Episode 61: How to Budget for Vacation

How to Budget for Vacation

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In today’s episode, I need to talk about vacation budgets.

If you don’t know how to budget properly, it can have serious consequences on your finances. Not everyone’s money has no limits, and the thought of a more-than-average vacation could seem out of reach for many people.

As a travel agent, I start things off by asking about my clients’ budgets. Why? So that I can make that budget work for the kind of vacation that you want to have. I’m not here to max out your budget, trust me.

But it’s also about being realistic. You need to know your money.

Today, I’m going to give you the tips and tricks that you need to implement in your vacation planning so that you can have that luxury beach hotel vacation in a room with a sea view.

Here we go:

[04:29] Don’t go into debt for a vacation.

Many first-time travelers don’t know about the consequences of a vacation on their finances.

Before you book that vacation, let me tell you that you do not want to pay for it using a credit card if you can’t pay it off immediately. You also don’t want to be stuck with payments due on the vacation after it’s done. The interest on those payments can be steep,

If you’re unaware, here’s something that many people don’t think about: you can start paying for your vacation before you head out. If you start early enough, you can ensure that your options are payable in cash. That way, you know you’re able to afford it without the consequences of getting into financial trouble.

Planning ahead of time will also help you with this. Vacations that include air travel can be planned up to 10 months in advance. Most cruises can be planned up to 2 years in advance. Take advantage of this timeframe so that you can have the type of vacation that you want to have.

[07:01] Start making payments early.

If you want to know how much time you have to make payments towards your vacation, look at when your deposit is payable, and then look at how many paydays you have between your deposit date and your vacation starting date.

It also helps to start paying well in advance because then you can control how much you will have to spend during your vacation.

For example, I know I get paid every 2 weeks. If I start 10 months in advance, I can split the total into 20 smaller payments that won’t break my bank but still guarantee the kind of vacation that I want to have.

Making regular payments requires you to be disciplined and dedicated to the days that you chose to make the payments. This will ensure that your budget remains current.

[08:49] What is your maximum spending limit?

The benefit of starting your payments early is that you can make smaller payments.

If you’re signing up for a vacation that costs thousands of dollars, and you’ve given yourself 2 months to pay for it, you need to be able to afford those higher payments.

I know you want to have a luxurious vacation, but you need to be honest about what you can and can’t handle. You might be able to afford it if you planned it far enough in advance, but you need to set that limit for yourself.

Don’t try and stretch your money further than it can go. The debt is not worth it.

[10:10] What are your other expenses?

Not everyone goes to an all-inclusive resort.

If you’re one of those people, you need to know what your excluded costs are. You need to know your food and drink expenses, transportation, tourist activities, and possible medical costs. Nowadays, you need to also budget for Covid tests and possible quarantine expenses.

Staying at an all-inclusive resort can be helpful to have a more accurate estimate of your expenses, but I still suggest you consider any other expenses that may come up during your stay.

Once you put together a budget that includes these costs, you can start to plan your payments to accommodate those extra expenses.

[12:29] Work with a travel agent.

Everything you need to know about your vacation, you can get from a travel agent.

We know what we’re doing. We know how to maximise your vacation with what you’ve got. Our job is to help you have the experience you want.

You don’t have to go into debt trying to do this on your own. You don’t have to be surprised by all the extra costs that you didn’t know about. You don’t have to be paying on a vacation long after you’ve returned.

I hope this episode has helped you how to budget for vacation and how to become more budget-conscious, and also given you the motivation to have that ultimate vacation experience – even if it means you need to start paying for it a year in advance.

Live your best life without debt.

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