How to Budget Your Next Vacation
Now that the holidays have passed our focus now moves to spring break and summer break. While most of us want to go somewhere for spring break, the reality is that most of us can not afford such an excursion unless we plan for this vacation. Same holds true for those long two-week summer vacations that we all day dream about from 3-5pm on a Friday afternoon when it is raining. If you want to do spring break or that two week long vacation, now is the time to plan.
Here are a few steps on how to budget for that next vacation:
- Plan your spending money – It’s vacation and normally when you are on vacation you relax and open that wallet. The key is to not run your credit cards up to their limits. To control your spending on vacation, bring cash. You should always bring cash for tourist attractions, meals, souvenirs, and any other extracurricular activities. Even bringing envelopes that have been labeled for such items and stuffing them with the budgeted amount of cash will save you big in the long run. Besides, when the kids start screaming, how quickly will you pull out that credit card?
- Do you have any points available – Yes it is popular to travel during the high seasons, Christmas, Spring break, summer, etc. However, check into blackout periods for airlines and hotel point programs to make sure you can actually use them for your trip. It’s important to maximize these points programs because it may leave you with only paying some basic taxes, resort fees, or ticketing fees.
- Decide what you want to get out of the vacation – You want to set the expectations in your head along with your children’s head if possible. Start considering the following: what purpose is this vacation for? Am I making memories for me as a parent why I spend time with my kids? What kinds activities do we want to do on this vacation? If some of these questions go unanswered and you are a people pleaser, like most of us are, you may over spend at a fancy hotel. If you are taking little kids on a trip, don’t get caught up in spending oodles of money at the Magic Kingdom for things that won’t remember. Don’t get me wrong, the Magic Kingdom is fun, but they probably won’t remember 90% of it. The best memories are normally made at the hotel people anyway.
- The money – Vacations should be a line item on every family’s finances, it has to be planned for and budgeted for. We like to plan 2% to 3% of your household income. If your house makes $100,000, then you should plan on spending $2,000 to $3,000. Be careful, if this is not a line on the budget, you will drastically over spend in this category. Once you start pushing to the 5% of household income, you have entered dangerous territory.
Having planned out many family finances over our 15+ years, vacation spending is black hole that you deal with each and every year. Now is the time to make a plan for spring break, summer, and even the holidays. If you don’t, the next article you will be searching is how to get out of credit card debt.
More About Kurt Arseneau:
Kurt has been in the financial services industry for over 15 years. He previously owned 4 companies in the Chicago area that primarily helped financial advisors with marketing and financial planning support. He currently serves as the primary Investment Advisor Representative at Arseneau Advisory Group.
Kurt has been featured in publications with ABC, CBS, FOX, and NBC to name a few. Recently, Kurt became one of the few Asset Lock Equipped Advisors in the country. Asset Lock is a proprietary technology tool used to monitor a person’s 401k, TSP, 403b, IRA, or brokerage account. Arseneau Advisory was built on being Holistic, Unbiased, and a client-first company.
Kurt and his wife Brynn (currently the CFO of Arseneau Advisory Group) live in Cumming with their 3 daughters. In their spare time, they volunteer at church, love to travel and spend time with family and friends.
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