How to Budget for Travel


I want to go on vacation so bad right now. These cooler temperatures are especially making me want to travel north and see all the fall leaves that I don't really get here in Oklahoma. This time last year, Jordan and I were in South Dakota having a great time seeing Mount Rushmore and staying in our little cabin in the woods.

Every single vacation we've been on since we got married has been fully budgeted for before we left. There are plenty of blog posts about traveling on a budget, but I thought I would share with you how we budget for travel throughout the year and why (we think) it's a good idea. Some people act like traveling is no big thing and everyone can do it easily, but I feel like that's not true for everyone. Traveling is a big deal for us, and it's something we save up for and don't do very often.

The advantage to budgeting for your travel before you go is this: completely guilt-free spending the whole time you're gone. If you know you have enough money in the budget to go on vacation, you don't have to worry about going to a fancy restaurant for dinner one night or buying some souvenirs. You won't get back from your trip to wherever and spend the next six months paying off your credit card... it's already paid for!

In order to budget for travel, we do a few things:

1. Set up a separate travel savings account.

I've talked before about the Capital One savings account we have set up. It's a bank account separate from your credit card or regular bank where you can create multiple accounts for different things. So, for example: we have one Capital One account with smaller accounts within it. One for our house fund (which is now our 3-6 months living expenses), one for travel, one for Christmas, etc. This keeps your travel money completely separate from any other money you have, so it's easy to tell how much you have to work with. If you're interested in learning more about our Capital One account, here is a referral link!

2. Make an automatic payment into the travel account every month.

How much you put in is up to you. We have it set up to automatically move $50 from our regular bank account into the travel fund every month. If we happen to have extra at the end of the month after paying our bills, we can decide if we want to put some of that money into our travel fund. Sometimes we put a couple hundred dollars extra; sometimes we don't put any extra money into the fund, but by putting a certain amount automatically, we're always putting something into the travel fund, and it can sit there and accrue interest. Fifty dollars isn't a lot, but it's something, and every dollar adds up!

Here is a recent example where doing this paid off for us: 
This past June, I went to the Bahamas on a work trip, and at the last minute we decided Jordan was going to come along with me. He was staying in the hotel room with me (paid for by my work), but we were responsible for paying for Jordan's flight, which was going to be over $500. At first I freaked out and was like, "We don't have an extra $500 to spend in the budget!" But then I looked in the travel fund and realized we had more than enough to cover the flight. We just transferred the money back into our bank account and paid for the flight without any problems.

3. Start saving early for specific trips.

Okay, so we automatically put money into the travel fund each month, but that's just so we can keep something in there and use for short-notice trips and short, inexpensive weekend vacations. If we know we will be going on a specific vacation, we start putting more money each month into our travel fund (on top of the automatic payment). 

For example: Jordan and I are currently saving for a trip to Europe in the fall of 2016. We don't know any logistics like exactly when we're go, if we'll take R, or even if we'll end up going, but we want to go and we are saving money to go. We started saving at the beginning of this year and will put money into our travel fund the rest of this year and next. The plan is that by the time we go to Europe, we will have enough money saved to pay for our trip!

Of course, when we go on vacation, we don't know exactly how much we will be spending while we're gone. It's impossible to know how much you'll spend on food and things like that, but you do know how much your flight or hotel will be and whether or not you plan on buying tickets to a museum or other local attraction. The idea is just to have enough money to cover the basic expenses and things we think we'll be doing so that we don't have guilt about spending money and having fun.

So that's what we do to create and maintain our travel fund and save up for trips. We love not having to pay off our credit card after we come back. That's no fun at all.

Here is a great way to jump-start your savings if you aren't used to putting money aside. It's a 52-week challenge where you save one dollar for each week of the year ($1 for week 1, $2 for week 2, $3 for week 3, all the way to $52 for week 52). By the end of the year, you have over $1,300! You can even double this and put aside $2 for week 1, $4 for week 2, etc., and have $2,600 at the end of the year if you plan on going on a more expensive vacation.

I'd love to know what you do to budget for travel (or if you budget for travel). We're always looking for good tips and ways to be even better about saving!

Do you have a travel fund in your budget? How do you budget for travel?
Ashley Lillis said...

We have a separate account set up for traveling too. It really helps when we're trying to pay for the big things for vacations like flights or hotels.

Beka @ Sunshine to the Square Inch said...

I really admire your discipline with budgeting. I wish I were more that way but I think it takes practice.

I'll be honest, we aren't huge budgeters. It's hard to budget living abroad and with our lifestyle. We track what we spend and we try to get an 'estimate' of what we will need, etc.

We try to watch our pennies and save where we can (like not buying trash bags, or washing out ziplock bags out, etc.) so we save money other ways.

I think with traveling too we try and use credit cards where we get cash back, especially for flights! If you go to Europe a way to save money is through hostels (if you don't take R that is). It is cheap and can save a lot. We also try and stay with friends when we can.

Good job, budgeting friend! I hope you guys go to Europe because I know you have talked about it a few times on the blog. That would be so fun!

Caroline @ In Due Time said...

You are right there are tons of posts on traveling on a budget (including one I have) so I think this is a great idea full of so much good information! I wish we planned this much in advance. I think putting money aside every month is a great idea!

Rachel said...

We've never really budgeted specifically for travel before--we've always just had one savings account for everything associated with savings and then we've pulled money out of that for any trip. Now that we're living without so much savings anymore, haha, and I do want to go on a vacation for our 5th anniversary in December, I am doing the strategy of specifically setting aside a little bit of money from each time I get paid for our trip. We have yet to pick a destination though--which is really weird for me. Usually I first get my heart set on going somewhere, and then work to figure out a time to go. Now, we have the anniversary, and Angel's school is closing for a week in December, so he's not working, but I have no burning desire to go anywhere other than Tokyo Disneyland, which would be a bad idea because 1)Christmas week is too busy at Disney anyways and 2) Pretty sure my little vacation savings wouldn't go far there! If I just had the destination that would sure help with the planning AND with knowing how much to save.

Chesson | Magnolia+Main said...

The separate account for traveling is the greatest thing. Ever. We just started one this summer and it made our trip in September to Louisville a breeze. Hotel? Paid for. Gas? Paid for. Football tickets, museum tickets, dinner out? Paid for. I'm glad y'all love the separate account thing, too!

Ali said...

We set up a travel savings account, and we do automatic transfers plus a little extra that varies each month. In the past, we've just used the extra pay checks we both get each year (yay for biweekly pay periods!), but I like having the savings account set up. Then I can see how much is there and start to pre-plan a bit. Next summer we're taking a family road trip to Seattle, and we're thinking of going to Puerto Rico for our 10th anniversary (3.5 years from now), which will take some savings!

So, no new tips, but it's working for us.

Sara Oss said...

We have an online savings account that we match to the limit on our credit card and that we use to pay off the things we put on it: travel, expensive meals, event tickets, furniture, etc. Instead of paying off a card, we pay ourselves back by refilling the savings account whenever we dip in to it. This works for us because we get to be both impulsive and responsible with our spending, and it's much simpler than having lots of sub-accounts for individual categories.

I should add that the credit card we use is only for larger purchases and so we're not separating between "everyday" expenses and bigger ticket items when we go to pay it. We have a card with a much lower limit (I think $300) that we carry with us regularly and use for things like gas and groceries.

Kerry @ Till Then Smile Often said...

I like the idea of having a separate account you can transfer money into each month. I don't really travel much, most of my vacation time is used on little house things that I need the day off for but I want to start travelling more so this is great.

Maria said...

We don't have a specific budget for travel, but we do save, save, save and use our extra for trips. We are always looking for good deals when we do travel and take the time to research every option. My favorite money saving tip in Europe is to stay in Air Bnbs rather than hotels and they will likely have way more amenities that will be useful if you take R along, especially a fridge and washer and dryer. We found an Air BnB in Amsterdam was amazing and saved us probably $200/night.

I would also recommend looking for a no foreign transaction fee credit card if you go to Europe. It hurt every time we bought something with our card, knowing that we'd get hit with an extra fee...especially when I had to use our card to pay for a public restroom in Iceland :)

Breenah A said...

We don't travel often, but are going to next fall because Jarrod's best friend is getting married. I think we're just planning on using a bit of the tax return for plane tickets (luckily we can borrow one of their cars and stay at their house so we're saving money on hotel/rental car). I try to put money into a regular savings account, but something always comes up so I can't even start a separate travel savings account.

Mimsie said...

I like your practical suggestions. As well as the weekly donations to the travel account, I like to keep a jar and toss all our coins into it. It really adds up by the end of a year. We use that little extra money for souvenirs, special meals or whatever. Saving up now for a trip to the east coast.

Jamie said...

we are planning to take a big trip next summer, and so we use a similar "separate account" transfer, except ours is back to our US bank account. it works great since we can only transfer money one way :) for a while before New Zealand we pulled cash out and kept it in an envelope, and that became spending money. we are also taking a trip this Christmas... originally it was going to be longer and twice as expensive but we opted to cut it short in favor of making the summer trip easier to pay for.

anyway, it sounds like you are doing a great job of planning ahead and I hope you DO get to take this trip!

Jen@Almost Gypsy Soul said...

I love Capital One accounts! I have a "few" separate accounts myself! I also do a vacation fund....however it is going to be pretty much depleted after paying for my Ancient Inca Trail hike to Machu Picchu and Galapagos Islands trip in May.....but that trip would have been impossible without that savings account. I've been saving since I got back from Europe in 2012!

Kristen @ See You In A Porridge said...

travel is a huge deal for us, and a huge deal for our bank account! lol. i hate when people act like it's no big deal, but for us it is absolutely a big deal. we have to save and say no to certain things in order to make travel happen, and sometimes my husband gets kinda mad at that haha but travel is so important to me, and i know we will slow down when we have kids so i don't want to slow down now! we only just opened a separate account for it though, seriously so brilliant, no idea why we didn't do it sooner!

Tracy said...

We were charter members of the Disney Visa card and I collected points for five years to pay for a Disney trip. It paid off with hotel and tickets totally paid by the time we went.

Laura Darling said...

We've gone on two big trips since we got married and budgeted for both. I get paid mileage for work and my expense reports are pretty decent, so we saved those up! That way we didn't take anything from our paychecks, and if the expense amount fluctuated from month to month it didn't matter too much! And we paid for our trips in full before we went, I couldn't enjoy myself if I knew we would be paying it off for months and months afterwards!

Carolann said...

We do the same thing! We use a software called You Need a Budget. You download it onto your computer and you can sync it with your credit cards, checking and savings accounts, and your other funds like your retirement account. You can make a budget for different categories each month. There is also an app for your phone, which my husband and I use throughout the month to update our spending. So if we go grocery shopping, we log it into the app, and then we can each see how much money we have left in our grocery budget. Anyway, we have a separate budget in there for travel. We try to just see how much money we have each month depending on what's going on, and then allocate money to travel. Some months, nothing goes in the travel fund. But I like the idea of doing something like $50 per month automatically. It's something to talk to my husband about for sure!

Rach said...

We have a separate "travel" savings account too! We started it when we decided to go to Italy a couple of years ago. We actually ended up overbudgeting a bit and had some $$ leftover when we came home. That was definitely nice. But yeah, we always do our research and get an idea of how much a trip is going to cost us before we go and then we set aside that money knowing it will be for the trip. For bigger trips, that takes a little bit of time, but it's totally worth it!

Also, I know I've said this before, but I'm super excited about your Europe trip in 2016! I hope you'll still be able to go! In theory we're headed to Greece and Italy next year (and maybe a little country hopping while we're there). It depends on a couple of factors, but we're hoping we'll be able to go! :) Who knows, maybe we'll be in Europe around the same time! :)

Paige @ Reasons to Come Home said...

I'm thinking we should start a travel account. We use the envelope system and don't have one designated for travel but the account seems to make the most sense. This may be a dumb question but do you use Capital One as your main checking account? If so, do y'all have like a physical location that you use like most banks?

Sarah @ Sometimes Photojenik said...

These are great tips and I couldn't agree more with the idea of budgeting for travel, it doesn't just happen. People always wondered how my family traveled so much especially when didn't have a ton of money but it's because my parents budgeted really well for it. That being said... what is this Capital One savings account goodness?? I can't remember you ever mentioning it and I would love to know more! Also, it's funny you should mention a Europe trip because I currently know a married couple that say they are either going to have a baby or go on a trip to Europe... I think I should send them your way and show them that they can do both!