Vacation Budgeting

My wife and I took a road trip for our vacation this year, driving from Texas to Indiana and back. This worked out well for us, because her parents were spending the week in Missouri, which allowed us to see both sets of parents and avoid having to pay for a hotel on the two day drive to Indiana.

I haven’t done a road trip of this magnitude since I was in high school, but the trip was enjoyable and taught me a few things in the process.

I highly recommend that you budget for your vacations, both in your annual (normal family) budget and well as in a vacation-specific budget. A budget is simply a cost estimate, and in this case I put together a quick cost estimate of what I thought this road trip would cost.

Putting together a cost estimate for the vacation helped me communicate more effectively with my wife and family. Did we have the money to go to musical? Should we buy a one day or two day pass to amusement park? Is it more cost effective to fly or drive? All of these questions require a budget, or cost estimate, in order to evaluate our choices.

My vacation cost estimate also helped me (and my wife) make better decisions about what to do on our vacation. It only took me ten minutes to put together the cost estimate. For the road trip all I needed to know was:

• mileage, miles per gallon, and $/gallon for gas
• food cost estimate per person per day for eating out
• cost estimate for entertainment
• cost estimate for groceries

After preparing the vacation cost estimate it was clear that driving was much more cost effective, even if gasoline reached $4.20 per gallon. This was the case ASSUMING we didn’t need to stay in a hotel on the way to Indiana and on the way back.

The second thing that was obvious was that eating out could potentially eat up our entire vacation budget. This observation allowed us to manage expectations prior to leaving. We packed lunches for the 2 day trip to Indiana and the two day trip back, and we let our parents know that we were planning to eat at home most of the time during the trip. We still went out to eat an average of once per day, but planning ahead allowed us to get the most enjoyment out of those times rather than end up caught eating at some truck diner next to some no-neck trucker named Bubba.

Lastly, putting together avacation cost estimate allow us to save up and pay cash for our vacation. I’d hate to have to spend the next several months paying for our vacation at 20% interest on a credit card. By saving up for the vacation we were able to reduce our stress both during and after the trip, and we were blessed to be able to afford the trip even with higher than normal gas prices.

And don’t forget to deduct any cost savings from going on vacation. For example, if you and your wife are taking an entire week off you won’t need your usual week’s worth of gasoline. You’ve already accounted for the gasoline for the trip, so don’t double count your usual weekly gas costs too. Subtract that cost from your vacation budget. Other costs savings might include:

• reduced utilities costs (i.e. less air conditioning costs for the time you are away). I didn’t do this, but you could….
• reduced grocery costs
• any entertainment costs you would normally incur from the budget
• any dining out costs you would normally have
• Discover card is offering 5% cash back on gas in July, so I subtracted that savings from my vacation budget as well

BTW, we averaged almost 30 miles per gallon in our 2005 Ford Focus, and we paid about $3.90/gallon (more in Texas and Indiana, less in the other states in between).

Image Credit: dbking

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