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Vacation budgeting: 5 ways to avoid overspending 

What we'll cover

  • Tips to not overspend while traveling

  • How to spend your money strategically on vacation

  • Why you should build a cushion into your budget

You’re sipping a frozen cocktail on the beach. Or maybe you’re exploring quaint city streets. Perhaps you’re gearing up to hit the slopes. Whatever the destination, you deserve to enjoy the break from your day-to-day responsibilities and stressors. 

When it’s time to lean into your wanderlust, the last thing you want to worry about is your credit card statement or bank account balance when you get home. With a little before-trip budgeting and a plan for saving and splurging while you’re away, you can relax into your travels and not worry about how to avoid overspending while on vacation. 

Spend strategically

You’ve worked hard to save up for a trip. While it may be tempting to spend indiscriminately once you’re there, resist the urge with some strategic planning. Before you head out, break up your vacation budget into needs and wants.

Needs vs. wants

Needs include things like:

You’ll typically know the approximate cost of your hotel or rental ahead of time, so it’s easy to allocate a portion of your budget. To plan for meals, consider setting a daily limit for spending on food, which can include restaurants and groceries. If you’re flying somewhere, be sure to plan for transportation to and from the airport as well as a rental car if necessary. 

Other parts of your vacation may fall more into the wants category. For example:

  • Tours

  • Outings

  • Excursions

  • Souvenirs and shopping

To keep from overspending, plan ahead for activities that cost money and, when you can, book things in advance, like museum tickets, scuba lessons or segway rentals. Also, look for free things to do, like walking tours, hikes, public beaches or sightseeing. To keep your spending in check for your other wants, write down a budget you can refer to while you’re away. 

Pick your priorities

You have more control than you may realize over the price of your trip depending on when, where and how you travel. Really, it’s all about priorities and creating balance between spending on what matters to you and pulling back on what doesn’t. 

For example, depending on the type of trip you’re taking, you might consider scheduling it during the off-season for lower airfare and hotel prices. Or skip the flight altogether and take a road trip. If you have an action-packed itinerary and your hotel will just be a place to sleep between adventures, you could save by booking lower-priced accommodations. 

Then again, maybe a beachfront view is a must, but you’re happy to make some of your own meals to save money. By identifying what you care most about, you can save smartly without cutting back on your enjoyment.

Make an itinerary

To create a realistic vacation budget that won’t lead to accidental overspending, it helps to map out your days and account for your anticipated associated expenses. While you plan, figure out how many meals you’ll need total, then decide which ones will be out at restaurants and which ones you’ll prepare yourself.

You should also look up the price of tickets for attractions and activities, and be sure to account for transportation. You don’t have to plan every moment, but plotting out costs ahead of time can save you from surprises and budget busters.

When building an itinerary, look at the locations of your must-dos, eats or visits. Schedule activities and meals that are near each other on the same day so you can spend less time going to and from places (and save on transportation).

Build in a cushion

Remember it is vacation, so it’s unlikely you’ll be able to anticipate every dollar you’ll spend (spontaneity is the spice of life, after all). Instead, budget some cushion money above and beyond the costs you plan for. This extra cash can come in handy when you spot an item in a local boutique you just have to have, or when you want to leave an extra tip for a great tour guide. Planning for those spontaneous moments can help minimize stress over extra expenses as they come up. 

Keep in mind that it’s also a good idea to budget some money for the unexpected , like fees that can add up when traveling abroad . Plus, you never know when you’ll have needs in a pinch — like a ride home if you’re out late and far from your hotel or a bottle of medicine for a bout of motion sickness. 

Pause spending at home

The good news is that while you’ll be spending on vacation, some expenses you’d normally incur might go on a hiatus. Avoid accidentally overspending by prepping your home for your absence: set the thermostat appropriately, turn off lights and unplug appliances. If you have any food or meal kit deliveries, be sure to pause them. 

If you’ll be traveling for a longer time period, think about areas where you may be able to benefit from pausing services . Consider skipping a month of your gym membership or suspending some of your streaming services. You could even sublet or host a vacation rental if you’ll be away for a few weeks. Finding small ways to save on your home expenses can boost your vacation budget and keep your finances on track while you travel.

Budget for your dream vacation

Travel can help you rest, recharge and broaden your horizons — but you don’t want to taint the memories of a wonderful trip by coming home to a bank account in the red. Avoid overspending with a little forethought and planning, and you can set yourself up for a vacation that fills your cup without draining your finances.

Ready to plan your next trip? Smart savings tools, features of Ally Bank’s Savings Account can help you save for your next travel adventure today.

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