So, youâve got that next vacation destination in mind (the one youâve been daydreaming about for months now đ). But be honestâhave you actually sat down and created a budget for it? If not, donât worry, youâre not alone.
Hereâs the scoop: Most people pick their dream destination first, but only a small percentage actually budget out what itâll cost. And even fewer travelers stick to that budget once the vacation kicks off! In fact, 68% of Americans overspend on their vacations, according to the Detroit Free Press. đŹ The culprit? A lack of realistic planning.
Letâs Set You Up for Success! đŤđď¸
As your trusted travel advisors, our mission is to help you enjoy your vacation without stressing over unexpected expenses. So, how can you plan a budget that actually works? Letâs break it down with some easy, actionable tips. And trust me, by the end of this, youâll feel much more confident about keeping your vacation spending in check.
Step 1: Setting Your Total Travel Budget đ§ł
Before diving into the details, itâs essential to figure out your overall budget. A simple rule of thumb: allocate 10% of your annual income to travel. Most Americans typically spend between 5-15%, so this is a good starting point. Whether youâre using an annual bonus or setting aside a little from each paycheck, this approach helps ensure your dream vacation doesnât turn into a financial headache.
If youâre planning more than one trip per year, divide that total budget accordingly.
Step 2: Research Your Destination đ
Now that youâve got a number in mind, letâs think about where youâre going. Knowing a bit about your destination helps you budget more accurately.
- Have you been there before?
- Whatâs the cost of dining, activities, and transportation?
Weâre here to help with all this! If youâre unsure about the costs, your Infinite Moments Travel advisor can provide you with a realistic breakdown based on your destination.
Step 3: Allocating Your Budget Using Our Modified 50/30/20 Rule đ°
To keep things simple, we love using a travel-focused version of the 50/30/20 rule. This method breaks your budget into three main categories to prevent overspending:
50% â Transportation & Accommodations
- This covers airfare, hotels/resorts, car rentals, gas, and parking. Since this is typically the biggest chunk of your budget, itâs also the easiest to plan for in advance.
Pro Tip: Given the current state of air travel, itâs smart to overestimate this part of your budget.
30% â Food & Activities
- This includes dining out, groceries, tips, snacks, drinks, excursions, and tickets for activities. This category is where many travelers tend to go overboard, so make sure you do your research. Some destinations have higher dining costs, so be prepared!
Pro Tip: Allocate a bit extra for spontaneous activities or those âonce-in-a-lifetimeâ experiences you might discover while there.
20% â Incidentals
- This covers the often-overlooked expenses: travel insurance, baggage fees, resort fees, passport renewals, souvenirs, and tips. Be sure to budget for the unexpectedâtrust me, youâll thank yourself later!
Pro Tip: Plan to have $50-$100 in cash per day for tips and smaller purchases.
Step 4: Donât Forget Your Emergency Fund đ¨
One more thing that often gets overlookedâan emergency fund. While we always recommend travel insurance (and we include it in our budget estimates), itâs also wise to have some extra cash set aside. Think of it as your âjust in caseâ stash for mishaps like a lost passport, a phone that takes an unplanned swim, or any other unexpected situations.
The beauty? If all goes smoothly and you donât end up needing it, youâve already got a head start on saving for your next adventure! đ
Additional Sample Budget Breakdowns
For an annual income of $80,000:
Total Travel Budget (10%): $8,000
- Transportation & Accommodations: $4,000
- Food & Activities: $2,400
- Incidentals: $1,600
For an annual income of $50,000:
Total Travel Budget (10%): $5,000
- Transportation & Accommodations: $2,500
- Food & Activities: $1,500
- Incidentals: $1,000
Adjust these numbers based on your unique travel plans, and donât hesitate to reach out if you need help refining your budget!
Need Help Planning Your Next Vacation? Weâre Here for You! đ´
Feeling a bit more prepared? Awesome! If you have questions about budgeting or want personalized advice on planning your dream getaway, letâs chat. Your vacation consultation is a perfect opportunity to discuss your goals, budget, and any lingering questions.
đ Schedule your complimentary consultation here and letâs make your next vacation stress-free and unforgettable (in all the best ways)!