How to Take a Break Without Breaking the Bank

At an average of 1,750 hours per year, Americans work more than the citizens of almost any other developed nation. That works out to 10 more weeks than the average German worker! With such long hours, it’s important to take vacation time to give us a break from our dedication to labor.

While vacation is supposed to be relaxing, it can instead be the opposite if it causes financial stress. That’s why it’s essential to carefully plan for your vacation as you would any other significant expense, making sure your trip’s spending is budgeted thoroughly.

Set savings goals

How fun would it be to drop everything on impulse and jet off to a tropical paradise or a ski holiday in Colorado? But such unplanned vacations can cause more stress than they relieve.

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Traveling with little planning makes it nearly impossible to determine a budget for the trip, which means an increased chance you’ll spend more than you can comfortably afford. Instead, consider the trips you’d like to take. You can plan many shorter, domestic trips without much lead time, but if your destination is overseas, it’s prudent to begin planning much earlier.

It’s important to determine how much the entire vacation is likely to cost, including airfare, lodging, meals, ground transportation, souvenirs and special experiences. Once you have a ballpark figure on how much your trip will cost, you then have a savings goal to begin working toward.

Having an idea of what your vacation will cost and saving that money ahead of time means you can have a stress-free trip rather than sweating the finances.

Avoid debt

That advice might seem fairly obvious. However, 18% of people who vacation at one of the Disney theme parks go into debt to do it. If that figure seems astonishing, it is. But perhaps more astonishing is the income demographics of people taking on debt to vacation at the House of Mouse: 26% of Disney vacationers who make at least $100,000 per year fund their trip with debt, vs only 12% for those making between $35,000 and $49,999.

In short, higher-income people are paying more to go to Disney because they’re assuming interest payments in addition to the cost of admission! Especially when you realize credit cards are commonly charging more than 20% interest, and in some cases higher than 30%, debt-vacationing is a recipe for financial stress during and after your trip.

Be flexible

Budget for more than you expect the vacation to cost. Airline tickets can fluctuate dramatically. In some cases, the same seat on the same plane can be hundreds more on one day than on another. With some budgetary flexibility built in, you can take the sting out of unexpected fare increases.

Being flexible works the opposite way as well. If an aspect of your vacation is significantly more expensive than you’d planned for, and paying that extra money would put undue strain on your finances, be prepared to cancel or delay your trip.

It’s better to move a trip to the next year than it is to take on high-interest credit card charges because you feel you have to stay committed to taking that trip on time.

Don’t plan alone

Your family vacation won’t be a solo trip, so planning for it shouldn’t be done alone either. Everyone going on the trip with you should be involved in the planning process. This is particularly important when children are involved.

Any parent knows that vacationing with children involves an inevitable deluge of purchase requests. Your children will probably want at least one thing from every souvenir shop. If there’s an up-charge ride at a theme park, they’re almost certain to want to ride it. Even meals at restaurants will likely involve requests for extras, like special desserts.

By involving your child in the planning process and explaining what the daily budgets for meals, souvenirs and other purchases will be, the child becomes an active participant in keeping the vacation on budget. That not only helps limit drama when the child is denied a request, but it’s also an important opportunity to teach valuable financial skills that will help them throughout their life.

By pointing out that skipping a souvenir they’re only slightly interested in will leave more money in the budget to get something they really want later, you’re teaching them the concepts of opportunity cost and restraint. Just internalizing these two ideas will make them smarter consumers and savers.

Have fun

While it’s important to be financially responsible on vacation, it’s also important not to let financial prudence (or frugality) interfere with the purpose of the trip: having a good time. If that extra glass of wine at dinner costs a little more than you expected, it’s probably OK to have it anyway; you can always reduce spending elsewhere if necessary.

By approaching your vacation planning the way you approach your household spending plan, your trip can be focused on recreation and recharging rather than constantly stressing over what impact it will have on your finances.

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