If you’re like us, and we think you are, you’d be traveling all the time if you could. However, one of the toughest parts of frequent travel is the financial aspect. Traveling can be costly if you aren’t careful, but the good news is that with a little planning and budgeting, you can make it just about anywhere! In this blog, we’ll go over how much you should save to go on vacation.
Why Budgeting Matters for Your Vacation
The good news is that you can find a way to make it just about anywhere with enough advance notice and planning. One of the most important elements of that plan should be your budget. Budgeting may sound daunting but it truly allows you to take the trips you want and come back home without debt. Well worth it!
If you’re ready to take a vacation, here’s how you can set up your budget plan no matter what state your bank account is in:
Step 
: Do Your Research
Before you do anything else, we recommend researching your destination. Trip expenses will vary depending on where you’ll be traveling. For example, some destinations are more affordable or easier to get to than others. Consider the following:
- The best times of year to travel to your destination (based on things like weather, affordability, availability)
- Your options for accommodations
- Whether public transportation is safe and easy to use
- The cost of activities you’ll want to do and sights you’ll want to see
This way, when you go to determine your budget, you’ll have a sense of the options available to you. It will also give you a better idea on the price ranges for travel, accommodations, and activities while you’re there.
Step 
: Determine Your Travel Expenses
Your travel budget will vary drastically depending on your destination, who’s traveling with you, what kind of traveler you are, and more, but there are some categories that all travelers will likely cover:
Airfare
If you’re traveling internationally, you’ll likely have to fly to get there. In all likelihood, this will usually be your biggest expense. Use this guide to find inexpensive airfare to book your ticket and keep costs low.
Accommodations
Next, you need to figure out what type of accommodations you’re looking for, so you can get a sense for how much you’ll likely spend, even if you aren’t quite ready to book. If you’re up for a hostel, for example, your budget will be lower than if you’re looking for a boutique hotel experience.
You’ll know what’s generally available from your research in step one, so now you can do some additional digging to find out what the price range looks like for the type of accommodations you want specifically. This will be another large portion of your trip expenses.
Pro-tip: Make sure you call any hotels you’re considering to ask about special rates – you might be surprised to find more discounts available, such as those for credit card holders or those in public service.
Entertainment
Want to see a play or check out a museum or two while you’re traveling? Sometimes you can find packages that cover multiple sites or activities. Use your research to determine how much you should budget for entertainment. The more you can plan your entertainment ahead of time, the better –and the more you can save money!
Food
When it comes to dining, you can set a daily budget and then do what you can to stay within that budget each day. In our experience, you always spend more on food than you think you will. So to be safe, we recommend cushioning your food budget a little, if possible. Being hungry can really take the fun out of a day of sightseeing and day trips.
Transportation
When you arrive at your destination, how will you get around? By cab, by public transportation, by foot? Think this through as much as you can, and then do some research around the cost of the former two options so you can set your budget for transportation.
Travel Insurance
As soon as you book your travel, it’s time to get travel insurance. Making sure you’re covered right away is so important. If your travel plans get knocked to the side because of something unexpected, travel insurance will be there to protect the funds you’ve invested into your trip.To get a sense of what you might pay, use our instant quote tool. Here’s how to calculate what trip costs need to be insured under travel insurance.
Souvenirs
If you’re a traveler who likes to purchase local goods for yourself or as presents, put it into your budget. Like with food, this is a budget you can set based on how much extra cash you think you can spend, with a little research around the general cost of goods in that particular area. Be careful here, and determine who you’ll buy gifts for in advance and how much you can spend on each, so you don’t accidentally end up going overboard.
“If you plan on coming home with momentos, leave extra room in your suitcase on the trip to your destination,” says Terry Boynton, co-founder and president of Yonder Travel Insurance. “That way, you won’t have to buy an extra suitcase or pay overweight baggage fees on the return trip.”
No matter where you’re headed or what type of trip you’re going on, you should definitely plan to have a little extra money on hand for emergencies or extras. This could cover anything from buying Band-Aids to buying locally-made jewelry you didn’t plan on buying, but have fallen in love with. Once you’ve covered your other categories, start to put your extra money here. Most recommend putting 10-15% of your budget into this category.
Step 
: Start Saving Early
As soon as you plan your vacation, start setting money aside so you can save incrementally. This is a practical strategy for many, rather than having to put a lot aside in the weeks leading up to the trip. All you have to do is look at your budget and divide the total chunk you’d like to save by the number of weeks you have before you head out.
So, how much should you save to go on vacation? Start by estimating the total cost of your trip. For example, let’s say you estimate your travel expenses to be around $3,000 and you have six months until you depart. Since there are approximately 26 weeks in six months, you can use the following formula to calculate how much you need to save each week:
Total Savings Needed ÷ Number of Weeks Until Departure = Weekly Savings Goal
In this case, the calculation would be:
$3,000 ÷ 26 weeks = $115.38
This means you would need to save about $115 each week to reach your vacation budget goal. Again, breaking up the savings by week makes your goal more achievable, helps you stay on track, and eliminates stress.
Put aside as much money as you can – you can always pull it out of the budget if you don’t need all of it, but it can be stressful to make up the difference if you don’t save it originally. We recommend using a tool like mint.com to set up your budget and keep your budget on track.
Step 
: Stick to Your Budget
Budgets are great…but only if you stick to them, which can be tough when you’re traveling. If you’re worried that your budget will go out the window when you get to your destination, there are some steps you can take to make it easier on yourself:
Cash Envelopes
If you’re using cash, put your daily budget into envelopes ahead of time. By looking at your itinerary and pulling out the money you’ve allotted for each day’s activities, you can ensure that you stay on track with your budget. Always bring a credit card, in case of emergencies, but using cash will provide a reminder that you only have a set extent of money to use each day.
Credit Card Awareness
If you’re going to use credit or debit cards, learn about rates in advance. These are often travel costs that some people forget about when planning. If you’ll incur foreign transaction fees or ATM fees, you may want to take out a good supply of cash at the beginning of your trip and budget it out. That way, you don’t have to create a budget line item just for fees – the rare occasion when they come up can come out of your Extras category.
Track Your Spending Each Day
Make a spreadsheet with your budget in it, and make a note of how much you spend each day. If you go over one day, you can determine how to adjust for the next. It happens sometimes – you just need to account for it and tweak your budget going forward (even if that means pulling from the Souvenir or Extras categories).
If you follow these steps, you should be well on your way to saving for (and enjoying!) the trip of a lifetime.
Do you have any tips for travel budgeting? We want to spread the word about them to the Yonder community! Share with us on Facebook, Twitter, or tag us on Instagram (@insureyonder). Also, if you need help deciding which travel insurance to purchase to protect the investment you’ve been saving for, our team of helpful humans are ready to assist!
As a seasoned professional with over five years of experience in the travel insurance industry, Meagan has honed her expertise in marketing and operations working for Yonder Travel Insurance.
Throughout her career, she's shown dedication assisting customers at every stage of their travel insurance journey, from the initial quote process to navigating the claims process. Her expert understanding of travel insurance equips her to provide unbiased and valuable insights, which help travelers find the best coverage and maximize its benefits.
