Putting a vacation you cannot afford on credit cards ranks as one of the biggest financial mistakes you can make. Coming home to bloated statements keeps you from saving for your next trip or having the money to spend on necessities. And with credit card interest, the trip ends up costing significantly more. To avoid these pitfalls, put together a travel budget you can stick to. Start your planning on DexKnows listings for hotels and lodging, as well as other travel services.
Start by deciding where and when your next vacation will be, then price the travel costs for the following:
Research fares for every transportation aspect of your trip, including air, train, bus, rental car and taxi, if applicable. You typically can search for air and train fares up to a year in advance. Bus and taxi fares typically won’t rise or fall between now and then. Total all expected transportation expenses.
Hotels and Lodging
Shop room rates according to previous accommodations. For example, if you typically stay in standard rooms at moderately priced hotels, price similar rooms for your vacation. Note the difference between weekday and weekend rates. Total all expected hotels and lodging expenses, including taxes and resort fees, service charges, etc.
Research restaurant options in your destination city. Most restaurants post full menus with prices online, allowing you to get an initial idea of what eating out in a particular city will cost. Factor in your daily dining habits, such as whether you typically eat a full breakfast or grab a cereal bar to go with coffee. Total all expected dining costs for an average day, then add up for the entire trip. If you plan one night at an upscale restaurant, be sure to include that too.
Find out the admission costs to all of the attractions and events on your must-do list. Museums, theme parks, teams, spas and theaters all will list ticket prices online. Some offer discount prices for two or three-day passes. Some places have citywide passes for cultural events such as museums. Total all expected entertainment expenses.
Other Travel Expenses
Factor in travel insurance, tips for staff at hotels and lodging, as well as the cost of Internet access by both computer and phone (beware of roaming charges). When traveling to another country, you can easily rack up a phone bill in the hundreds thanks to roaming and data fees. Also include at-home travel expenses, such as house or pet sitting and airport parking. Total all other expected travel expenses.
Once you have all of the above, figure the grand total and divide by the number of months you have remaining until your planned vacation dates. That amount represents what you must save each month toward your travel. Consider opening a separate savings account to stash the funds so you won’t be tempted to borrow for other expenses.
If the monthly amount proves too high, look for ways to save on travel, such as opting for rental property—vacation rentals instead of hotels—which can lower the cost per night by allowing you to split accommodations with friends and family and to eat in more than out. Check out this Five Ways a Vacation Rental Saves You Money article for more information. Also read Five Hidden Discounts to Ask About When Making a Hotel Reservation if you simply must stay in a hotel when traveling.
One last tip: If your vacation plans will take you out of the country, remember to check conversion rates to see how far the U.S. dollar will go. You can’t predict exchange rates far into the future, but knowing the current rates will help you budget accordingly. Also, many credit cards will add a foreign transaction fee, generally between 2 to 3 percent.
DexKnows travel and tourism listings can help you with all of the above research, as they include information about hotels and lodging, car rental, tours and vacation packages, as well as other travel services.