I’m a Financial Expert: This Is the No. 1 Mistake Americans Make When Budgeting for Vacations
Written by
Cara Danielle Brown
Edited by
Zuri Anderson
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With summer right around the corner, many Americans are excited to grab their kids and jet off to their favorite tropical destination. They’ve done their research and crunched the numbers and this vacation is completely, 100% within budget, or so they think.
GOBankingRates spoke with experts to unpack the biggest mistake people make when budgeting for travel.
The Top Travel Budgeting Mistake
“The most common mistake people make when budgeting for vacations is focusing only on the big-ticket items like flights and lodging. What often gets overlooked are everyday expenses that quickly add up like dining out, ground transportation, souvenirs and tips,” said Uziel Gomez, founder and financial planner at Primeros Financial.
In other words, the definition of “budget” needs to be expanded. Assuming the rest of the trip outside airfare and hotel won’t cost that much is, well, going to cost you.
Gomez stated meals alone can cost anywhere from $50 to $100 per person per day. For a family of four on a seven-day vacation, that’s up to $2,800 that may have gone completely unaccounted for. And what if you decide you want to do something you hadn’t planned for like zip-lining or white-water rafting? That’s going to cost you, too.
Melanie Musson, finance expert at Clearsurance.com, explained under-budgeting and lack of foresight can also contribute to only “planning for the best-case scenario” — a whole other, quite expensive can of worms.
“You might need to stay in a hotel an extra night,” stated Musson. “Your car might need an oil change. You could get a flat tire. Your kids might want more to eat than you expected.”
Whether necessary or desired, extra costs will always arise. Failing to plan for them makes it near impossible for Americans to stick to their vacation budget.
How Can Travelers Course Correct and Budget Accurately?
When planning your next vacation, travel blogger Dana Yao advised budgeting for flights and accommodations as merely the first step in creating a travel budget.
Next, review your itinerary and add a realistic daily estimate to your budget in order to account for meals, alcohol, transportation or recreational activities. From there, add an additional 10% to 20% buffer for anything unexpected like a missed train or emergency medical care.
And, finally, don’t forget to brainstorm hidden costs like resort fees or the price of a pet sitter while you’re away.
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