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5 steps to create a vacation budget

How to plan a vacation on a budget — without stress or FOMO.

It’s not uncommon to wake up at the end of a getaway and discover a massive credit card bill. Sticking to a travel budget can help ensure this doesn’t happen. Here’s how to make a vacation budget in five steps so that you can be all smiles and zero stress after returning home.

Step 1: Create a budget

Before you start saving money, you’ll first need to know how much your getaway will cost. Once you have an idea of how much your room, travel, food and extracurricular activities will total, create a budget of all of your finances. This will give you a big picture of how much money is going into different spend categories and how much income is leftover at the end of each month. If you need to save a bit more before your trip, see if you can adjust any spend category that you’re spending more on each week. For instance, if you notice you’re spending a lot on dining, cut down on how often you eat out or order delivery.

Step 2: Choose a tracker or app

If you don’t want to use a simple spreadsheet like Excel or order a budget planner on Amazon to keep track of your spending, try a budgeting app. We like apps like PocketGuard and Goodbudget because they’re free, but you should compare features before signing up so you can find the perfect budgeting app for you.

Step 3: Save money (or decide how much you can spend)

Now that you have an idea of your expenses and know how much you need to save, it’s time to start setting money aside. Come up with a specific dollar amount that you’re OK with investing in your vacation. After you set that maximum spend amount, you can strategize accordingly.

You could consider opening up a high-yield savings account that’s devoted exclusively to your vacation fund. Some savings accounts, like Ally Bank’s Online Savings, allow you to opt into automated savings and roundups to help you meet your goal faster.

Step 4: Plan your trip

Next up? Deal hunting. Use sites like Expedia and Orbitz to find deals on flights, hotels, activities and more. We like Hotwire for cheap 4-star resorts, and Hopper for amazingly low flight prices that other sites won’t show you.

After paying for transportation and lodging, put the money you have left into different buckets, like “dining out,” “groceries,” “activities” and even “cocktails” if that’s your thing. That way you know exactly how much to spend in every category.

Step 5: Stick to it

This is probably the most difficult part of a vacation budget. Once you’re in vacay mode, it can be tempting to forget all about your budget and splurge because it’s a “special occasion.” This can quickly lead to spending more money than you have.

Consider incentivizing yourself to stick to your budget. Set aside $50 to treat yourself to a fancy dinner AFTER the vacation if you stick to the budget while ON vacation. Also consider choosing a travel buddy who will hold you accountable, which can help discourage you from ordering that second poolside slushy.

How much to budget for a vacation

The amount you should budget for depends on where you’re going and what you’ll be up to. You can take a super cheap vacation by driving your own car and staying with friends or family. Or if you’re craving a taste of luxury you’ll need to save some more dough.

As an avid US and international traveler, here’s how much I advise budgeting per day, depending on your situation:

ExpenseTight budgetRoomy budgetLuxury budget
Lodging$0 (stay with family or friends)$100+$300+
Transportation (fixed cost)$100$300$500+
Total for 4-night vacation (5 days)$350$940$2,300+

Keep in mind that there are ways to cut costs even further, like limiting how often you eat at restaurants and opting for free activities, like self-guided walking tours and reading by the beach.

You can also mix and match the different budgets, depending on what you value. For example, you could take a train to your destination for less than $50 while staying in a luxury hotel and stick to free activities, like museums that don’t charge admission.

9 tips to stick to your vacation budget

Here are a few things you can do to ensure you won’t spend like a rock star:

  1. Set a realistic budget. There’s no point in setting a budget you can’t keep. Consider how much you spend on your last vacation and set a budget that’s manageable.
  2. Remember your numbers. People tend to forget about their financial situation while on vacation and have an “I’ll deal with it later” attitude — this is how debt happens. Check your budget regularly to see how your credit cards and bank accounts are holding up.
  3. Use a prepaid travel card. You’ll load a specific amount of money onto the card, which is all you’re allowed to spend after touching down. Prepaid travel cards can also help you avoid foreign transaction fees when abroad.
  4. Make plans and stick to them. If you’re planning a day out with family or friends, organize how much you’re going to spend beforehand. Check your bank accounts online so your financial situation is fresh in your mind and you’ll be less likely to overspend.
  5. Stay at hotels with rewards. A hotel credit card rewards your spending with points you can use for hotel stays. Plus some cards may reward you with an additional night when you redeem four or more reward nights at particular hotel brands.
  6. Travel off-peak. Avoiding the high season when traveling on a budget could be a solid way to save some money. This also applies to airline mile redemption. However, check the seasonality of your destination as it varies from one location to another.
  7. Travel light. Unlike checked baggage, it’s usually free to bring a carry-on bag on the plane. If you do multiple flights, the cost of checked bags will add up. Avoid this by traveling light or by getting an airline credit card that comes with a free-checked-bag perk.
  8. Avoid taxis if possible. Instead, opt for public transportation. If the location you visit offers ridesharing services, it may also be cheaper than taxis. And if you have a credit card with top rewards on Uber, you can earn points and then redeem them for travel rewards.
  9. Consider a credit card with a purchase rate offer. Credit cards with a 0% intro APR period are a great option for vacations as they can let you make purchases during a promotional period without accumulating interest. The key thing to remember with these cards is to pay back all of the money you owe before the promotional period ends. Vacation cards can also help you stretch your funds.

Spending habits to avoid before your vacation

Here are some things to avoid when trying to save money for a vacation.

  • Shopping in a mood. Never go grocery shopping when you are hungry, right? If you know that a mood will make you forget about your budget, do yourself a favor and avoid frivolous spending.
  • Shopping with someone who doesn’t care about your budget. Only you’re aware of your financial situation and budget. Don’t let someone who doesn’t care about your budget be a bad influence on your spending habits.
  • Getting carried away at a sale. Sales are a great place to save money, but it also poses the threat of overspending. If you’re planning on going to a sale, avoid impulse purchases and stick to your budget.

Compare savings accounts

Start saving for your dream vacay now. Use this table to find a savings account with a high APY and zero fees to maximize your fun-in-the-sun money.

Name Product Annual percentage yield (APY) Fee Minimum deposit to open
Aspiration Spend & Save Account
Finder Rating: 4.2 / 5: ★★★★★
Aspiration Spend & Save Account
$0 per month or $7.99 per month for Aspiration Plus ($5.99 per month if you pay annually)
Deposits are fossil fuel-free. A spend and save combo account with unlimited cash back rewards and deposits insured by the FDIC and a $100 bonus when you spend $1,000 in your first 60 days.
Barclays Online Savings
Finder Rating: 4.6 / 5: ★★★★★
Barclays Online Savings
A rate greater than 5x the national average
Quontic Bank High Yield Savings
Finder Rating: 4.6 / 5: ★★★★★
Quontic Bank High Yield Savings
Interest is compounded daily. No monthly service fees. Competitive rates
Axos Bank High Yield Savings
Finder Rating: 4 / 5: ★★★★★
Axos Bank High Yield Savings
No monthly maintenance fees. No minimum balance requirements. Interest compounded daily.
American Express® High Yield Savings
Finder Rating: 4.6 / 5: ★★★★★
American Express® High Yield Savings
Enjoy no monthly fees and a competitive APY with this online-only savings account. Accounts offered by American Express National Bank, Member FDIC.

Compare up to 4 providers

Bottom line

Traveling on a budget is possible. But you have to take several aspects into consideration, including choosing the right travel money option. This factor can be the most important one. Check out our travel money pro tips for more help managing your money during your next vacation.

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