How To Create a Travel Budget – Your Fail Proof Method

Figuring out how to create a travel budget is perhaps one of the more challenging aspects a family faces when deciding to travel. In fact, even writing this article was a bit challenging because everyone approaches it differently.

Factors such as time of year, the length of trip, desired destination, dining, activities, and accommodations all play a role in determining how much you’ll spend on this year’s vacation.

However, I knew that creating a travel budget was important if we wanted to travel more with our kids before they moved out.

I’m approaching creating your travel budget from two different angles, how much you want to spend, and where you desire to travel.

I’ve used both these methods for different types of trips.

Creating a Travel Budget Based on Dollar Amount

If you’re locked into a set dollar amount for your vacation, follow these steps. To begin with, I’m a huge fan of spreadsheets and track our expenses there. I guess you could call that the pre-step. However, pen and paper work just as well.

Step 1

Determine your categories of expenses. I suggest at least the following:

• Flight or Gas to Drive
• Rental Car (if flying)
• Transportation Costs (subway, tolls, trains, etc.)
• Accommodations
• Food/Dining
• Attractions
• Travel Insurance
• Souvenirs
• Unexpected Costs

Give yourself a buffer zone with the unexpected costs. We all know something comes up when we’re out and about that we don’t expect. If you want to keep to a strict dollar amount, this is key. Bonus, if you don’t use it, you come home with a little extra that you can put to your next trip.

Related: How to Save Money on Attractions

Related: Do I Need Travel Insurance on a Road Trip

Step 2

Decide if you’re going to fly or drive. You may need to know some flight prices at this point. You can approach this in one of two ways. Visit a site such as Kayak Explore, to see how far you can go based on your starting point. Or, decide which is cheaper, to fly or drive to this destination. I wrote a detailed article here on how to decide which is best, and most cost-effective.

Step 3

Research. Research. And more research. If you’re locked into a set budget, you will have to spend time finding the best prices, especially on accommodations. Here’s a list of a few sites I use to find the best prices on accommodations.

• Expedia – The most popular site among my readers, Expedia offers a price match guarantee, and you can get deep discounts at hotels.
• VRBO – Seeking a home away from home? Earn rewards with VRBO through their One Key program that you can use on future stays.

Step 4

Keep researching. Pinterest is a wealth of information on how to keep costs down, but more, how much it may cost to eat in a destination, and find the best travel deals on accommodations. Read more on how to use Pinterest for more than just travel wanderlusting.

Step 5

Keep your findings and bookings on track with Trail Wallet. This is one of my favorite apps to not only plan out what my day to day budget, as well as the overall budget will look like, but also to keep me on point during the trip.

Related: Apps to Make Travel Planning Easier

Creating a Travel Budget Based on Destination

If you have a destination in mind, you can create a travel budget and create a saving plan for the trip. Ultimately, many of the steps are the same with a few modifications.

Step 1

Just like above, you’ll create your categories of expenses. You’ll fill in the amounts as you come across the expenses.

Step 2

If you are flying, and know your destination, you’ll want to sign up for Skyscanner or Airfare Watchdog. This site tracks your home-to-destination flights and alerts you with the best prices as they come through. You can set up as many alerts as you wish, but be prepared, you may receive daily emails. When you lock in a flight, you can place this as part of your budget.

Also consider flying with just a personal item and basic economy fares to save money. You can find some great bags that fit under your seat here.

Step 3

Research again. You’ll still want to find the best prices, of course. I’d still use the Priceline or Airbnb links for accommodations, just now you can narrow the search to your destination.

Step 4

Depending on where you’re going, you’ll still need to know the cost of attractions and other expenditures you’ll have your trip, including dining. Add these to your spreadsheet or to Trail Wallet.

Step 5

Save for your trip. Now that you know what it will cost, it’s time to save for it.

I use a budgeting app called YNAB -You Need a Budget. You can grab a free 38 day trial here. 38 days because they know it takes longer than a month to get a true grasp on your budget.

I use it to plan for vacations, but also all my budgeting categories. It changes the way you think about budgeting, and planning with the money you have, not the money you think you’re going to have. It has a slight learning curve, to change your overall budget thinking. All in all, however, it’s been a game-changer in how I save for vacations, as well as daily expenses.

It may take a few passes through your steps to ensure it encompasses everything you need. But both approaches to figuring out your travel budget should give you an idea of where you can go, or what you’ll spend on your vacation. If you want to ensure you stay within a budget, one of these methods, along with the tools mentioned should serve you well.

Additional Ways to Boost Your Travel Budget

Credit Card Bonuses

We boost our budget with rewards credit cards that help us earn free travel on things such as hotel rooms and flights.

When you’re digging into you credit cards, look for additional ways to save.

Some examples are:

• Stay credits. Earn money back or money off your stay when you use the credit card’s travel portal
• Bonus points. Some cards earn you more points when you purchase certain items.

Additionally, consider specific travel cards such as Chase Sapphire and Capital One Venture Rewards. (I have both) When you click on either of those links and sign up, you earn bonus miles.

Hotel and airline-branded cards will also give you additional points if you book or fly with that partner.

Keep in mind that some of these credit cards have annual fees. Depending on how often you travel, you can justify these fees if you’re saving and earning enough points.

Loyalty Programs

We sign up for every loyalty program to further earn points on stays.

Even if we’re not using that brand’s credit card, it doesn’t mean we don’t earn points on every stay or flight. You never know when those loyalty points will come in handy.

I recommend keeping a list of your loyalty points in a Google Spreadsheet or Airtable so that you know when you’re getting close to redemption levels.

Warehouse or Club Memberships

Finally, memberships at places like Sam’s, BJ’s, or Costco has travel savings that you can take advantage of. If you’re already using that for your grocery hauls, stop by the customer service desk and look more into the travel savings offers.

Memberships to your credit union or certain banks also offer discounts that you can use when creating your travel budget.

And if you’re a member of AAA or AARP, they are known for offering discounts on hotel reservations among other savings.

Crunching the numbers

Sticking to your travel budget starts well before you hit the road—use this pre-travel checklist for families to avoid last-minute expenses and keep your plans on track.

What are your thoughts? Do you have any additional methods to make your budget fail-proof?