Budgeting for Travel (From an Accountant)

Most people and families enjoy taking a vacation every year, but not everybody budgets for it correctly. If you start the year, by budgeting for a vacation and saving, it can make it much more possible to have a great vacation. We will take a look at how you can set a budget for travel, before the trip, and break it down during the trip. This will be one of the most extensive budgets for travel you have ever seen.

palm tree on beach

Making a Yearly Budget for Travel

It’s true, not everyone can afford to take a vacation every year, even though it would be nice. It takes substantial money to travel, and even more when it is a large family. Coming from an accounting background, though we’re here to help you make travel more realistic.

The first place you need to start is by looking at your income and expenses. Travel is certainly a want and not a need. Need should always be paid first. 

One classic rule is the 50/30/20 rule, which has been talked about many times before. 50% of your income goes to needs. 30% goes to wants and 20% goes to savings. Does this mean you can put 30% to travel? Not necessarily.

Once you have made a yearly budget and are convinced that you covered all your needs, you should list out all your wants for the year. Breaking it down month by month can even be more helpful to see your spending habits.

This should give you an idea of where you can cut back or start setting money aside for travel.

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Thinking About Where You Want to Go

The next step and one that can really even be done first is having an idea of where you want to go. Want to take a trip to Colorado? It’s going to be much cheaper than budgeting, to travel to Japan.

Maybe what isn’t realistic in one year is realistic in two years. That’s to say if you wanna take a ferry for a trip or a longer trip you might need to budget longer than expected and that’s OK.  The key is to have an idea of where you want to go, make a budget and stick to it.

Knowing How You Will Get There on Your Vacation

Some people’s travel goal is to take a cruise. Other people like flying to Europe, where the Caribbean and staying at a resort. Maybe you just want to make a small budget and do a driving trip to a few states in the US.

One thing that all of these have in common is, you will need to know how you will get there. A cruise might be your whole vacation but if you are flying, then you will need to budget for flights and maybe even a rental car. These are all things to keep in mind when setting your budget for travel. Don’t worry we cover all of this in our travel budget Excel sheet for you.

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What Should My Travel Budget Include?

travel budget

Once you’ve picked your place, and have an idea of how much you can spend on travel, it’s almost easier to back into the traveler number. You do that by breaking it down in a trip budget.

Your travel trip budget should at the very least include the following:

  • Food/meals
  • Rental cars
  • Lodging 
  • Flights
  • Gas
  • Insurance
  • Miscellaneous 

From there, you are going to want to know how many days your trip will last and break down the cost/budget for each day. 

While we don’t want it to be annoying to be thinking about a daily budget on a vacation, it is the smart way to approach a vacation. A dinner can quickly get out of hand when you budgeted $60 and it is $120. Some people are of the mindset that on a vacation they can spend whatever they want but if that’s the case, why even budget it in the first place?

What are the Benefits of Making a Travel Budget?

Just because you are budgeting, for travel, doesn’t make you stingy. Budgeting is actually a smart approach to vacations and travel. Some of the benefits include-

  • Having an idea of how much you will spend on your vacation
  • Knowing what activities you might do
  • Being able to stick to a certain dollar amount
  • Budgeting for travel helps you stay on track for more travel in the future

Just taking a step back, it’s clear that the benefits outweigh the little bit of time it takes to fill out a travel budget. So what are you waiting for?

Budgeting for Travel: Final Thoughts

If you want to enjoy more trips, more vacations, and more traveling then a budget is the key to success. From an accountant’s perspective, we believe you should have a yearly budget number for travel if you want to travel and a specific budget for your trip. Once you get these in place, travel will become easier and less stressful. Give it a try yourself, and start a travel budget today!

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