The Vacation Budget


Have you ever overspent on a vacation? Ran out of funds while on your trip? Arrived back home and looked at your stack of bills due and your checking account and immediately panicked? Let’s look in to how to avoid these things and cover some unexpected costs that can arise when putting together your vacation budget.

The Point Of A Vacation

The entire point of going on vacation is for relaxation, correct me if I’m off base here. When I go on vacation I don’t want to be constantly thinking about how much money I’m spending, how much I’ve got left and what’s waiting for me when I get back home. I want to lay out in the sun, swim in the ocean and relax. I want to watch sunsets and sunrises, if I’m still awake for them, and I want to make the most of my time. A big part of that, at least for me, stems from having all of my finances in order before departing on a vacation.

If I am thinking about money (or the lack thereof) then I am taking away from my experience. Why would I want to do that? If I’m taking the time to plan, pay for and go on vacation, I want to make sure that I experience it as fully as I can. This is where the vacation budget comes in.

Hidden Expenses

What are some common expenses and fees that are often times overlooked when planning a vacation?

    • Extra baggage fees
    • If it’s a road trip, toll roads
    • The fee held on a credit card for a hotel room
    • Extra charges at hotels
    • Dining out and tipping
    • Unforeseen expenses

Yes, that last one can be an issue… By nature, “unforeseen expenses” are just that, they are unforeseen. How can you prevent something you have no idea is going to happen? We’ll get there. Hang on. We’re going to go forward on the premise that the vacation in question is planned out in advance and is not a spur of the moment weekend retreat.

Vacation Budget

I would highly recommend that you sit down, well in advance of your departure date and begin listing all vacation related expenses you can think of.

    Include all applicable taxes, fees and any fees from necessary extra baggage. You can search online or contact the airline ahead of time to find out these fees.

    Hotel Stay
    This can (and for me, has been) a big hang up. When you check in to a hotel they ask for a credit card or check card to stay there. It’s not going to be charged, they say, until after you check out and it’s totally fine if you want to pay cash or with a different card at that time, they still require a card. They may not charge the card technically speaking, but they do put a temporary charge on it that lasts the duration of your stay and oftentimes 72 hours after your departure. Since we all know it’s not the greatest idea to carry large sums of cash on our person, we’ll usually finance our vacations with either our check card or a credit card. If this is the same card that you’re using to hold your hotel room with, well all of the sudden you’ve got a pretty sizable chunk of change that’s held up for the rest of your trip! Not cool. I’d highly recommend using a dedicated credit card to hold the room with. You can call the hotel in advance and ask what the temporary charge is for this situation and use any credit card you’ve got for this purpose since a final charge will not go through and no interest will be accrued. You will now have your entire vacation fund free for the duration of your trip and in the end you can still pay with your desired method.

    Be sure to contact the hotel ahead of time and inquire about all taxes and any additional fees like WiFi and build these costs in to your vacation budget.

    Food And Beverage

    For some, this will be a husky portion of their vacation budget, for others, not so much. My girlfriend Christa and I are big diners. We love cuisine and we love the service and experience and both of us being long time service industry kids, we tend to tip pretty well because we really appreciate the effort it takes to provide exceptional service. I actually get a good amount of joy for compensating people for a job well done. When budgeting for this section of a vacation I try to research ahead of time the area we’ll be staying and the places we will definitely go. I’ll typically work out a daily budget for food (sometimes a daily budget for all expenditures excluding hotel or car rental) and limit it to that number per day. It can be nice to plan for one huge throw down dinner during your trip too, as long as you can fit it in to the budget it’s a pretty awesome experience to drop a relative ton of cash on a meal! When you are planning the food and drink portion of your vacation budget be sure to do your homework ahead of time and figure out if the area you’ll be staying has gratuity automatically built in to checks. If so, nothing more is expected, but if you don’t know it’s built in it can take some careful sleuthing to find the “18% Gratuity” on the bill sometimes. If it’s not built in, for the love of God, tip if the service deems appropriate and plan for this in your budget.

    The Unforeseen

    As we stated earlier, yes, the unforeseen are just that, unforeseen. What may these be? On a road trip you blow a tire. While in Mexico, you drink the water and a few hours later end up soiling yourself and need to buy new clothing. It can happen. You lose your phone, your suitcase, your…whatever. All these things you’re not going to plan for, of course, but that doesn’t mean that IF they come up they need to be a financial hindrance! How do you circumvent this? You are going to plan out the cost, as near you can, of your entire trip and save up for it properly ahead of time. You are going to include at least an additional ten percent on top of your savings to cover things that you don’t plan for. You may use it you may not. Either the unforeseen get paid for without any additional financial stress or you come home with extra money to put toward whatever you wish.

    Planning For Time Off Of Work

    If you’ve got a career that offers paid vacation, by all means take advantage of it! It’s a great deal! The more time you can be away from work and still get paid… do I even need to finish this thought?

    If you are self employed or at a job where you do not get paid time off, this section is for you. Quite possibly the biggest pitfall of not having a vacation budget is not budgeting in for time missed at work. My example is working in the service industry. Working hourly, for tips, and taking a week or two off is detrimental to income. Not only are you spending money on vacation, but you are missing out on income from not working while you’re gone. It’s a double whammy. When in this situation, you must must must build in to your vacation budget time missed from work. Using simple, round numbers: Your entire trip costs $2,000, you’re taking two weeks off from work where you net $750 per week. The total, true cost of your trip? $3,500. You must build in the time off from work! If you don’t, you’ll end up getting back home either with bills due or bills just about due and you will not have the money to pay them. This defeats the entire purpose of the vacation – relaxation. You want that relaxation to last, right? Don’t put yourself in a position where the instant you’re back home you’re worrying about money again!

What are some areas you’ve experienced in vacations that a vacation budget would be helpful? Share your tips and insights via commenting or emailing!

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