you can budget for and take a completely debt-free vacation, here are some options to consider:

  • Try a staycation: Staying at home can save you a ton of money, and you can probably find lots of free or cheap things to do in your own city. Sometimes just exploring your home town with the eyes of a tourist can be really fun. Just be sure you make a plan to get out and about to make this type of vacation truly worthwhile.
  • Stay with family: We’re fortunate to have family members in far-flung locations, so many of our vacations have been to see parents or other family members. If you have a great relationship, it’s a fun way to keep that relationship going, stay somewhere for free or really cheap, and maybe even get an evening or two of free babysitting.
  • Go camping: This can be a super cheap way to vacation, especially if you already have camping gear or know someone who does. If you can find a cheap campsite, your only costs could be food, which you have to buy anyway, and the cost of driving to the campground.

These options are great if you have a couple of hundred dollars or less for your vacation. But if you want to go somewhere a bit more spendy, take our advice on building, saving for, and sticking to a budget for your vacation. That way, you can come back from vacation with great memories and without extra credit card debt!

Budgeting For Your Vacation

Budgeting and vacation might seem like opposites. One says stuffy and boring and the other says fun and carefree. But the reality is that a vacation budget can help you get to your dream destinations and truly enjoy yourself while you’re there. If you arent worried about overdrawing your checking account or taking on unnecessary debt, you’ll be freer to enjoy your family vacation. Here’s how:

1. Set a Maximum Budget

You’d think you’d want to plan your budget based on your location, but actually the opposite is true. Some places are just much more expensive to get to and stay in than others. So if you begin with your maximum budget, you can narrow down your list of destinations pretty easily.

Of course, it’s often an option to stay somewhere that’s generally expensive for a very low budget if you know how to find the right deals. But this can take a lot of time and know-how. If you’re new to planning and budgeting for a vacation, you’re better off starting with your budget and then planning the details.

How do you set this number, exactly? You’ve got a couple of options:

  • Based on your monthly budget: How much can you carve out of your budget on a monthly basis to save for a vacation? Multiply that figure by the number of months between now and when you want to take your vacation, and you’ve got your maximum budget.
  • Based on your annual income: If you’re in a pretty good place financially, you may be budgeting annually rather than on a monthly basis. In this case, decide what percentage of your annual income you want to devote to a vacation, and set that as your maximum budget.

Remember to account for multiple vacations during the year if you’re planning to take more than one! You might set an annual vacation budget, and then break it down into two or three smaller trips, depending on your schedule and preferences.

2. Pick a Destination

It can be tempting to sign up for cheap airfare sites and just let the cheap airfare lead you where it may. But this is a mistake, most of the time. For one, you may feel compelled to pay for airfare before you have money saved up for it just because there’s a great deal. And for another, you may wind up in a destination with cheap airfare and really expensive hotels.

The best option here is to check out travel planning sites like BootsNAll, or simply Google best vacations under [insert your budget here]. This can be a great way to get ideas for budget-friendly trips that look interesting to you. Just be sure you account for travel fees to get to the location based on where you live. An east coast vacation spot might be cheap to stay in, but if you’re in California, it won’t be cheap to get to!

2. Plan For The Big Expenses

Once you select a destination, get a rough idea of the types of transportation and accommodation costs you can expect. You can search for vacation packages from Travelocity or Costco Travel. These will help you get a general idea of what you want from your vacation. Get a feel for how much you can expect to spend on flights, lodging, and transportation.

If you’re game for a less traditional route, particularly for accommodations, check out options like HomeAway or Airbnb. And keep in mind that paying a little more for accommodations that have kitchen facilities may make sense. You may be able to significantly cut costs by fixing many of your meals at your home-base, rather than eating out.

Essentially, the big expenses will include:

  • Travel to and from your destination
  • Accommodations, whether in a hotel, resort, guest home, etc.
  • Potentially transportation within your destination if you plan to rent a vehicle

3. Add The Little Things

Once you’ve written down the approximate costs of your major vacation expenses, take the time to look at all the smaller things you’ll need to spend money on. This could include, but isn’t necessarily limited to:

  • Meals, both prepared on-site and dining out
  • Special gear
  • Public transportation
  • Administrative costs (passports, visas, etc.)
  • Entertainment (tickets to attractions, shows, etc.)
  • Gifts/souvenirs
  • Pet/home sitting while you’re gone

When you’re writing down these expenses, be reasonable about what things should actually cost. It’s better to over-plan than under-plan, so that you can go out to eat a few extra times when you don’t feel like cooking or allow your kids to buy souvenirs from their favorite shop. And be sure to write in a little extra money for miscellaneous expenses that will almost certainly crop up on your vacation.

4. Vacation budget planner

To see your vacation budget all in one place, use our free Vacation Budget spreadsheet. You’ll just need to save a copy of the spreadsheet, enter your own values, and you’ll get your overall vacation budget right in your hands.

5. Figure Out How Much to Actually Save

Some of your vacation expenses should actually cross over with your regular monthly expenses. For instance, if you spend $200 a week on groceries and are going on vacation for a week, you can count $200 of your typical monthly budget towards your vacation spending. And if you have a monthly entertainment budget, you could devote some of that budget towards your vacation, as well.

If you’d prefer, you can subtract these crossover amounts from your vacation savings total, and then you’ll get the actual amount you need to save for your vacation.

Saving For Your Vacation

Now you have to figure out how to actually save up money for your vacation. First, you’ll need to set your timeline and monthly savings goal. Then, you have a couple of options for actually saving up.

Setting Your Timeline and Monthly Goal

Now that you’ve got a budget and, presumably, a vacation date, figure out how much you need to save each month to get there. If you’re taking a $3,000 vacation, that’s $250 a month over the course of a year, for example. One thing to note is that you may want to frontload some of your savings, if possible, so that you have funding well ahead of time for booking accommodations and travel tickets.

If you cant frontload your account any, then you may need to take a little longer to save for your vacation. Once you get into the habit, you can always just keep a rolling vacation savings system going so that in the future you have more flexibility with when you take a vacation.

Multiple Savings Accounts

One of the best options for saving for a vacation, and one that my family uses, is multiple savings accounts. Open a free savings account (double-check that you won’t pay any monthly fees!), and start transferring money into the account to save up for your vacation.

Related: Best Online Savings Accounts with High Interest

Then, each month you can transfer money to your vacation account. Or if you have direct deposit, have your employer put funds from your paycheck directly into that account. A separate account like this can keep you from dipping into your vacation funds just because they’re sitting in your primary checking account. Just be sure you can easily access the money when it’s time to spend on your vacation.

Save Conceptually

Once you get into the habit of budgeting, you may not need multiple bank accounts. You can just trust yourself not to overspend your budget just based on what’s in your checking account. But once you get there, you can use tools like Mint’s budget function.

In Mint, you can set up a vacation budget where you start each month with the previous month’s leftover amount. So if you budget that $250 a month, you can watch your vacation budget grow month by month. And then when you start to spend out of your vacation budget, you just track your spending in Mint like you would any other spending category.

Budgeting During Your Vacation

As you’re budgeting for your vacation and saving up, it’s a good idea to prepay as much as you can. This will almost certainly include your flights, hotels or other accommodations, and rental cars. You can get better deals when you pay ahead of time, often well ahead of time.

But what about sticking to your budget while you’re actually on vacation? You’ve got a few options here:

  • Carry Cash: You can take out all of your daily discretionary funds in cash and carry them in envelopes during your trip. This is a classic way to reduce overall spending and keep your spending in check. But it can also be risky if you lose your cash.
  • Track it Daily: If you’re already using a budgeting app connected to your checking account, just log in each day to do a quick check of that day’s spending and make mental notes on how much you have left available.
  • Spend on a Credit Card: You don’t want to rack up debt you cannot immediately pay off on vacation. But if you have a credit card with no balance, put all your daily spending on that. Then log into the cards app each day to keep tabs on your overall spending so you can rein it in if need be. If you do use a credit card, be sure you’re using one of the best. Check out our list of Top Travel Rewards Cards to earn cash or points back on your spending.

Next Steps

Bottom Line

You can enjoy your vacation and be financially responsible at the same time. Budgeting and tracking your spending may take some practice. It may even seem like a chore at first. But trust me: it’s better than coming back from your vacation with an extra $1,000 of debt because of a lack of planning.

That extra $1,000 could take you over 6 months to pay off (if you originally saved $150 a month), which adds 6 more months before you can even start saving for your next trip! Wouldnt you rather take a big vacation every 14 months rather than wait 20 (or more) months because you overspent?

With the Travel Budget Worksheet and a little discipline, you can easily plan and budget for your next vacation.


  • Abby Hayes

    Abby is a freelance journalist who writes on everything from personal finance to health and wellness. She spends her spare time bargain hunting and meal planning for her family of three. She has a B.A. in English Literature from Indiana University Purdue University Indianapolis, and lives with her husband and children in Indianapolis.

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