The year has only just begun and though the weather outside is still wintry, now’s a good time to start thinking about your savings goals for the year. For many, a summer vacation might be a top priority.
A good summer trip takes careful planning and budgeting. Here’s a step-by-step guide for planning a fun but financially responsible summer vacation:
Set a budget
Before you begin, you need to know how much money you’re working with. Since you’re starting well in advance, you have plenty of time to save. Take a close look at your income, your necessary expenses and your spending habits. Calculate how much you can afford to set aside with each paycheck.
Let’s assume a vacation budget of $1,050. That’s how much you’ll save if you set aside $50 each week from the first week of February until the last week of June – 21 weeks in all. You can adjust this to suit your household budget or add it to existing savings you already have earmarked for a vacation.
Now, you can determine what percentage of your budget you want to spend on each aspect of your trip. Consider:
- Attractions or events.
- Souvenirs or gifts.
The Muse suggested dedicating one-quarter of your budget to travel, another quarter to food, 40 percent to lodging and the remaining 10 percent to activities. If you do this, the breakdown for our $1,050 budget would look like this:
- Travel: $262.50.
- Lodging: $420.
- Food: $262.50.
- Attractions or events: $105.
Depending on where you go and what you do, you can adjust this accordingly.
Choose a location
Once you have a budget to work with, you can start planning the trip. First, keeping in mind your travel budget, determine where you can afford to go. For $262.50, you may be able to secure a ticket for a domestic plane, bus or train trip. Or, it can go toward gas for a road trip.
Keep in mind that you’ll need some leftover transportation budget to get around your destination. According to Value Penguin, these are the average annual travel expenses incurred after arriving at the destination:
- Parking: $172.
- Taxis: $119.
- Tolls: $71.
- Local transportation: $202.
Find a place to stay
Now that you know where you’re going, you’ll need to find a place to stay. Your general options are hotels, hostels or home-sharing services. Check out each option to see which is most affordable. Also compare:
- Amenities, like free breakfast or a shuttle to the airport or city center.
- Distance from the city center or airport.
- Distance from attractions or events.
- Safety in the surrounding neighborhood.
A home-sharing arrangement might be more economical, but if it’s in an unsafe neighborhood, you’d be better off paying the extra money for more secure lodging like a hotel.
Decide what to do
After you have transportation and lodging secured, you can start the fun part: Planning what you’ll do.
Look up the city’s events website to see if there’ll be any events, like concerts, festivals or parades. Check out popular attractions, like parks, museums or hiking spots in the area. Determine how much each of these may cost.
Remember, some parks like state or national parks might charge an entrance fee, while some museums are free to the public, like the National Museum of American History in the District of Columbia.
This is also a good time to determine top restaurants in the area. Make a list of eateries you want to experience, noting where they are in relation to the attractions you’ll be visiting. Make reservations if necessary.
Revise your budget and start saving
Now that you’ve planned out your trip for the most part, you have a more realistic idea of how much you’ll actually spend.
If you’re under budget, congratulations! You’ve planned an affordable vacation. But that’s no reason to slack on your savings goal; if you have a surplus, hang onto this until after the vacation is over. It’s always a good idea to have a safety net in case something happens, like if your car breaks down or you miss your bus ride and need to pay for another night in a hotel.
If you’re over budget, you’ll have to either rethink how much you can save, make cost-cutting changes to your plan, or do both.
Keeping your vacation savings in a dedicated account is a good way to separate this money from your everyday funds. If you keep it in a savings account, you can add to it regularly and earn interest on the money you have stored.
Bank Midwest can help you open your savings account so you can start setting aside money for your next trip.