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Setting A Travel Budget

Your travel budget is more than just about money, it’s also about time.  Time and money is the first thing you need to consider when planning your trip.  

Let’s start with time.  
The first thing you should think about is what type of vacation are you about to set out on?  Is it a “relaxing” type of vacation where all you want to do is relax and stay in one place?  If so, maybe that’s a weeks worth of vacation at best.  After all, two weeks in one place doing nothing but relaxing, can be a bit tedious for most people.  If you’re planning on going to a far flung destination or going to multiple places for vacation, you should make sure you allow enough time.  Just getting to destinations like Asia, Africa or the Middle East can chew up two days on the outbound portion of your trip and one day on the return.  If you’re only going for a week, that leaves you at most, 2-4 days at your final destination.

What is the right amount of time?
If we go on a “relaxing” vacation, we usually plan on 7-8 days.  We know that at least 1-3 days are going to be for travel, so that leaves about the perfect amount of time to truly relax. Of course, if you can stay longer, all the better.  In some cases, we may even do 3 days at one location and 3 at another, if they’re close by.  When we went to Malaysia a couple of years ago, we spent a day in Singapore, follwed by 5 days in Malaysia.  4 days by the beach and 1 day in Kuala Lampur.  While we did do a bit of sight seeing, it was mainly laying by the pool or beach most of the time.

Occasionally, we do go “crazy” and do shorter term long weekend vacations, even to far flung destinations.  A few years back, we went to Dubai for the 4th of July.  We left on a Wednesday and came back on a Sunday.  Was it worth it?  Sure.  We stayed in Dubai at the Burj al Arab and ventured out a couple of times for some half day activities.  Plus, we accumulated a good chunk of miles towards our airline status.  The great thing about going east from the US, is you can usually spend your time flying during the night, so you’re at your destination early the next morning.

For multiple destination or long distance vacations, you definitely want to give yourself more time.  If you’re traveling a long distance, you definitely want to add a day to “decompress”.  Always being on the run, makes you tired, cranky and much more susceptible to getting sick, which is the last thing you want on vacation.  With a multiple destination vacation, make sure you give yourself enough time at each stop.  It’s awfully hard to go to the Louvre in Paris for just an hour.  Sure, you could see a couple of major things, but you miss a lot, too. Make sure you leave enough time to reasonably see and appreciate the things that you want.  You may also want to hire a local guide at your destination.  They can often get you where you want to go much more quickly (as they’re familiar with your destination), plus take you to places you ordinarily might not go or know about.  We do this often and have never regretted it.  We’ve been able to see a lot more of destination in a much shorter amount of time, without missing out on anything.

Next, let’s talk money.
Money still doesn’t grow on trees.  There’s nothing worse than coming home to credit card “hangover”.  Even with a budget, that’s still a risk.  It shouldn’t be as bad if you put a few minutes of thought into what you’re going to spend.  Plus, budget may affect where you’ll go.  We always start budgeting for certain destination trips a year in advance.  That way we know we’ll be able to have the funds we need to go the places we want.  Plus it gives us enough time to make any “corrections” along the way.

Most people budget for the major things.  Airfare, hotel, food, etc.  But what about the other things you may want to do when you get there?  Make sure to include in your budget transportation.  Not just rental cars, but taxis, busses, subway fare, transfers, etc.  These can add up to be significant, based upon where you’re headed.  Also, what about activities?  The last thing you want to do is go half way around the world, find out you could take this awesome afternoon excursion, and then find out you don’t have the money to do it.  If you research before you go, you should be able to easily estimate what you’ll need for your trip.  Two major budget items for a trip after hotel and airfare, are food and drink.  Remember, you can save a ton of money on food by eating local.  Go out on a limb and avoid the chain restaurants or the tourist traps.  Food carts, local eateries can be much lower cost and most of the time, much better food.  Drinks at hotel or resort bars add up fast.  Pace yourself.  Have a glass of water or soda in between each drink.

Last but not least are taxes.  Taxes can easily chew up a budget quickly, especially depending upon the duration of your stay.  For example, you may book 5 nights worth of lodging at a resort in Mexico.  you think the rate of $200 a night isn’t bad.  But, add Mexico’s 22% tax on top of five nights at $200, you just spent another $220 on the room.  Plus, add that 22% to every drink and meal that you have as well.  It doesn’t take long on a week vacation to add a significant amount to your tab.  It’s always a good idea to check out a destinations tax rate before you go.

[box type=”note” ]One good way to budget for a trip, is to start a vacation fund. Open up a separate account and contribute some money each month. That way, you’ll have a nice little nest egg put away and hopefully avoid a lot of credit card hangover.[/box]

Last modified: January 5, 2014