I have to plug the importance of proper financial management and having a good budget for travel, since I am also a financial counselor!
A worry-free financial future is more important than a vacation, so please do not go into debt to travel! It is important that you have a budget, save appropriately, and travel within your means. Fully fund a Roth IRA and any portion of a matching employer’s retirement account before you fund a travel account! The time value of money is crucial for you to have enough money to retire. The younger you start saving for retirement, the less you have to save of your own money, and the more you can travel! I could go on and on about finances, but that’s not what this blog is about. I’ll share the prices I paid for hotels, airfare, etc. so that you can get an idea of how much each trip costs. I think it’s important to see what others spend since prices fluctuate so much for traveling. It’s hard to know what the “normal” rate really is for airfare and hotels.
Here’s how I budget for vacations:
1) I use an MS Excel spreadsheet for a family budget (you can download the template for free from MS Excel). One of the categories is vacations. I update our budget every time our income/expenses change. Depending on the monthly travel budget, I determine how much money we can spend on our next vacation. (For example: If you budget $200/month for vacations, but you want to go on a $1,000 trip, you need to wait for 5 months and save that $200/month before you travel. Do not travel before all of the money has been earned and set aside. It is a waste of money to pay interest rates in order to borrow money before you’ve actually earned it. That’s the same as giving away free money!)
2) I use another MS Excel spreadsheet to create estimated budgets for places we’d like to travel. I start comparing airfares and hotel prices so I have an idea as to how much each trip will cost. This also makes it easier when we’re ready to book a vacation because I know what the average price should be and how much we can expect to spend.
Example: Taipei, Taiwan
Airfare – (Peach Air often has airfare as low as $120.) TransAsia: $300/person = $600
Hotel – Beauty Hotels Taipei Hsuanmei: $79/night = $238
Activities: $0 (I had budgeted $100, but we didn’t end up going to any sites that cost money.)
Purchases: $6 (I had budgeted $100, but we only found 1 thing we wanted to buy.)
Airport Parking – Honest Parking Services: $7.50/day = $30
Kennel – Ashley the dog sitter: $12/night = $36
Actual Total Cost: $1,072
Use these categories for each city, and add any other categories that may pertain to you! Ex: Day care, excursions, or cruise.
If you have questions about finances, the military offers free financial counseling through MCCS. Navy-Marine Corps Relief Society also offers free financial classes and one-on-one sessions for military members.
Vacations don’t have to be expensive to be fun! Do what works for you and your budget!