How to Set Your Yearly Travel Budget

travel budget jarSo, you want to travel this year? You’re not alone. In fact, you’re one of the 96% of Americans who said they plan to take a vacation in 2019, according to a survey by Travel Leaders Group.

Whether you’re plotting a cross-country road trip, gondola rides through Venetian lagoons, or a quick over-nighter in the next town over, the real talk is: you need money to make it all happen.

No need to stress though; this is where your budgeting plan comes in. From big-ticket items like airfare to small expenses like sunscreen and souvenirs, you’ll need to track what you expect to spend when you travel. Having a budget will keep you from blowing your entire savings on one single trip. We’re here to help you set up your travel budget if you don’t have one already or fine-tune the one you already have going.

Let’s start with the first step—figuring out just how much you’ll need to get to that dream location this year.

Budget for Travel Early

Once you have your destination in mind, get a general idea of how much the total trip will cost as soon as you can. If you don’t, you won’t be able to plan your finances to make sure you’ll have enough by the time your trip rolls around. What’s the point of getting that great flight deal if you’re stuck ordering from the fast food dollar menu during your entire trip? Here’s how to plan a travel budget:

1. Figure Out Your Travel Goal

Do you want an epic ski trip in Utah in December or a week-long beach vacation in Hawaii? Have two or three options and look at the best times to visit these places. Some ideas will be cheaper, others more expensive, but being flexible lets you choose the best destination at the best time for you.

2. Set Up Flight Trackers and Research Hotel Prices

Once you have your list of potential destinations, sign up for fare watchers like Scott’s Cheap Flights or Google Flights to alert you when flight deals pop up. Check the airline’s website for the “expected” price during your travel window to give you an idea of what you can expect to spend on airfare. Use Roomkey to research prices on lodging to get a good idea for how much a room is going to cost during your trip.

3. Double It!

After you have a general idea for how much flights and hotels will cost, double that number. Trips include more than just transportation and lodging. By doubling the amount of your flights and lodging, you’ll give yourself the extra padding for cabs, meals, souvenirs, activities, etc during your trip.

4. Make Monthly Savings Goals

Once you have your target amount, break that number down into monthly savings goals. For example, if you need $5,000 for a trip 12 months from now, you should save at least $417 each month. But we recommend adding another 10% on top of that just in case. That would bring your monthly savings goal up to $460.

Make sure those monthly saving goals are part of your overall monthly budget. Consider it an expense even though you won’t spend it just yet. Set up a separate travel savings account at your bank or use savings apps (see below) to earn money while you save. Auto-depositing your savings goal will keep you from forgetting to deposit cash into these savings accounts.

5. Sign Up for Free Hotel Loyalty Programs

Here is a helpful money saving tip from the travel experts: sign up for hotel loyalty programs at the hotel chains that you think you’ll stay at on your trip. They’re free to join, and you’ll get discounted hotel rates, upgrades, free breakfast, ease of booking, and more—things you can’t get if you book through an online travel site like Expedia or Booking.com. Once you’ve got your loyalty program in place, you can find the best rates using Roomkey, which lets you search multiple hotels’ loyalty rates at once.

6. Use Credit Card Points to Your Advantage

If you’re savvy with your credit cards, you can cash in those mileage points for airfare, free hotel rooms, or free checked bags, so be sure to factor those potential savings into your budget. Read our post about airline and hotel credit cards to learn more about how to make travel credit cards work to your advantage.

7. Anticipate Your Vacation Spending

Obviously, transportation costs are a big factor to budget for—whether you’re flying, driving, or taking a train. Lodging and accommodations will be your next big expense, but little expenses can sneak up on you and bust your budget.

Based on the expenses listed below, anticipate what you think you’ll spend each day. This will keep you from overspending on food, tours, or other costs that pop up during your trip.

Some expenses often overlooked include:

  • Luggage fees
  • Rental car, subway, or cab fare
  • Tips and gratuities
  • Tour and activity costs
  • Meals, snacks, and drinks
  • Travel insurance
  • Vaccinations
  • Emergency items like forgotten sunscreen or medications
  • Souvenirs
  • Replacing lost items

family eating a meal next to the beach

How to Keep Track of It All

You don’t have to have a CPA license to do this part; listing expected costs is as easy as creating a simple spreadsheet. Make a row for each type of expense. For instance: for meals, decide how many lunches you’ve budgeted for and at what cost per day. Do this for every expected expense, and you’ll have an idea for how much money you’ll need per day.

Check out Microsoft Excel’s Trip Planner for a user-friendly spreadsheet designed specifically for travel budgeting.

If spreadsheets make you break out into a cold sweat, turn to other technologies. Lots of great apps are designed specifically for setting a budget, and some are even geared for one-time splurges like a vacation.

Here are some great apps that can help you create your travel budget:

  • Wallet – Wallet is a personal finance planner that helps you save money, plan your budget, and track spending. Basically, you become a finance manager by planning and managing your money. The app has a “Goals” tool that lets you set specific goals and then creates a plan that works for you, making it much easier to stay on track.
  • Trail Wallet – Trail Wallet keeps track of travel spending. List what you want to spend in each category, such as lodging, food, and excursions. Then keep track of how you’re doing throughout your trip.
  • Acorns – Set a goal, and Acorns will link to your bank cards to set aside spare change or extra cash as you go about your day with Round-Ups and Recurring Investments. We’re talking pennies here, but even pennies add up.
  • Digit – Like Acorns, this app also analyzes your daily spending habits and squirrels away extra change into dedicated goal accounts (like for a vacation). The app automatically moves money from your checking account to your Digit account when you can afford it, and you can withdraw your money anytime.
  • You Need a Budget – This app lets you create a personal financial budget and gives every dollar in your account a “job” ranging from paying down debt or saving for a goal. Get a snapshot of what you actually spend and see how you can make your dollars work for you instead.

Save Time and Money with Roomkey

Planning ahead and knowing which tools to use will save you the heartache of overspending or scrambling at the last minute for accommodations. Roomkey is great for planning, booking, and saving. Here’s why:

While people think they’re getting a better deal on a hotel by booking with third-party online travel agencies (OTAs) like Priceline or Travelocity, they’re not. In fact, most hotels have those same prices or better if you book directly through their own websites. If you do happen to find a better price on a third-party site, most hotels will match that price and even add an additional percentage off.

Roomkey was created by the hotel brands that you know and trust to make finding a hotel easier and more reliable. You type in the location and the dates you need, and we’ll list all our partner chains and their prices in one place. Once you find your dream hotel, click on your selection to book direct. We’ll send you straight to their site for your convenience.

When you get your travel budget in gear, rely on Roomkey to help you find the hotel that’ll turn your next travel adventure into a “10/10 would recommend” kind of trip.

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