4 Tips On How To Budget Your Next Vacation

By Daniel Goodwin

A client retired a few years ago and is in the midst of publishing his own travel book; an individual with a true knack of knowing how to budget out a vacation. One of the principles he’s stuck to over a lifetime while becoming wealthy is no not take a vacation that he did not already pay in advance of the trip (including spending money). He may book a vacation to go to Italy one year from now, and if the trip will cost $4,000 he will actually make payments of $333 a month over the next 12 months. By the time the vacation is upon him, he can really enjoy the excursion to a far away destination because he won’t have the debt lingering over his head when he comes back to the United States. While we all may not be able to take this exact methodology, discussing some of the key points on how to budget your vacations into your overall household income might get us a few steps closer.

1. Vacations should be a 2% to 3% line item within a normal household budget.

One of the very challenging issues to tackle as the CEO of your family finances is how much of a percentage should vacation and travel constitute of your overall expense load as a family. If you make $200,000 per calendar year, your overall yearly vacation spend shouldn't be more than $4,000 to $6,000 overall. Part of the issue why many households fall behind each year is due to the overspending on categories like meals/entertainment and travel/vacations. The first key is to set the actual budget within this expense category, which allows you to work backwards on how many trips you can afford and where you will take them. Anything above a 5% spend in this one category is extremely dangerous.

2. Decide what you want to get out of the vacation

This statement is all about setting expectations. We get to see the lifestyles of the rich and famous on regular and reality TV shows alike today all the time. Start considering the following: what is the purpose of my vacation? Am I making memories for me as a parent as I spend time with my kids? What kinds of activities am I interested in doing on the vacation? Is there a part of the United States or the rest

of the world that I always wanted to see? Is this about getting family together overall? What exactly is your raison d'etre for making this spend? Otherwise, if you are a people pleaser you might pick the fanciest hotel in the nicest of destinations only to see you and your kids having the most miserable time. I want to underscore that if you are taking little kids away, they aren't likely to remember many of your trips years down the road, so don't fall for the trap that a Magic Kingdom memory is going to be something your kids cherish for the rest of their lives. The part they remember the most is the pool at the hotel and the grilled cheese at the local restaurant.

3. What kind of points do you have available?

Destination getaways are well aware of the prime seasons to hike prices such as summer, Christmas, spring break, etc. Check into the blackout periods for your airline and hotel point programs to make sure you can actually use them for your trip. In addition, at certain junctures in the calendar year you can stretch out your points or get a round trip ticket for a lower number of points. It's important to maximize these point programs because it may leave you with only paying some basic taxes or ticketing fees.

4. Plan your spending money

It's vacation, so as you begin to unwind and relax so will your wallet. What the heck honey, we’re on vacation!!! The moral of the story is to not let the plastic run the financial limits it can carry. Plan in advance how much spending cash you will bring for extracurricular activities, tourist attractions, meals, and souvenirs. Otherwise, what do you think you'll be inclined to do once you get there to get the kids to stop screaming for just five minutes? You will end up opening up your wallet and turning yourself upside down.

Having planned out thousands of family finances over the past two decades, vacation spending is a constant black hole you will have to deal with every year.

Since it is early spring of 2016, take a step back now to plan Spring Break, the summer, and holiday season to determine just what spending limit to set for family vacations. Otherwise, what you will end up with a handful of photos, a few vacation trinkets, and a nasty credit card hangover.

This material is for general information and education purposes only.  Information is based on data gathered from what we believe are reliable sources.  It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions.  It should also not be construed as advice meeting the particular investment needs of nay investor.

Links to third-party web sites are provided as a convenience.  Provident Wealth Advisors, LLC does not endorse nor support the content of third-party sites. By clicking on a third-party link, you will leave this website where privacy and security policies my differ from those practiced by Provident Wealth Advisors, LLC.


Provident Wealth Advisors

25511 Budde Road

Suite 1002  The Caroline Building

The Woodlands, TX 77380



  • Facebook Social Icon
  • LinkedIn Social Icon
  • YouTube Social  Icon

Copyright 2018 Provident Wealth Advisors, LLC

All written content on this site is for information purposes only. Opinions expressed herein are solely those of Provident Wealth Advisors, and our editorial staff. Material presented is believed to be from reliable sources, however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual adviser prior to implementation.

Fee based financial planning and investment advisory services are offered by Provident Wealth Advisors, a Registered Investment Advisor in the State of Texas. Insurance products and services are offered through Goodwin Financial Group . Provident Wealth Advisors, and Goodwin Financial Group are affiliated companies.

The presence of this web site shall in no way be construed or interpreted as a solicitation to sell or offer to sell investment advisory services to any residents of any State other than the State of Texas or where otherwise legally permitted. This site is published for residents of the United Sates only.  Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered.  Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined.  Not all services referenced on this site are available in every state and through every advisor listed.  For additional information, please contact us at 281.466.4843.

Provident Wealth Advisors, LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.

ADV - 2A                                                Provident1031.com is a Division of Provident Wealth Advisors, LLC.                                               Privacy Policy