Did you know that most of the happiness derived from vacationing or going on a trip occurs in the planning phase? Yes, planning a trip can make you happier than actually taking it. This is likely due to anticipation, according to a study in the journal, ‘Applied Research in Quality of Life.’ One major aspect of the planning process is budgeting. Most of us don’t have an unlimited spending budget for vacations, so it’s important to use our dollars wisely and get the most bang for our buck. This article will help you learn how to budget for an upcoming trip.
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How to Budget
Budgeting is an excellent way to take control of your finances. It’s a pre-determined plan for where your money will go, and it will ultimately help you achieve your financial goals. There are different types of budget plans out there, and you can test them out to see what works for you the best. The two most important areas of budgeting are covering your essential expenses and saving, but there should also be room to spend on fun, and trips fall into that category.
How to Budget for a Trip
If vacations are part of your financial goals, then you should designate a special savings fund in your budget for them. Follow the steps below to budget for an upcoming trip, so you don’t have to worry about whether or not you’ll be able to afford it.
1. Determine How Much Money You Will Need to Spend
Coming up with an expense list will help you figure out how much money you’ll need to save in order to pay for your trip. Here are the different categories of travel expenses:
How will you get to your destination? Does it require flying, renting a car, purchasing train tickets, or getting on a boat? Once you get to your destination, how will you get around? And are there any other supplemental costs associated with your transportation? For instance, if you’re leaving the country you may need to obtain or update your passport. There are also additional fees with rental cars such as liability coverage and gas.
One piece of advice is to try to travel during off peak times. Flights also tend to be cheaper during the week. If you have to travel during a peak time, try going on the date of the major holiday, which also tends to be cheaper.
Where you stay will probably be your second largest expense when it comes to going on a trip, so the more you can save the better off you will be. There are many travel search engine sites that scan for deals like Booking.com or Priceline. There’s also camping, or sites like Airbnb, where you may be able to find cheaper accommodations.
Eating out for every meal can add up quickly and turn into a big expense, which is essentially what could happen while you’re traveling. Ways to save money on food while vacationing are:
- Buy groceries for some of your meals. This is easier if you’re staying somewhere with a kitchenette.
- Try to stay away from touristy restaurants, which tend to be more expensive.
- Find out what the locals are eating.
- Splurge on lunch rather than dinner.
- Bring snacks while you’re out. Studies show that hunger leads to poor decision making.
Some people just want to relax on vacation. They want to get away from the stress and hustle bustle of normal daily life, so they’re perfectly content just sitting on a beach doing nothing for a week straight. Others seek adventure and want to get out of their comfort zone by trying fun and exciting things. Maybe you fall somewhere in-between.
A tip for saving money on activities is to make a list of your priorities. Rank them by ‘must-do’ to ‘would like to try.’ Add the costs to your list, and return to it later on after you’ve added up all of your expenses.
Depending on where you’re going, you may have other costs like vaccinations or travel insurance. You may need to pack certain gear that you will need for the trip. Or you may have a pet at home that will need to be boarded. Don’t forget to factor in these costs.
2. Start Saving
Once you have your expense list, you can add everything up to get your grand total. This will give you an estimated amount to start saving for as soon as possible.
Add a Trip Savings Fund to Your Paycheck Budget
Depending on which budget system you use, you should have a portion of your paycheck going towards savings. Hopefully you have different types of savings and investments in place, and investing in yourself should be part of that. Studies show that people who take vacations tend to have better stress levels, are at less risk for heart disease, maintain a better outlook on life, and are more motivated to reach their goals.
Consider Other Ways to Make Money
These days it’s not that hard to make extra money while working from home. Here’s a list of the best side hustles you can do without any experience. Bringing in some extra cash will help you achieve your savings goal faster, without disrupting your other savings plans.
Planning for an upcoming trip is arguably the best part. Budgeting will help you feel financially prepared, and help keep your expenses down as much as possible. Once you have your list of total expenses, you can weigh each item against your priority lists. That will help you decide what’s worth spending your money on.
This guest post was contributed by Jordan Smith. Jordan Smith is a personal finance blogger who writes about ways to make money, ways to save money, how to budget, and getting out of debt. To read more of her articles, check out her blog My Finance Diary.