How to Budget for Upcoming Travel
Lindsay Silberman shares advice on how to budget for upcoming travel and plan for vacation-related expenses
February 23, 2024
Written by Lindsay Silberman
So you finally decided to start planning the trip that’s been on your mind forever. You can already picture it! There you are, settled into your lounge chair, toes in the sand, soaking up the sun. But then the harsh reality hits you: how much is this going to cost me?! And how am I going to afford it?
Whether you’re splurging on a once-in-a-lifetime vacation or traveling on a shoestring, creating a budget for an upcoming trip is a crucial part of ensuring a memorable, stress-free travel experience.
Why, you ask? Well, for starters, it’s always wise to make sure we’re spending within our means. Doing proper research and budgeting ahead of time minimizes the likelihood that you’ll leave your vacation with a pit in your stomach, knowing that you spent more than you anticipated.
But for many people—even those who travel fairly often—it can be difficult to know where to start. Here’s how to budget for an upcoming trip so you can enjoy your vacation worry-free.
Start with what you’re able to comfortably spend
Before you can accurately start budgeting for a trip, it’s important to have a realistic idea of what you’re able to spend on it. Once you have that number in mind, here’s a quick and easy way to determine your budget:
- Write down the total amount you’re able to spend.
- Subtract the cost of all major expenses you’ll incur for the trip (like airfare, other necessary transportation, and accomodations.)
- The number you’re left with will be your budget for all miscellaneous expenses like food, drinks, and activities.
- Divide that number by the total number of days you’ll be traveling.
- From there, you’ll be left with your “daily budget.” If the number seems too low, you may want to reconsider the length of the trip, or choose different accommodations.
Setting realistic expectations for what you’ll be spending each day is crucial. While $150 per day would likely be more than enough in some places, that amount might not even cover the cost of breakfast in others.
If you’re in the early phases of trip-planning and budgeting and you’d rather start by estimating what your dream trip will cost so you can start saving from there, that’s fine too! You’ll find more tips on that below.
Consider the cost of transportation
Since transportation to and from your destination will likely represent a large portion of the overall cost, you’ll want to create an estimate of what to budget for it. Flight or car rental prices may also be a factor in determining whether or not the destination is even feasible based on what you’re hoping to spend overall, and they might factor into what you can spend on accommodations, too.
For example, if you were hoping to plan a beach vacation over Thanksgiving but haven’t yet decided where to go, you might be surprised to find out that a flight to one popular beach destination might cost you more than double what a flight to a different, equally popular beach destination would cost over the same dates. If you opt for the destination that’s cheaper to get to, perhaps that’ll give you the flexibility to put more budget toward your hotel or a higher-end dining experience.
If you have credit card points and miles, look into whether redeeming them for your flights makes sense (or if you’d get more value out of redeeming them for lodging instead.) I’ve personally used my Capital One Venture card rewards to cover the cost of an Airbnb, which ended up being a major win. I’d also recommend using the Capital One Travel portal to set price alerts for any upcoming flights you may be considering.
Consider the cost of accommodations
Once you have the destination in mind, do some research to determine what your lodging options are, and use price comparison websites to see what deals are available.
If you’re traveling with a large group, you might find that renting a house or villa is a better option than a hotel. It’ll also give you access to a kitchen, if you’d prefer to prepare some of your own meals to save money.
Think about how much you’ll spend on food and drinks
Speaking of meals… estimating what you’ll spend on dining is one of the most important parts of budgeting for a trip.
Imagine showing up to a resort without having done your research, only to find out that everything on the menu is way outside of your budget, and the food options off-property are fairly limited? That’s not the way any of us would want to kick off a vacation.
If you’re heading to a city, think about how you plan to dine. Will you grab something quick and casual for breakfast and lunch, or spend a bit more on a sit-down dinner?
If you’re heading to a resort where you’ll be spending most of your time on property, you might want to consider a rate that includes breakfast. It also helps to get a sense of how much room service costs, if that’s something you plan to do.
Do a quick search to look at menu prices of restaurants that might be on your radar. What would you order, and what would your total bill come to?
Add up additional expenses for activities, souvenirs, tips, etc.
This part is usually the hardest to estimate, in my opinion, but it’s still incredibly important to consider. If you’re planning to take tours or excursions, visit museums, or do anything experiential that isn’t free, you’ll want to incorporate those costs. The same goes for getting from point A to point B—will you be taking taxis, private cars, or public transportation?
Perhaps you hadn’t planned to buy anything, but you stumble upon something that you absolutely fall in love with. Plan for that in advance by allocating a budget to it.
One thing I find that many people forget to budget for is gratuity. In hotels, you’ll want to leave cash tips for housekeeping, and if you’re staying at a higher-end property with bellmen and a concierge, you’ll likely want to leave tips for them as well.
Add a “worst case scenario” cushion
One thing you absolutely do not want to do when budgeting for a trip? Leave yourself with zero wiggle room. While we never want to go into a vacation assuming the worst, things do happen. Make sure that your budget includes enough padding so that you’re not stuck in a pinch.
It also helps, as a general rule, to overestimate your expenses rather than underestimate them.
No matter what your budget is or where you’re headed, having a plan in place is the key to a fulfilling (and stress-free) travel experience. Bon voyage!