It’s almost summer and for people of all ages that usually means vacation and an opportunity to create a financial problem. Overspending on vacation is often one of the top five money blunders people of all ages can make.
Where do most people end up overspending on vacation?
Interestingly it is usually not on the lodging or even the travel expenses. Most people research and find good deals. The financial miscues often come once they have arrived at their destination. Or if they stay at home, their choices during the week of staycationing that seem completely justified.
What are suggestions for avoiding vacation overspending?
Develop a spending plan for the entire vacation, not just the transportation and lodging. Set a budget for daily food expenses, activities and souvenir expenses. Once you have a budget, then plan your meals and activities accordingly. Doing this in advance will help you better understand how much you can spend each day on food and activities.
How much do you suggest people spend on summer vacation?
A great rule of thumb is don’t spend more than twice the amount you have saved and preferably only spend about 25% more than you have saved. This general rule of thumb makes sure that summer vacation doesn’t become a major impact on your financial situation it also helps narrow possible destination choices.
How can someone save on summer vacation costs?
Vacationing early in the summer is one great way to reduce your costs. If you don’t have a specific destination, another way to save is to book the vacation at the last minute. Look for deals and locations that are not filling up. They are very likely willing to offer deep discounts for last minute reservations. Both of these options can provide significant savings on lodging and perhaps even score free or discounted activities.
Are there other ways to save on summer vacation?
Consider going to destinations that are offseason as one option. You might have limited activities available but the savings might be significant. The other possible way to save is doing two mini vacations as long as you watch the travel expenses. Shorter vacations often help with food and other activity costs.
Is there any other advice for keeping vacation expenses from getting out of control?
The most important advice is while on vacation - don’t stop all of the smart money habits that you normally use. This includes: avoid impulse purchases; comparison shop on any spending; and, keep track of how much you are spending each day. Following good money habits all of the time really keeps us all out of financial distress.