Mastering Travel Budgeting: A Step-by-Step Guide for Every Trip

Budgeting can be a little disheartening when thinking about your dream vacation. We believe that doing it right can be very liberating and put you at ease while continuing to plan and while you're on your trip. By skipping this step, you may feel overwhelmed by how you will pay for everything and maybe even not want to spend money while away. Budgeting can also help avoid overspending on vacation and dread coming home to see the credit card bill. Here's our step-by-step guide to help you budget for your next vacation.

Step 1: Get Organized

Having a great spreadsheet or just writing a list of the expected expenses will give you a great starting point on what you may look at spending. Ideally, you will do this before booking anything, giving you enough time to plan accordingly and save extra funds if needed.

Step 2: Make a List

Start by making a list of expenses you plan for your trip, such as flights, rental cars, trains, accommodations, activities, food, entertainment, excursions, souvenirs, etc. We do a daily estimate for food multiplied by the number of days planned for our trip.

Step 3: Research

Once you have a list of your expected expenses, you can research what each of those expenses might cost based on your destination(s). Making a list will help give you a better idea of the total cost of the trip. Each trip will be different. For example, you may spend more on accommodations in a hotel than camping or spend more money on food in one country vs. another based on the latest currency exchange rates.

Step 4: Use Points When Possible

If you are new to travel hacking or using travel points, this can be a great way to cut out-of-pocket costs! We've saved so much on trips over the years by using points. Seeing the difference between the estimated cost and the amount we save after using our points is fantastic. Travel hacking does take a little more time and organization, but once you get the hang of it, it is well worth the extra effort.

Step 5: Start Booking

Now comes the fun part! We recommend starting with booking flights (if needed). Once you have a timeline of when you'll be arriving at your destination, you can book any lodging accommodations, car rentals, or other means of transportation. Finally, start booking any activities, events, or excursions. We tend to book anything requiring tickets up front and early to remove any complications, like ticket lines, when we get there. The earlier you get things booked, the easier it is to stay organized and relieve stress caused by putting things off at the last minute. It can also help from a financial perspective by forecasting and budgeting for anticipated high-cost booking items.

Step 6: Go on Vacation!

Once you've budgeted everything, you can go on your vacation with peace of mind, not worrying about how much you are spending. The last thing anyone wants is to come home from an epic trip, regret not doing an activity that wasn't budgeted for, or worry about an unanticipated high credit card bill. Taking the time and budgeting for your next trip will help you stay organized, not feel overwhelmed, and possibly save money to ensure you get the most out of your vacation.