How To Budget for a Stress-free Family Holiday
Financial coach Jex offers sound advice and top tips on how to make your holiday budget work without breaking the bank.
By Jex Leigh Roach
Have you ever taken an amazing family trip, only to return home and feel stressed about how much it cost?
Many people are familiar with the idea of creating a monthly budget for household spending, but few people have ever made a travel budget. Just as it’s important to have a plan for your money throughout the month, it’s equally as important to have a spending plan while you’re traveling. This can be done in one of two ways: figure out how much it would cost for the vacation you have in mind, then save that amount over time; or look at what you have saved in your travel category and create a trip that fits within the amount you have.
The travel category is a perfect example of a sinking fund. That’s when you set aside a bit of money each month to use in a lump sum later. Most people don’t have enough money left over at the end of a month to fund an entire trip, so it’s important to set an amount aside each month. Take a trip once you have saved up enough for the trip.
When you’re traveling, the biggest costs are usually lodging, transportation, food and beverages, and entertainment.
For lodging, consider the cost of a hotel, vacation rental, campsite, or any other kind of sleeping arrangement. Include the cost of a baby cot or an extra bed, if necessary. Remember to also add the amount of taxes based on your destination—on a long trip, this can be significant!
Transportation could include airfare, taxis, a rental car and fuel, ferries, or train tickets. Some smaller transportation expenses are parking, tolls, checked luggage, and baggage handling fees or tips.
Food and entertainment costs will vary widely from family to family and even trip to trip. On one trip, you might stay in a vacation rental, cook most meals yourself, and spend most days on the beach or at a national park. On another vacation, you might eat all your meals at the hotel restaurant and visit a lot of tourist attractions. When trying to figure out your food budget, remember that restaurants in Thailand charge 7% VAT and a 10% service charge, usually on top of the listed prices. Many other countries charge taxes and/or fees as well.
While those are usually the four largest expenses, there are many potential smaller things that are easily forgotten. If you plan to buy gifts or souvenirs, include those in your travel budget. Consider if you’ll need to buy any weather appropriate clothing, such as warm clothes for a winter location, or activity-specific gear, such as skis or snorkels. Remember to account for any insurance you may need: trip, medical, rental car, and so on. If it’s a long trip, you might include laundry expenses. If you’re traveling internationally, include costs for visas, passports, and any currency exchange fees. Lastly, estimate any tips you might give, if applicable to the location you’re traveling to.
Now that you’ve imagined your trip from beginning to end and thought about all your expenses while you’ll be away, it’s time to think about things back home. What extra household expenses will you incur while you’re gone? Do you have pets who need a sitter or walker? Will you have someone to house-sit or clean?
Once you have an estimate of how much the trip will cost, add another 10–20%. This gives you some wiggle room for unexpected expenses, additional treats, or things costing more than you expected.
And as with any spending plan, it’s important to keep track of your expenses so you know whether or not you stayed within budget. If you pay for expenses online beforehand, write down those expenses as you make the purchases. For everything else, the easiest way to stay within budget is to use a cash envelope system. Put your budgeted amounts in envelopes—you could have just one envelope for all travel expenses, or make one for food and beverage, one for entertainment, one for shopping, and so on. If there’s money in the envelope, you’re within budget, but if the money runs out, you’re done spending in that category. And when you return home after your trip, you’ll feel more relaxed knowing you had a plan and you stuck to it!
Photo from Canva.
About the Author
Jex lives in Bangkok with her husband and two daughters, who are five and three years old. She has a Masters in Business Administration and has studied personal finance since 2011. As the owner of Jex Leigh Financial Coaching, she helps individuals and families create better financial habits so they can achieve their dreams. To download a free editable travel budget or find out more about Jex’s services, visit her Facebook page at: facebook.com/jexleighfc.
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