Financial planning should be a big part of your preparations when you want to enjoy a great vacation this summer season. Although a lot of people travel during the holidays, the bulk actually happens during the hot season. This is probably caused by the availability of the students in the family. After all, it coincides with their vacation from school. In fact, some people go on a vacation after a student in the family finishes a milestone in their education (e.g. graduating with honors, etc).
Apart from that, we all know that vacations are also very important for workers. According to an article published on LATimes.com, an employee working full time spends 42 ½ hours each week in labour. That is more than 2,200 hours of work each year. Based on the data provided by the Bureau of Labor Statistics, 7% of employed individuals work more than 60 hours each week in 2014 – which is more than 3,100 hours of labor every year. If you are working that much, then taking a week off to go out and relax is a must.
Now the thing about going on a vacation is that it costs money. Some people would choose to skip the vacation because they would rather earn money instead of spending it. However, you need to understand the benefits of going on a vacation. It is believed that people become more productive if they take some time off to recharge. Not only will you be resting your body, you need to relax your emotions and calm your mentality. All of these can be achieved if you only take a vacation from your usual tasks.
Your concerns about the money you will spend during your vacation can be solved if you dwell on some serious financial planning first. Do not just plunge head on just because you feel you deserve it. Although it may be true that you deserve the break, you need to make sure that it will not ruin your finances in the process.
How to prepare financially for a debt-free vacation
The big question is, how can you financially prepare yourself so you can go on a debt-free vacation? The key is to plan ahead.
A spur of the moment vacation may be exciting but if you will charge it to your credit card, then you will lose the excitement once it is over. In fact, that debt that you will incur may even put a damper on your travel adventures. Why not aim to go on a vacation that you will enjoy without incurring any debt? That is possible – as long as you prepare for it months before the actual travel date.
Here are some tips that will guarantee that you will have a debt-free vacation ahead of you.
Set a budget.
First of all, you need to set a budget for your vacation. Give yourself some room to prepare. A few months of financial planning before the actual travel can really save you a lot of money. It will also give you time to consider the different options that you have when it comes to your destination and the activities that you will pursue.
If you start preparing in January every year, that will give you 6 months worth of preparation for your summer vacation. If you can put aside $500 a month, you will have $3,000 to spend on your vacation. Set that as your target. Work around this amount when you plan your vacation.
Save up for your expenses.
Now that you have set the budget, you need to come up with strategies to save money. Decide if you will cut back on your usual expenses or you will earn more. If you can do a bit of freelancing during your free time, you can add your earnings to your savings. If you know how to bake cookies, you can sell some to your colleagues and ask them to support your vacation fund. It should be a fun way to save up for your summer travels.
If you can save up a higher amount than the budget that you have set, that would be even better. At least, you have extra money to spend on your vacation.
Scout for discounts.
When planning your vacation, you need to get as much discount as you can. According to TravelPulse.com, almost 60% of those traveling usually exceed their summer budget every year. Try not to commit the same mistake. If you have $3,000 as your target amount, work around a budget of $2,500. That means your food costs, board and lodging expenses, travel costs and activity fees should be within this amount. The extra $500 should be allotted for unforeseen expenses. There will always be miscellaneous costs that you need to prepare for. If your budget seems too small, you simply have to look for discounts that will allow you to enjoy your vacation despite limited funds.
Financial planning early on will benefit you because you can see a lot of discounts when it comes to hotel bookings, airfares, etc. If you book months ahead, you can get huge slashes on the regular price.
Tips to enjoy traveling on a low budget
In case you do not have enough time to save up for your vacation expenses, financial planning can still help you a lot. There are a lot of frugal fun activities that you can enjoy this summer if you know how to look for them.
Here are some tips that you can use to help you plan your vacation.
- Concentrate on what will make you happy. Start by identifying what will really make you happy. For instance, if you are dreaming about vacationing in the Caribbean, think about the factors that make that particular place appealing to you. Is it the beach? Is it the warm weather? Is it the beautiful scenery? Believe it or not, there are places in the country that will give you the same views and climate without it costing a lot.
- Opt for staycation. This simply means enjoying what you have at home. If you follow the first tip, you should be able to find a great vacation spot without traveling a long way. Based on an article published on NYTimes.com, domestic vacations are on the rise this year. Analysts believe that Americans will choose to spend their vacation money exploring their own country. If you choose the right spot, you could end up having a low budget vacation without sacrificing the rest and relaxation that you are aiming for.
- Book your tickets ahead of time. As mentioned, an early booking will give you more chances of getting a discount. Most airlines and even hotels give out discounts for those who will book with them ahead of time. This is one of the reasons why you need to start your vacation’s financial planning months before you want to take a leave.
- Lower your expectations. We all want to stay in a 5-star hotel but we have to realistic. If you will only stay there to sleep because you plan on roaming around the whole day, then why spend so much on a hotel? Opt for the cheaper lodging options that are decent but not as extravagant. The same is true for your other expenses. Like if you need to rent a car, be reasonable with what type of vehicle you will lease.
- Be smart about your food expenses. Part of the joys of traveling is tasting cuisine that you rarely get to enjoy. However, that does not mean you need to eat out all the time. If you can book accommodations that will allow you to cook, then that will save you a lot of money. You can cook your own meals – at least breakfast and dinner, and then have your lunch in one of the restaurants in the local neighborhood.
- Set aside your budget for major expenses. If you plan to visit local attractions that have entrance fees, you may want to set aside the money for these expenses. Place them in separate envelopes and label them accordingly. This will not only keep you from spending them on other things, it will also help keep your finances organized.
These financial planning tips will really help you cut back on your summer budget so you can have a debt-free vacation.
