Ready for your trip? Have you made your travel budget?
When you go on a trip you probably spend some time thinking about what you’re going to wear.
What you’re going to do on the trip.
Maybe even where you want to eat.
But, did you create a budget for your trip?
Creating a travel budget is one of the many financial hacks to ensure that you have a
A vacation or trip is all about enjoying your time traveling.
So, why not remove one more piece of anxiety by knowing how much you’re going to pay for the vacation.
In the this post will discuss three reasons why you should have a travel budget:
- You’ll remain conscious about your spending
- It will be easier to maintain your overall budget
- You’ll get the most out of your trip
And, we’ll cover the steps to building your travel budget:
- The five main categories
- Where to start
- Allocating funds to each category
- Updating your budget
After you’re finished creating your vacation budget, you’ll be even more excited knowing that you don’t have to worry about money.
Why You Should Have a Travel Budget
You’ll Remain Conscious About Your Spending
When we go on vacation or on a trip, we can end up forgetting about the real world.
Maybe it’s for a few weeks or maybe just a few days.
But, we start to focus on the right-now the more we get sucked into vacation mode.
We may end up spending money on stupid shit that we don’t need.
Doesn’t it always seem like you find yourself in a mall or shopping area when you’re on vacation?
A vacation can lower you spending-inhibitions.
But, a trip budget can help to restore some of those inhibitions so you don’t spend extra money.
If you already know that you’ve allocated $XX or maybe $XXX each night for drinks, you’re more likely to end up around that amount.
When you have a travel budget, you have spending targets that you’ll be conscious of for the trip.
It Will Be Easier to Maintain Your Overall Budget
Your budget was going great.
All of your credit card debt was paid down and you even saved some money to put in an IRA.
But, then you went on vacation.
Now, you’re looking at another credit card balance and the need to make drastic changes to your budget.
Without a travel budget, you can seriously mess up your overall budget.
But, when you budget for a vacation it can help ensure that your overall life budget remains good.
You’ll Get the Most Out of Your Trip
You probably think budgets and vacation don’t spark much joy together.
But, that really just depends on how much you want to spend.
If you can only spend a certain amount, it’s better to prioritize the things that you actually want to do.
You can even have a better trip with a budget because you’ll actually think about where you want to spend your money.
Rather than just spending money as different activities or options come up, you’ll think about all the different options first.
Then, you can choose the ones you find most enjoyable and are the best value for your money.
How to Create a Travel Budget
If we’ve convinced you that you should have a travel budget, it’s time to actually figure out how to build one.
It’s pretty simple but does require a different mindset than with your life budget.
The Five Main Categories
Your life budget may have all kinds of different categories.
A travel budget only has five categories:
- Transportation
- Lodging
- Eating
- Entertainment
- Keepsakes
Not too bad, right?
All you have to do is figure out how much you want to spend in those categories and you’re good.
Where to Start
You may just want to jump in to one of the five categories for your vacation budget.
That’s not how you should start though.
Start with how much you want to spend for the whole trip.
This amount may and likely will change but before you do anything, decide how much you want to spend.
When you do this, you anchor yourself to the that number.
That way, you shouldn’t go too high or too low above that amount.
Allocating Funds to Transportation and Lodging Categories
Once you have how much you want to spend, it’s time to allocate how much you’re going to spend to each category.
Some of the categories will be easy to figure out how much you’re likely going to spend so you should start with those first.
Your transportation and lodging expenses are likely the two categories that you can do some research and figure out.
They’re also the best to start with first because the amounts for the two categories are not likely to change that much.
With transportation you can look up flight costs or estimate gas mileage to get a good sense of the transportation costs.
For lodging, you can also do some research to figure out how much it’s going to cost to stay wherever you’re going to visit.
You may even want to book these two expenses and have a budget just for the other three categories.
Still, you should think about how much you’re spending for the whole trip though.
It may feel better to think about a trip only costing $2,500 but if the flight and hotel cost another $2,000, it doesn’t do you any good.
Allocating Funds to Other Categories
Now that you know how much it’s going to cost to get there and stay there, it’s time for the fun stuff.
This is really where you have control over how much you want to spend.
You can only spend so little on a hotel or flight.
But, you can be super creative with how much you want to spend on food an
Maybe you’ll spend really cheap on most meals but then have a few extravagant meals.
It’s all up to you.
Maybe most of the activities you’re going to do are free or involve eating.
If you’re a minimalist, you may not even need the fifth category, just focusing on the experiences.
You should split the remainder of your budget up into the three categories: eating, entertainment, keepsakes.
Updating Your Budget
As you start to make purchases and reservations, you should update you budget.
That way you can see if you’re going to go over budget or you might have some extra money to spend in another category.
As you’re making purchases you should be able to then make decisions about your next purchases.
Maybe you decided not to do this or that activity so you can spend more on drinks or dinner.
Without a budget, it can become a guessing game.
Final Thoughts
A goal of a vacation budget is to keep you from spending too much money.
But, the main goal is to spend enough to have the best time you can without regretting it financially later.
If you spend some time now thinking about how much you want to spend on your trip, you won’t be worrying about spending too much in the moment.
Or worse, you arrive home from your wonderful trip only to regret spending too much money.
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