How to Budget for Holiday Travel

Budgeting makes travel better. It gives you a structure to save for your vacation and to plan out all the details you want to incorporate into your travel. With discipline and research, you might be able to expand your travel activities to include extras that otherwise would be out of reach. Not having the funds to book a five-star, all-inclusive vacation does not mean you have to don a backpack and hitchhike your way to the nearest hostel. Budgeting can help folks with even modest incomes to enjoy comfortable, well-planned excursions.

Establish a Holiday Fund

 

Be it a shoebox in the back of the closet or a separate savings account, it's important to create a holiday travel fund. Having a dedicated envelope, physically or virtually, will encourage you to save toward your end goal. Relying on credit cards or other debt to fund your travel could be an invitation to overspend. This would not only add to your overall cost through interest payments, but also reduce the amount of credit available to you should emergencies arise during the trip.

Create an All-Inclusive Budget

 

Holiday travel involves three main expense categories: transportation, accommodations and entertainment, including meals, drinks, gifts, tours and souvenirs. Quicken allows you to set up special-purpose budgets -- you can establish one using these three categories and any other ones that seem appropriate. Planning ahead will give you the time to think of all the expenses that could arise before embarking on your trip. The more details you can anticipate, the more realistic your budget will be. CPA and avid traveler Colin Corcoran advises: "Avoid nebulous budget categories such as “spending money” that will encourage you to spend frivolously when drawing down from a large pot of funds."

Plan Your Events

To the extent possible, identify "must do" activities, research their costs and include them in your budget. Planning and costing each day’s activities in advance will not only help you control your spending, but also can eliminate time spent needlessly combing the brochure rack at your accommodations or staring at a map hoping for something interesting to present itself. Corcoran says, "When you arrived at your destination, your first question should not be 'Where to first?'"

Stretch Your Budget

 

Incorporate into your budget the savings you can capture through special promotions. This is a good way to increase your buying power without busting the budget. You can save money by using Internet travel sites. Keep an eye out for special promotions offered by one site but not another. To supplement your savings, check websites such as Groupon and CityPASS for discount coupons and deals. The competition among travel-related service providers constantly creates new opportunities for you to stretch your budget.

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