Creating a holiday budget and sticking to it isn’t about dull spreadsheets and hunting deals, but rather about maximising your overall travel experience.
I enjoy spending money, especially on vacation, but that doesn’t mean I should go overboard.
Planning a trip, with a little research and budgeting, can actually give you a sense of relief and control that makes the holiday more enjoyable.
Travel expenses can vary greatly depending on a variety of factors, so it’s critical to plan ahead of time.
In this article, we’ll go over how to make a vacation budget and how to stick to it.
The first step in making a holiday budget, unless you have unlimited funds, is to determine how much you can spend in total.
You’d be surprised at how many people don’t do this and instead hope for the best.
With your spending limit or budget established, you can now easily choose a location.
If you already have some savings stashed for vacation or holiday or travel, all good
The only factor that determines your spending limit is your budget (how much can you save from your budget for your vacation?)
You now have a vacation budget and have decided where you want to go. The next step is to decide what you will spend your money on.
There will be both large and minor expenses, so make a list of everything.
Here is a list of expenses to consider; not all will apply to you, but they are included to help you remember.
The importance of establishing priorities holds true in all areas of life including your expense
First, you assign a number from 1 to 10, with 10 being the most important to each expense, and then you rearrange the list from most important to least important.
This will be very personal and will also encourage creativity
For example, Flying first class and riding a hot-air balloon is important to Ben but for Mary eating in some high-end restaurant.
As Neil Blumenthal put it, “Details matter. They create depth, and depth creates authenticity”, so get authentic
Keep the numbers as realistic as possible by drawing on past experiences, conducting some research, or asking people you know who live or have visited the location you are visiting.
Websites that can help you research costs when making a holiday budget
Details matter. They create depth, and depth creates authenticity
After allocating funds, we add them up, and the total amount will most likely be either more or less than the budget set in step one.
We then make adjustments to the expense list or the amount allocated.
For example, Ben is £200 over budget and decides to reduce the number of days he has planned to stay by one, thereby reducing lodging and food expenses.
And if you can’t cut any more to make the holiday worthwhile, you either postpone the vacation or save more.
If you don’t have your vacation budget saved up, you must create a savings timeline to fund the trip; the determinant of this timeline is your budget and income.
Mary wants to travel to Dubai in December and has a budget of £3,000, with zero amount saved up for the trip meaning she has 8 months to save the funds, which amounts to saving £375 monthly.
Mary can open an account and set up a direct debit for £375 to help her save for this trip; this is a sinking fund – learn more about it here.
While you’re saving for your trip, you can start planning which days you’ll do which activities. What activities are you planning? What kind of reservations do you need to make ahead of time?
To ensure you don’t go over budget, use Yelp or Tripadvisor or my favourite, a simple search on YouTube to research reviews and pricing.
Tracking your expense is where you either win or lose with your budget or plan; you can also think of this as making sure you stick to your budget while on vacation.
It makes no sense to go through all of this planning only to arrive at the vacation destination and abandon the plan.
You’ll want to make sure you’re on track with your budget and plan, and make any necessary adjustments.
There are different tools to help you keep track
We have shared the nuts and bolt of how to make and stick to a holiday budget. The tips below might be worth considering
You can enjoy your vacation while remaining fiscally responsible. As much as I enjoy spending, I don’t want to return home in debt, and I’m sure you feel this way.
Further Reading
