How to Budget for Your Vacation

I can't tell you how many times people have told me that they have never traveled abroad or have had to postpone a vacation because they didn't have the money. While I applaud anyone for taking precautions to avoid going into debt, please know that there are MANY things you can do to make that dream vacation possible.

Check out my How to Prioritize Travel article for more tips on how to work in travel regardless of your job, salary, or family structure.

How to Finance Your Vacation

The phrase "energy flows where attention goes" comes to mind when considering how to budget for a vacation. Just as we spend our energy on the things we think about, we spend our money on activities and products we prioritize. Re-thinking where your money goes can have a dramatic impact on your ability to travel. Here are some concrete tips to put aside money for travel.

  • Cut back on unnecessary expenses such as cable TV, eating out, or that daily Starbucks latte

  • Arrange for a pre-set amount of money to be deducted out of your paycheck to go into a dedicated travel savings account

  • Earmark your annual tax refund for an upcoming vacation

  • Request donations to a travel fund in lieu of traditional birthday/holiday/wedding presents

  • Make all purchases using a rewards credit card to rack up airline miles that can be used to book free flights. (ONLY do this if you can pay off the balance each month)

Many B&Bs are more affordable - and beautiful - than pricey hotels

Many B&Bs are more affordable - and beautiful - than pricey hotels

Me at my AirBnB in Chicago - use my discount code to save $40!

Me at my AirBnB in Chicago - use my discount code to save $40!

Cities with a very high cost of living will be more expensive to travel to

Cities with a very high cost of living will be more expensive to travel to

Creating a Travel Budget

In order to create a travel budget, you’ll need to determine your travel style. Staying in B&Bs, taking public transportation, and preparing your own meals will save hundreds of dollars over staying in hotels, renting a car, and eating all meals in restaurants.

Knowing how much you can afford is the first step in creating a travel budget. If you've saved $2,000 for a given trip, then start with that figure and work backwards, plugging in all anticipated costs, plus a cushion for unanticipated expenses. If it's important to you to stay in a hotel with a pool (which may cost more), then scale back on restaurant meals.

Purchasing travel insurance helps protect you against unforeseen costs such as lost luggage, cancelled flights, theft, or accidents on the ground. I’ve tried out numerous travel insurance companies and I especially like World Nomads, which I recommend to all of my clients. Learn more in my post on Why You Should Buy Travel Insurance.

Choosing a Budget-Friendly Destination

Cheap international travel is harder to come by simply due to the hefty airfare required to get there. Cities requiring an expensive plane ticket, or with a high cost of living, such as Tokyo or New York City, will automatically make a trip more expensive. Locations with a lower cost of living and/or that can be reached by car or bus, allow travelers to enjoy a city’s charm and amenities without breaking the bank.

Nature-rich destinations typically offer an abundance of free and cheap activities such as hiking, swimming, and wildlife viewing. Camping can also be a very affordable option but campsites fill up quickly during the summer, especially over holiday weekends.

Taking advantage of discount offers

Taking advantage of new account sign-up offers, which can save you $25-40 per booking, can save you hundreds of dollars on a single trip. Using multiple booking sites (which works especially well on a trip that includes several cities), means you can take advantage of multiple discounts within the same trip.

Couples and groups have an even bigger opportunity to save if each person cashes in a bonus on the trip. Some favorite discount booking sites (along with a new sign-up bonus code!) are,, and AirBnB. Another great source is Hostelworld, which lists affordable hostels and hotels in 170 countries that are especially popular with millennials and budget travelers.

Cutting Down Food Costs

Food expenses add up quickly while traveling so planning ahead and making a few trip adjustments can mean saving big bucks! Shopping at supermarkets and preparing meals at your B&B/hotel allows you to eat at a fraction of the price of restaurants. Carrying snacks like fruit, granola bars, and nuts can help you avoid impulse food purchases in between meals.

Lunches tend to priced lower than dinners so dining out for lunch is a great way to enjoy local restaurants while still saving money.

This lunch special was half the price of the dinner option!

This lunch special was half the price of the dinner option!

Public transportation is cheap - and fun!

Public transportation is cheap - and fun!

Bike share is a great way to explore a city on the cheap!

Bike share is a great way to explore a city on the cheap!

Money-saving Mobile Travel Apps

Dozens of travel apps exist to help you save money on flights and hotels and to do everything from finding bathrooms to streaming audio to your phone from muted TVs in airports. Here are a few of my favorites for finding affordable things to do on vacation.

Groupon offers deals around the world on everything from restaurant meals and hotel rooms to sightseeing tours and comedy shows. Browse offerings in advance to help plan your trip or fill in your itinerary on the ground with last-minute activities on sale! lists thousands of groups around the world that focus on interests ranging from sports and nightlife to food and culture. Their mobile app allows you to browse groups and events going on nearby so you can look up festivals, film screenings, nature hikes, bike rides, and other free or low-cost activities during your trip.

Planning a road trip? Definitely download the Roadtrippers app, which lets you input your starting and final destinations and suggests fun, interesting – and often, free! – activities and locations along the route.

Travel Budget Tips for Families

Setting a budget and having a pre-trip conversation about what your family can afford is crucial to not breaking the bank. Make sure that kids are part of this discussion so they can express which activities are the most important to them. Help them understand that the family may not be able to do absolutely everything on their list but that you'll make an effort to prioritize the activities they're most excited about (assuming it's not a $1,000 private helicopter ride!)

Food costs can be especially high for large families so bringing snacks and establishing rules is especially important. Sticking to ordering “an appetizer OR dessert” or dining out “ONLY once per day” allows for some splurging while setting limits that the entire family can understand and abide by.

Since kids have short attention spans and can complain (quite a bit) when they get bored, bringing their favorite books, toys, or electronics can help keep them occupied instead of forking over money for movies, attractions, and entertainment every day.

Do you have additional tips to share? Please share in the comments below!