The summer vacation is a time-honored tradition for many families. The summer Vacation Budget is a tougher subject. We all look forward to a break and want to get the most out of our trip without breaking the bank. Here are 6 tips to help you before, during, and after your vacation.
1. Pay up front. A study in the Journal of Consumer Research (April 2011 – Elizabeth Dunn, Daniel Gilbert & Timothy Wilson) shows that we are happier with purchases that we make up front, and then experience later. If you can, pay for your hotel and other arrangements in advance (from your savings, not on credit!) and then go happily on your trip. You’ll certainly have expenses while there, but having paid for the trip in advance keeps your account balances from taking a big hit all at once.
2. Decide what’s important and spend your money on that. Our vacation budgets aren’t unlimited, so how can we make the most of our money? Spend on what is most important to you. If you’re a foodie, spend on dinners out and save on your hotel. If walking around and taking pictures is important, spend on a hotel in a great neighborhood (and a great camera too), and save on meals out by going to the grocery story and making sandwiches in your room or otherwise eating cheaply.
While on your trip:
3. Don’t skip the extras. It’s easy to think of what you’ve spent on the entire trip and stop yourself from spending another $10 or $20 on an experience. You’ll get more bang for your happiness buck if you make those small extra purchases. Plan and save for them in advance, but don’t skip those extras. Our Emotional Experiential Memory remembers these vacation expenses, often more fondly than everyday expenses.
4. Track what you’re spending. Every penny. This isn’t to beat yourself up about your spending after the fact. Rather, it serves as a really effective trip journal (what was the name of that great restaurant?) and an important planning tool for your next trip. By getting a sense of how much you’re spending now, you’ll be better able to plan effectively for your next trips.
And when you get home:
5. Pay your travel bills off in full. Just like paying for experiences in advance, then enjoying them later boosts our happiness, having experiences and having to pay for them on our credit cards afterwards decreases our enjoyment. No matter how much fun that trip will be, you’ll beat yourself up about it if you’re stuck paying the bills on it for months afterwards. Don’t let your summer vacation affect your fall household budget, pay for it now.
6. Go back through that trip journal, total everything up, and make some notes. You may not head back to the same place again, but your friends and family will. Having good notes to share (where to stay/not stay, eat, tips, etc) will make you a happy you wrote everything down. Revisiting those experiences while they’re fresh in your mind will help you cement those family memories for years to come as well. And, you’ll have a good idea of how much you (not some guideline) actually spends on vacation so you can plan and pay for (in advance) next summer’s trip.
Are there any tips you would add to my list of vacation budgeting ideas?