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How To Budget for a Vacation

Planning and saving for a vacation can save money and keep your financial plans on track. Get tips for building vacation plans into your budget.

Stacey Black (She/Her/Hers)
BECU Lead Financial Educator
Published Jun 26, 2023 in: Budgeting

Read time: 3 minutes

It might be tempting to just book a vacation and worry about paying for it later but overspending on a big trip can set you back financially — and make it harder to pay for a future vacation.

If you plan and save for it, it might even make your vacation more relaxing because you won't have to think about paying it off.

Here are some tips for creating a vacation budget you can stick to:

1. Be Realistic

Think about your vacation in the context of your overall budget. Try to be really clear about what you can realistically afford — and make sure you have enough money to cover your essentials first.

2. Do Your Research

Think of your vacation as a budget within a budget and be as specific as possible. Look at everything you'll need to pay for and group your expenses in categories. The main vacation budget categories are entertainment and activities, food, lodging and transportation.

Your research will help you determine whether you can afford a big, international vacation, or if staying closer to home is more in line with your budget.

3. Set a Savings Goal

Once you know how much your vacation will cost, you can start saving for it as part of your monthly budget. If you're planning to go in a year, divide the total vacation cost by 12 to figure out how much you'll need to save each month.

I'll even put my vacation money in a CD to lock it away, so I'm not tempted to spend it.

Whether it's a CD or a savings account, choose what works best for you. You can even open a separate savings account and name it "vacation," or divide up your funds within an account using a tool like BECU Envelopes.

4. Track Your Vacation Spending

Set daily spending goals and track your expenses during your vacation. Save what's left each day to take home with you. You'll have a head start on saving for your next vacation.

5. Look for Member Deals and Use Credit Card Points

Many credit cards offer air miles and travel benefits that can save you a lot of money, but use caution: The amount you end up paying in interest will likely cost you more than the benefits are worth. It's best to pay the credit card in full each month to save on interest.

Check for deals with organizations where you have memberships, too. Many credit unions like BECU, for example, offer discounts for fun local activities.