After the stress and uncertainties of the past two years, there is nothing better than planning the trip of a lifetime to relax. Time to unplug from a dull routine, and feel alive! Here's how to save and budget for your trip of a lifetime!
But what if you don’t quite have the funds you need? What if you can't enjoy the places and experiences you have been dreaming about?
Are you are planning to immerse yourself in a luxury hotel in the Maldives? What about getting out of your comfort zone with a backpacking trip? Your vacation should not become a financial burden.
Here’s how to afford your dream vacation!
Get an Up-to-Date and Big Picture Overview of Your Finances
The first step to efficiently saving up for the trip of a lifetime is to know where you stand before planning your vacation. Taking a hard look at your finances is a great way to know how much you can comfortably spend on your vacation without running into overwhelming debts or compromising your financial stability.
There are many ways to get the big picture of your finances. Firstly, look at your savings and emergency funds, and make sure that you have at least six months’ worth of expenses already saved up. Additionally, credit score monitoring and calculating your debt-to-income ratio can help you get a snapshot of your finances’ health.
Once you have a clear picture of your starting point, you can focus on bulking up your savings, reducing credit card debt, or healing stains on your credit history that are preventing you from accessing better financial products.
Pro tip – some credit cards are better than others when traveling, and having a high credit score might be the only way to secure the best card for your goals. If you aren’t satisfied with your FICO score, start building it up today!
Choose When and Where To Go On Vacation Wisely!
If you have caught the travel bug, the chances are that there are more than a few destinations on your bucket list. And, while this might be a trip you have been dreaming about for years, you should pick a destination that fits your current financial situation and goals.
For example, you could opt to tick off one of the high-end destinations on your list by traveling there off-season. Or, you could choose the budget version of a certain experience.
For example, a beachfront bungalow in the Philippines can offer the same experience as a luxury villa in Bora Bora for a fraction of the cost!
Craft a Clear and Accurate Vacation Budget
On average, a 13-night trip abroad for American travelers costs $3,250 – a price that will inflate quickly when accounting for a couple, a family, or a group of friends traveling together!
However, not all destinations will have the same price tag. So, before setting your budget and savings goal, make sure to understand what are the real costs involved with your dream trip.
Some tips to reduce the cost of your vacation? Keep these in mind:
- Plan ahead
- Compare the cost of living of different destinations
- Shop around for the best hotel, accommodation, and transport deals
- Travel light to avoid extra charges and airline costs
- Reduce variable expenses by planning your days, excursions, and experiences
- Compromise on small luxuries and comforts and splurge on once-in-a-lifetime experiences
Have a Budgeting Strategy in Place – and Get Your Family Involved
According to estimates, nearly 75% of Americans planning a vacation have gone into debt to afford their family trip, with loans worth an average of $1,000. But getting into debt for a vacation won’t just affect your overall finances – it can also eat into the enjoyment of your trip!
Luckily, you can avoid financial troubles by designing a budgeting strategy early on, keeping motivated throughout, and getting your family involved with the mission of saving up for a dream holiday!
Have a Stress-Free Vacation That You Won’t Regret
When planning a stress-free vacation with your friends, significant other, or the whole family, there are some expenses you truly should not skimp on. The most important purchase you could make at this stage is an efficient and comprehensive travel insurance policy.
This might seem like an unnecessary expense at first, but it can cover your losses in case of theft, damage to items, and illnesses. After all, settling for a slightly higher premium is still a small price to pay to have peace of mind on your trip!