How To Budget for a Vacation Without the Guilt of Overspending

Close-up shot of unrecognizable couple taking necessary notes and planning vacation trip to Europe while sitting at table.
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Taking time off work to go on vacation should be a pleasurable experience, but it can leave you with guilt and anxiety if you end up going over budget. Planning ahead is the best way to prevent this from happening, so you can leave your vacation feeling relaxed and refreshed, rather than worrying about the credit card charges you racked up while you were away.

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I spoke with financial professionals and other money experts to get their tips on budgeting for a vacation — without the guilt of overspending.

How To Create a Vacation Budget

When it comes to creating a vacation budget, “the more detailed, the better,” said Rachel Cruze, author, financial expert and host of “The Rachel Cruze Show.” “How much will you spend on travel and accommodations? What about meals and souvenirs?”

Make Your Money Work for You

In addition to flights, hotels, food and gifts, your budget should account for transportation while you are there and anything you will need to buy for your trip.

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“Your budget should include the cost of renting a car once you get there and the gas that goes into that car, as well as insurance if you have to pay for that,” said Bobbi Rebell, personal finance expert at Tally and author of “Launching Financial Grownups.” “It also might be clothing you may need to buy specifically for the trip. An example might be if you are going hiking, you might need special equipment.”

Figure out which attractions are must-sees, and which are just extras.

“Decide on your big spends in advance,” said Lacey Cobb, CFA, CFP, director of advice solutions at Personal Capital. “By prioritizing your purchases before arrival, it will be easier to pare down the list of sights you may want to see.”

You also need to account for additional expenses that may come along with your being gone.

“Don’t forget about costs associated with being away from home, such as pet care,” said Lindsey Bell, chief markets and money strategist at Ally.

Make Your Money Work for You

In addition, you should also account for any missed income.

“While it is not directly something you pay for, you should also factor in that if you have a business or a job that does not pay you when you are on vacation, you won’t get paid for that time you are away, so that is a cost that has to be factored into your planning as well,” Rebell said. “Your bills and expenses don’t stop.”

How To Save Up for a Vacation

Cruze recommends setting up a sinking fund to save for your trip.

“A sinking fund is a strategic way to save money for a specific purchase, like a vacation, by setting aside a little bit each month,” she said. “This is one of the best ways to be intentional with your money, especially when saving for something very specific. So, once you’ve set your budget, divide the total amount you need by the months you have left until vacation and start saving.”

Consider cutting down on expenses temporarily so you can contribute more to your vacation fund.

Make Your Money Work for You

“Review your expenditures for the last few months in search of unnecessary expenses you can trim,” said Leigh Singleton, director of financial education at Monifi.

If you have a longer time frame, you may consider investing your vacation funds.

“If you have at least six months before travel, investing savings can earn you interest and grow your trip budget even faster,” Ally’s Bell said. “Consider short-term investments, CDs or money market accounts, depending on your financial situation.”

It’s also a good idea to save more than you think you will need.

“Build in a cushion,” Bell said. “Remember it is vacation, so it’s unlikely you’ll be able to anticipate every dollar you’ll spend. Instead, budget some cushion money above and beyond the costs you plan for.”

“I build a miscellaneous $500 into the budget that I can use for spur-of-the-moment purchases,” said Deanna Ritchie, managing editor at ReadWrite.

How To Avoid Overspending on Your Vacation

The first step to avoiding overspending is to be realistic about what you can actually afford.

“You may deserve your dream vacation before you can afford it,” Tally’s Rebell said. “Come to terms with that and make adjustments. If you can’t get past this one destination you have always wanted to go to, consider a shorter trip. Or, if you really want a longer break, consider a more DIY route with more affordable accommodations where you can make your own meals and lower costs. If you are dreaming of a beach vacation in a certain locale but a similar one goes on sale, jump on that.”

Once you’ve figured out where you will go and for how long, make an effort to save as much money as you can on the upfront costs.

“Set aside some time to research the best times to travel,” Cruze said. “If you have some flexibility, play around with different options for dates and times. The cheapest days to fly are Tuesdays, Wednesdays and Saturdays.”

Traveling during the week can help you save on other costs, too.

“Staying in hotels during the week as opposed to the weekend will save money,” said Steve Gickling, CTO at Calendar. “Spa services and park passes may also cost less during the week.”

You also should plan out as much of your itinerary as you can in advance.

“Spontaneity can be fun, but also risky,” Cruze said. “Planning out your trip gives full transparency to expected costs and time commitments. There’s also no harm in buying attraction passes or tickets ahead of time. That way you’ve already paid for it and know exactly where it falls in your budget. You can also research areas that have free attractions, like zoos, museums and parks.”

While you’ll have to spend money on meals, one expense that can easily bust your budget is snacks.

“Snacking while traveling can get really expensive,” said Lakisha L. Simmons, Ph.D., financial freedom coach and CEO at Brave Consulting. “I always shop for snacks before we go. Each child has his own backpack with snacks and a refillable water bottle. Buying snacks on the go can get really expensive for a family, so I definitely pack plenty of protein bars and fruit for the trip.”

Another way to save is to look for attractions that are not in super touristy areas.

“Embrace local culture,” said Personal Capital’s Cobb. “Skip the main part of town in favor of side streets where restaurants are packed with locals.”

Cobb also recommends walking or taking public transportation rather than relying on taxis or rideshares.

“In this way, you get to experience a city up close,” she said.

Look for ways to cut down spending on any non-essential vacation costs, too.

“Do you really need souvenirs for everyone back home?” Ally’s Bell said. “Assess your spending as you go and adjust as necessary. For example, if you stretched your budget, scale back on your last day — maybe try some lower-cost dining options. Or, if you end up under budget, you can spend more on gifts before you head home — or put it toward your next trip!”

One way to ensure you don’t overspend is to take out as much cash as you have budgeted before your trip, and spend only what you have allotted for yourself.

“Leave credit cards at home,” said Dwain Phelps of Phelps Financial Group. “Using your credit card can lead to unnecessary spending. Utilizing cash leads you to spend only what you have on hand. You should only have a credit card for emergencies. This can also protect you from your identity being stolen.”

Why You Shouldn’t Feel Guilty About Spending Money on a Vacation

You should never feel guilty about treating yourself to a vacation — especially when you plan ahead.

“Curb feelings of guilt during your vacation by setting a budget and sticking to it,” Ally’s Bell said. “If you’re second-guessing your vacation expenses, it might mean that you’re spending above your means or that your spending might not be aligned with your priorities. Put careful thought into your budget before your trip, and spend your vacation time enjoying yourself!”

And remember that while vacations do come with a cost, the memories you can create are priceless.

“Tomorrow is not promised,” Dr. Simmons said. “So while you may be focused on long-term debt payoff or saving for the future, know that these travel memories are important and can last a lifetime. No need to feel guilty about living and enjoying life!”

Gabrielle Olya contributed to the reporting for this article.

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About the Author

With eight years of experience working in the personal finance space at GOBankingRates, Jaime Catmull has amassed an extensive network of financial influencers and experts. Now, she’s tapping that network to get the real scoop on how you can live your best financial life and increase your wealth.

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