Yea for Vacation… But How Do I Pay For It?

There is nothing that will kill your joy and memories that you made on your vacation like coming home and having to sit and figure out what your vacation actually cost. It’s so fun while you are there, eating out, buying souvenirs, enjoying yourself, but coming home and seeing the collateral damage is no fun at all. It tends to suck the joy right out of your trip, and can even keep you from wanting to go again, or at least it makes vacation seem really difficult and unattainable. I don’t have all the answers to this little dilemma, but I do know that budgeting can go a long way to relieving the financial stress that a vacation can bring. When the whole point is rest and a break from the ordinary, worrying and stressing about finances can sabotage your entire experience.

So the first step to having a financially happy vacation is to have a plan in advance for how you are going to pay for it. Let me just say, a vacation does not have to cost a lot of money. You don’t have to go to the Bahamas or Disney World in order to have a vacation, but even if your vacation is just going camping with your family… you will spend money. It is amazing how even little trips require extra gas money, money for weird food situations (you will probably eat out, or not have the convenience of a kitchen and so will spend more), and just strange fees like parking fees, or developing your pictures afterwards. It always surprises me how it adds up. And yet, really it is worth every penny.

A plan for vacations means that you need to think in advance with your budget. Matt and I put money aside every month as part of our monthly budget towards our vacations. However, I have to be honest, most of our vacation money comes from either side work as part of our percentage plan (see my blog Power of Percentages), and some from our tax return. There have been many years where we have done “stay at home” vacations, especially after babies are born. Last year some very kind people loaned us the use of their lake house and we were so blessed to be able to vacation very inexpensively. There are a lot of ways to vacation cheaply, but you might just need a little creativity and a lot of flexible. When we were paying off our credit card from Noah’s birth (I tell the story here), we didn’t take a big vacation. We took time off, but the resources just weren’t there to take a vacation, so we just made the most out of what we had. That might need to be your plan for vacation this year as well, but including the cost for vacations in your budget will help to make a way for your vacation dreams in the future.

So lets say that every month you have been putting aside $100 into a savings account towards a big vacation. You might add some more if you get a bonus at work, so lets say that you have $1500 to go on vacation. The first thing to do is to make a list of all the expenses that you might incur in reaching your destination and staying there. Your list might look something like this:
Gas $ = mileage to/from your destination (divided by) mileage you get per tank (multiplied by) your average cost to fill a tank = cost for gas
Airfare = Isn’t flying fun? I used to love it as a child, but they have definitely done everything in their power to make sure that no one enjoys it anymore… but it does get you there quicker…well, sometimes.
Hotels = average cost x the number of nights you are staying
Food = allowance for food per day (breakfast, lunch, dinner, and don’t forget snacks and drinks because they are super expensive if you don’t plan ahead – I am always extra thirsty when I am traveling!)
Entertainment = cost of whatever you are going to be doing (Zoo costs – like the cost of Ava getting to feed the birds (see pic at the top), movies, horse back riding, ski equipment, whatever else… you get the idea : )
Shopping money = lets face it, you will go shopping and might even feel the urge to buy some strange souvenir that will probably end up in your garage sale.
Weird expenses = this is the category that is so hard to predict and so often sabotages your budget… so beat it and add at least $100 to what you are think your vacation is going to cost in order to cover weird fees or purchases (maybe not so much if you are going camping because there is nothing to buy, and maybe a lot more if you are going to Disney World)

You now have a guestimate of what your vacation is going to cost you. Now, you can either choose to put your vacation on your credit card and pay for it when you get back, or you can just put your hotels and pre-purchased items (like tickets) on your credit card or bank card and then take cash or traveller’s checks for the rest. Matt and I have used our credit for vacation and we have done the cash system. I think they both have pros and cons. I love the cash system because you know when your cash is gone and you don’t have to come home and figure out what you spent on your vacation, you already know. However, this might mean you are carrying a lot of cash with you which is also not that great of an idea. If you are nervous about carrying cash, you might consider using traveller’s checks. That way, only you can use your money and they are insured if they are stolen. However, they can also be a huge hassle (to me anyway).

I love the credit card plan because it is very convenient. It also allows you to disconnect from your finances and just enjoy your vacation (which can also be dangerous to your budget). It is much easier to swipe your card at the gas pump, and there is no danger of getting your cash stolen. However, with credit card, you have to come back from vacation and enter all your receipts in, or wait until they all “hit” on your account to see what you spent on your vacation. It is this process that to me steals so much of the joy from what you just experienced. It is the “reconciling” of your vacation.

Either way (using cash or credit card), you are going to enjoy your vacation so much more and be able to relax so much more knowing that you do have the money set aside for your vacation. You are not going into debt for it, you are enjoying the fruits of your labor from the year and investing in your family, and in your own health and sanity. I honestly am not sure of the “best” way to pay for a vacation. I think it comes down to what is the most relaxing for you, but just have a plan in place and realize that you can’t escape money, even on vacation. So you might as well make your vacation budget as well managed as possible so that your vacation doesn’t become a headache and a burden after the fun is done.

I hope this blog has helped a little bit in trying to plan for vacation and taking the financial burden off of what is supposed to be a time of rest for you and your family. I think I will do one more blog tomorrow on some practical tips for getting away inexpensively. If any of you have any tips that you have found useful, please feel free to comment and I will add them to my blog tomorrow. God bless, and may your vacations be everything that you dream of, with no financial hangover.