How to budget for a vacation in 5 easy steps

You’ve been working hard and could really use a little time away. But once you start researching flights and hotels and daydreaming about what to pack, reality hits. How are you going to pay for everything? If your heart is telling you to book that beach bungalow but your head is urging you to make it a staycation, you might be feeling the uncertainty of the economy.

American workers are feeling increasingly stressed about finances.According to research, 51% of US workers say "money/finances" is their top source of stress in life, a substantial increase from 2021 when only 37% said so.¹ In another survey, 43% of respondents reported feeling financial stress on a monthly basis, and one-third indicated that concerns about finances had a significant or severe impact on their mental health.²

With stress levels at a high, a vacation might be just what you need and there are steps you can take to help make it affordable — even when money is tight. Here are five tips to help you budget for your next vacation so you can make the most of your getaway without adding to your money stress.

1. Map out costs 

Start with a fixed budget or calculate the cost of the trip and work backward. Prioritize essential expenses, like hiring a guide for an outdoor adventure trip, and cut costs on non-essentials by opting for low-cost lodging over pricey hotels. If accommodations with a pool and umbrella drinks are non-negotiable, that’s fine too — the point is to decide what expenses to keep and what to cut.

2. Research your destination 

To create a realistic budget based on your destination and activities, research transportation expenses, food and lodging costs, and prices of attractions you want to visit. Once you know the bottom line, start looking for ways to reduce expenses. Experiment with off-peak travel dates and check discount sites to find budget-friendly deals on affordable meals and activities. It might even be possible to find a bargain on accommodations. Once you start deal hunting, you’d be surprised at how quickly you can lower your costs.

3. Start saving early 

Plan ahead and save up over time. Once you’ve determined your budget and expenses, settle on a manageable amount to set aside each paycheck so you have savings on hand. For example, if your vacation costs $2,000, start planning five months ahead of time. Set aside $400 a month (or $100 a week). All this advance preparation may pay off when you realize you’ve avoided going into debt by paying for your vacation outright.

If travel and exploration are your passion, take the next step and create a travel savings fund. By contributing a little bit every month, you’ll build the means for a future destination vacation, and you’ll be more likely to have cash on hand for last-minute getaways and surprise travel deals. Consider automating this! Your employer can deliver a small percentage of your paycheck to this special travel fund with every payday, and you can sit back and watch it grow.

4. Be disciplined 

Set a shopping budget ahead of your trip to avoid impulse buys. If you think something is a “must-have,” keep the price within your budget. There are endless opportunities for frivolous spending while traveling (gift shops, side jaunts, expensive restaurants), so set a daily spending limit and stick to it. You may even want to build a little wiggle room into your budget for spontaneous spending. For example, if your estimated spending budget for a short getaway is $500, rather than telling yourself you’ll avoid any extra purchases, set it at $750 and leave yourself options.

5. Use travel loyalty programs and credit card rewards 

These are valuable tools for economizing or saving for a family vacation. As long as you keep within the boundaries of your normal spending, using rewards cards for day-to-day expenses may provide points that can be applied to lower your vacation costs. Similarly, using loyalty programs for hospitality or airfare could not only help drop the cost of the room or the flight, but provide additional related discounts.

Now that you’ve established your travel budget, you may have some unanswered questions about managing vacation costs. Here are a few more tips for thrifty travelers:

Be aware of hidden fees

Many travelers ask, “Are there hidden fees with travel websites?” The short answer is “Yes, sometimes,” but a more thoughtful response is “They actually aren’t that well-hidden.” So, to make the most of discount sites, be sure to pay close attention to the fine print details, service fees, taxes, etc. before you buy.

Keep the entire family on a budget

Bringing along family members means budgeting for a group, and that can be a challenge. Planning and deal hunting are essential for family travel. Avoid paying top dollar for meals or transportation whenever possible, skip upgrades (unless they’re free!), use local transportation instead of luxury or tourist options. Be sure to investigate “off-season” destinations when they’re offering discounts, and make sure to do your research.

Have a budget backup plan

Let’s be honest, just about everyone has experienced a bout of unplanned overspending. Maybe you left your sunglasses on the plane and the resort where you’re staying only has pricey options available. Or perhaps someone had a moment of weakness in the Duty-Free. Now the important thing is to get the bill under control.

Make sure to pay any vacation-related expenses on time, especially credit card bills, to avoid adding on late fees. When you can, pay your credit card bill in entirety to avoid accruing extra interest on your purchases. And if you overspend on a credit card, retire it — except for emergencies — until you’ve paid off the balance.

Ask a financial professional

If travel and vacations are a big part of what makes your life worth living, I can help you integrate your travel goals with any other emerging priorities, from paying for your children’s school, to buying a home, to planning for retirement. Remember, the key to a rich life is balancing your financial priorities. With hard work and a long-term financial strategy, you may find that you can truly afford to have it all.

Disclaimer:

1 Guardian's 14th Annual Workplace Benefits Study, 2025

2 2025 Employee Financial Behavior Report, Your Money Line, 2025, https://www.yourmoneyline.com/read/2025-employee-financial-behavior-report?submissionGuid=a19d7c82-9989-47a2-8618-6685ab88ae32 

7758929.1 Exp. 4/27 *pre-approved content*