Because family vacations aren’t always included in the monthly family budget, you’ll need to do a separate budget for your trip. Step one of saving for anything, big or small, is knowing the true costs of what you are planning for, so you’ll need to figure out where you want to go and when you’ll want to go. Once you know the approximate amount of money you need, you can start saving money for vacation.
To figure out how much your vacation should cost, start by decided where you want to go. This may be an iterative process – once you find out how much your dream vacation is going to cost, you may decided to try for a different place, or a different time. Think about how much time you can realistically get away from work, and your kids can miss school (if going during the school year). Using the internet or a travel agent, research what your flights and lodging will cost, making sure that you gather prices from the correct season. For example, school vacation week can be a much more expensive time to travel – prices are often more than double. If you have your heart set on a place that is expensive in-season, consider traveling slightly off season.
Next, think about your food budget, keeping in mind the type of meals you are likely to eat. You can do this at a pretty high level – you don’t need to price out each individual meal. Once you know what you will spend during your vacation, you can actually subtract out your typical grocery and dining out expenses for the week, since you won’t be home.
Don’t forget about the “hidden costs” of vacation. These include kennels, or pet sitters, rental car fees, airport parking fees, and souvenirs. Forgetting to budget for these particular items can make you burn through your vacation budget quicker than expected.
Now that you have your budget, you should develop a plan for saving money for vacation. Think about whether you’ll want to save monthly, or if you’ll have an expected windfall like a bonus or a tax return to use. If you are saving monthly, divide the total cost of your trip by the number of months left, and start saving. Do keep in mind that you will need some of the money earlier however, especially if you are flying somewhere and need to purchase airfare.
Put your savings in a safe place, like a bank or money market account, and start planning your vacation!