How to Budget for Your Summer Vacation

Planning your summer vacation can be a daunting task. But who doesn’t need a break from reality now and then? While you might be tempted to go all out on an extravagant vacation, it’s essential to keep your budget in mind. In fact, the average cost of a one-week trip in the U.S. for one person is $1,558!

Why You Need a Vacation Budget

While basking in the sun on vacation, it’s so easy to swipe your card, especially when food and drinks are involved. Unfortunately, the consequences of each swipe will await you after the trip is over. When you have a predetermined budget, vacations tend to go much smoothly.

Not sure where to start? Let’s explore how to budget for your summer vacation in three easy steps — plus look at some simple ways to save money on vacation expenses.

Start Planning Your Vacation Budget Early

Do you already have plans to go to Disney World, the beach, or even Europe — or are you still flipping through travel magazines for inspiration? Whether or not you have a destination in mind, you need to calculate how much you can reasonably spend on your vacation. And being honest about what you can afford is an important first step.

Once you have a number in mind, open a high-yield savings account to act as your vacation fund. With your new savings account, you can set up direct deposits from your paycheck or manually transfer the funds from your primary checking account to your vacation account after payday.

Always make sure that you can still cover all of your essential bills and expenses pre- and post-vacation.

Emergencies and unexpected bills are inevitable, so it’s also important to set money aside in an emergency fund for such unforeseen circumstances, ideally before you start saving for travel. A vacation should never put you in debt.

If you are an avid traveler, continue to contribute to your vacation fund year-round to ensure you always have money for a new adventure. Just remember to leave room in your budget for retirement investments as well.

Take a Look at Credit Card Rewards

Travel credit cards offer a convenient way to budget for and lower the cost of your summer vacation. Such cards typically allow you to accrue flight miles or rewards points that you can redeem for free or low-cost travel or accommodations. Some travel credit cards even offer additional benefits like travel insurance and no foreign transaction fees.

However, opening a new credit card and frivolously spending just to get the rewards points or miles can raise your overall travel costs and quickly put you in debt. Instead, be strategic with your purchases. For example, consider only using the credit card to pay for bills, gas, and groceries. By using your credit card for essential budget items, it minimizes the risk of making an impulse purchase.

If you are going to leverage credit card rewards, pay the credit card balance off every month to avoid accruing interest. When you pay interest on credit card debt, you’re giving away money that could have been used for your summer vacation.

Never swipe more than what you have in the bank to pay the card off. You know yourself best; if you are not disciplined enough in your spending habits, don’t risk using a credit card just to accumulate rewards.

Search for Deals

If you are flexible about when and where you go on vacation, you can choose a destination based on deals. Most of the time, you can find lower-cost flights and hotel accommodations if you don’t have your heart set on a given place or time. But if you are set on a specific destination, consider going during the off-season when prices may be lower.

The more money you save on travel and lodging, the more you can spend on vacation outfits, entertainment, food, and souvenirs!

To save on flights, check out:

For finding great deals on accommodations, we recommend:

You can also check with the airlines and hotels themselves; sometimes you’ll get the lowest price if you book directly. For example, booking directly with Delta via Delta Vacations allows you to get great bundle deals and use miles accumulated through credit card purchases to significantly lower the cost of your vacation.

If you need a vacation but have limited funds and can’t find any good deals, don’t fret. Consider a staycation instead. By exploring a nearby city or going on a road trip to a neighboring state, you can experience a new place on a much smaller travel budget without the stress that comes from overspending on vacation.

How to Save Money on Vacation

Vacations are expensive, plain and simple. When you start to flesh out your vacation budget, it’s easy to become overwhelmed by the growing list of expenses — from airfare, car rentals, and other forms of transportation to hotels, activities, and food.

Instead of trying to cut back on small items, you’re better off saving on the big-ticket items such as flights, accommodations, and food.


Here are a few tips for finding a cheaper flight without having to go with a low-rated airline.

  • Look at off-peak travel times. Overnight or early-morning flights are typically cheaper. Stay away from Friday and Sunday; by leaving on a Tuesday instead of the weekend, you could save at least 20%.
  • Book your tickets several months in advance. It’s best to book around two to three months ahead for domestic flights and anywhere from three months to a year in advance for international flights.
  • Follow the airlines on social media. Major airlines often post about any deals or promotions they may be running.


Hotels are not your only option for travel accommodations.

If you’re traveling solo, consider using a hostel where you’re staying. These are especially popular in Europe.

If you’d rather have a house, try using Airbnb or VRBO for vacation rentals.

If you’re up for company, split the costs among friends or family members.

Before you book anything, look at reviews to get a good idea of where you will be staying. Past visitors’ thoughts on the accommodations may help you avoid a bad lodging experience.


You can spend a lot of money if you’re eating out for every meal. Try some of these strategies to cut down on vacation expenses:

  • Save on breakfast and lunch. Get a grab-and-go breakfast or lunch from a grocery store a few times during your trip. The deli section might surprise you!
  • Buy groceries. If you have access to a kitchen where you’re staying, cook a few meals. Who says home-cooked meals only have to be at home?
  • Find deals. Look on Groupon for any deals for local restaurants. If you’re able to wander off the beaten path, you might find cheaper restaurants outside of the major tourist areas.
  • Dine for free. If you’re staying at a hotel, check if they offer complimentary breakfast and/or dinner. Everybody loves free food.

You don’t have to miss out on a summer vacation just because you think it’s not in your budget. You just need to be realistic about what you can afford, build a budget ahead of your trip, and pay attention to your spending decisions while on vacation.

Need Help Building a Vacation Budget?

If you’re struggling to find room in your budget for a vacation, Felton & Peel Wealth Management is happy to help. Our advisors can help you build a budget that works for you while improving your financial well-being. So connect with us online or give us a call today to get started.

Malik S. Lee, CFP®, CAP®, APMA®
Malik Lee is the Managing Principal of Felton & Peel Wealth Management. A CERTIFIED FINANCIAL PLANNER™ with more than 15 years of financial services experience, he is a Guest Lecturer at Morehouse College, serves on the CFP Board Council of Examinations, and is a Board Member for the FPA of GA.
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