How to Make a Vacation Budget You Can Keep
Whether you’re headed for an exotic island paradise or a road trip to a neighboring state, making and staying on track with a budget will help you fully enjoy an upcoming vacation. You might get back home with a pile of dirty laundry or a sunburnt nose, but at least you won’t have a loaded credit card bill to face.
Follow along as we break down everything you need to know to build your dream vacation budget.
Include Vacation in Your Savings Goals
An effective vacation budget starts with a realistic savings plan. Set a goal to save the money needed by a certain date, and figure out how much you need to contribute each month to get there. Just remember to work this savings goal into your existing plan, so you don’t strip funds from your emergency savings, retirement contributions, or monthly debt repayments.
If you start from an affordability perspective, consider the popular 50/30/20 rule for budgeting. From your after-tax income, this means spending:
- 50% on needs such as housing, food, utilities, health care, and debt repayment
- 30% on wants including restaurants, entertainment, and vacations
- 20% to build investment and retirement funds
For instance, 30% of a $60,000 after-tax income is $18,000. A family saving for a big vacation could opt out of $1,000 per month on luxuries like eating out and streaming services for six months in order to save $6,000 for a big trip.
Establish Your Budget
How much do you need to save? The average vacation for a US resident costs $1,145 per person, but distance, destination, travel method and activities all play a role in setting the cost for your vacation.[1] To calculate your budget, consider these categories of spending. Plug in estimates based on the number and age of people in your party.
Travel Method and Distance
How will you get there, and how will you get around once you arrive? Include:
- Air or train fare
- Car rental including taxes, fees, and gas
- Fuel for your vehicles, calculated by distance, miles per gallon, and fuel cost, plus tolls
- Local transport by taxi, bus, subway, rideshare (Lyft, Uber, others depending on location)
- Anticipated parking costs at airports, hotels, events
Food
On average, a family of four on vacation pays $132 per day for food, not including tips, alcohol, or snacks.[2] Your food budget should account for whether you opt for:
- Resorts or cruises that include meals and beverages
- Fine dining plans
- Hotels or bed-and-breakfast establishments that include breakfast and snacks
- Cooking meals in a camper, vacation rental, or hotel suite with a kitchenette
- Buying snacks and beverages at discount or grocery stores vs. events and gas stations
Lodging
Where will you stay, and how many rooms and beds will you need? While hotels are the usual, you can also consider:
- Camping—from tents and sleeping bags in low-cost parks to luxury motorhomes
- Airbnb, Vrbo, or other private home or room rental
- Staying with friends or family
- Hostels
Hotel pricing varies based on destination—average prices in the top three vacation cities are $127 in Las Vegas, $258 in NYC, and $114 in Orlando.[3]
Activities and Entertainment
Include big-ticket shows, museum visits, snorkeling lessons, and any other anticipated diversions. You may want to balance out a pricey theme park visit or Broadway show with low-cost and free activity days, or consider splitting up so each person can pursue exactly what they want. From there, you can add up:
- Tickets for concerts, shows, guided tours, and special events
- Entry prices for zoos, parks, museums
- Spending money, souvenirs, and gifts
Taxes, Tips, and More
Don’t forget taxes and fees when you plug in numbers—look for a total cost rather than the base cost of hotels, airfare, and car rentals. In popular destinations and cities such as New York, Chicago, and Minneapolis, these taxes can add as much as 15% extra for hotel stays.
Other costs you may need to account for include:
- Tips
- Vacation clothing and gear
- Travel insurance
- Baggage fees
Track Your Spending For Next Year
Bring a notebook or use an app to input all of your travel spending. This will help you monitor costs as you go and improve next year’s vacation budget accuracy.
Set Up a Vacation Fund with NJFCU
Whether it’s a trip to the shore or to Paris, North Jersey Federal Credit Union can help you get there.
With customized savings goals and free financial consulting, NJFCU is the credit union New Jersey residents count on. Along with financial wellness and savings tools, we offer exceptional customer service, low-interest credit cards and loans, and tax discounts.
Ready to learn more about the best credit union in NJ? Apply today for membership.