Summer Vacation [Financial] Planning

8 min read
August 10, 2021

Summer Vacation [Financial] Planning


Is a mid-to-late summer vacation on your mind? Having just gotten back from a family vacation to Mexico, I can certainly say that my trip was a much-needed escape after the year we’ve just had. And with nearly half of the country’s population fully vaccinated against the coronavirus and over half of residents having received at least one dose of a vaccine, more Americans are getting ready to travel. 

If you’re itching to head out on a vacation but haven’t spent the last few months planning a U.S. or international trip, it’s not too late to get started. There’s still plenty of summer ahead of us! But knowing that gas prices reached a record high earlier this month with more people hitting the road, and with prices for flights going up as passenger numbers near pre-pandemic levels, how can you prepare for that getaway without breaking your budget or throwing a wrench in your financial plan?

Whether you’re planning to stay near or go far, a little summer vacation [financial] planning can bring extra protections to your trip as well as reduce stress and help make it more enjoyable. 

And the perfect place to start is with your vacation budget.


After a year of travel restrictions, the average family is planning to spend even more than they did on their 2019 vacations, at $2,122 per household.  Whether your trip is likely to cost more, less, or about the same, here’s how you can find just the right fit for your cash-flow plan.


Have you started your vacay countdown yet? When you budget before you book, it can be helpful to keep your vacation days flexible to get the best prices. Even if you don’t know the exact dates yet, it’s a good idea to put them on your calendar, at least tentatively. This will be a big help when figuring out your budget. 

Pro tip: If you’re in the habit of tracking your cash-flow for the long term — and we hope you are! — work this vacay it into your cash-flow plan by adding it to the bottom of your Budget Plan Worksheet. Then separate out a budget just for this trip so you can stay on target while you travel and in your overall cash-flow plan.

If you got a head start on planning, you may already have some money set aside for your goal of going on this upcoming vacation. This may be especially true if you were lucky enough to have suffered few disruptions over the last year or so, leading to increased savings. And if you held onto last year’s vacation dollars and added them to this year’s travel budget, pat yourself on the back! If not, don’t worry: You’ve likely still got time to plan your getaway.


Depending on how far out you’re planning your vacation, count the number of days or weeks between today and your departure, and make note of when you’ll be paid between now and then. Add up your paychecks along with the amount you’ve saved for this getaway and any other income you expect to receive before you leave.

It’s important to subtract goals from this total first. You wouldn’t want your weeklong vacation to throw off your lifelong plans! So pay yourself first, and keep adding to your Roth IRA, home down payment fund, or motorcycle savings — or whatever else you’re saving for.

Next, subtract the amounts you’ll have to keep on hand to meet your needs at home. Think housing, food, utility, and similar expenses — the must-dos — in your budget. After all, you can’t skip paying rent or your mortgage while you’re away!

Also, consider what you’ll be taking a break from while you travel. Missing your regular spin class or skipping a trip to the grocery store while away? It may offer your budget a little wiggle room. Just be sure not to overestimate what you might be able to save.

After these steps, make sure that your bottom line doesn’t indicate overspending. If it does, go back and see if you’re able to trim costs elsewhere without impacting your savings or core expenses. Once you get that bottom line to zero — or if it shows a surplus — you’ve dialed in your vacation budget, and it’s time to get planning!

The Trip

Hopefully, you have at least one idea about where you’d like to go in mind. If you’ve given yourself multiple options, you may want to plan out estimated costs for each and base your final decision on how much you’re willing to spend. 

Maybe you’ll be biking downtown to treat yourself to a stay at a fancy hotel, driving your SUV to car camp near the hot springs, or flying halfway around the world to visit iconic destinations. No matter where you’re going, you can start by thinking of how you’ll get there. If applicable, research gas or flight costs — or both. 

If you’re driving, you may also want to factor in wear and tear on your own vehicle. That oil change will come up much quicker if you’re putting an extra 2,000 miles on your truck this summer! Relying on other transportation methods? Pricing for rideshares, cabs, public transport, airport shuttles, and more is usually just a click or tap away on your computer or smartphone. 

Then focus on where you’ll stay. You might compare amenities for campsites, short-term rentals, or hotels. And even if you’re staying with family or friends, treating your hosts to something special during your visit can be a sincere way to show your gratitude for their hospitality. Don’t forget to account for it in your travel budget.

Lastly, think about what you’ll do on vacation. First, consider food — as well as drinks and snacks. Then think entrance and tour fees and tickets, costs to rent gear, activity prices, and more. And don’t forget about any cost of living differences between where you live and where you’re going. 

Mark it all down, add it all up, and subtract it from your vacation budget. 

What’s left? If you went over budget, you have a list to use as you go back and see where you can save. Are you willing to stay in a lower-priced hotel? Could you drive instead of flying? Change your vacation dates so you can fly on days when ticket prices are lower? Can you find discounted tickets for events or activities? Might you rent a more fuel-efficient vehicle instead of driving your own? 

Once you’ve (more or less) finalized your budget — and made your final decisions —  it’s time to get booking.


Using your budget as a guide, you can start to nail down your itinerary. As you begin your bookings, look for promotions, especially if your vacation days are flexible. In addition to regular discounts, you may see if you can save additional dough by bundling, like adding your rental car and hotel after buying your airline tickets. 

And of course, consider using your credit card. Your issuer might include perks like travel, rental car, baggage, and emergency insurance all at no extra cost. Before swiping, inserting, or tapping, though, be sure to check your card’s benefits guide to see what’s covered and what’s not. 

Another reason to use your credit card: With the higher prices often associated with booking travel, you could be racking up points or miles for your next vacation. As you book each item, replace your estimate with its actual cost in your budget. Be sure to reconsider the rest of your budget and the total remaining before moving on to your next reservation, especially if you found a deal — or overshot your budget. 

Then, after booking, you’ll know how much you can spend day to day while traveling.


Before you leave, consider what’s actually left in your budget that you haven’t already set aside funds for or booked or paid for in advance. Subtract the cost of any especially pricey “must-dos” — like zip lining in a jungle canopy, taking that guided tour through the ruins, or the once-in-a-lifetime meal at a Michelin-starred restaurant — that could take a large chunk of your daily spending money. Once these and any other big-ticket items are spoken for in your budget, you’ll see what you have left for unforeseen opportunities, souvenirs, and any other “extras” along the way.


Just as when you’re booking, it’s a good idea to use a credit card for purchases whether you’re halfway around the world or just visiting the next city over. That’s not because you can buy now and pay later, but for the extra protections credit cards offer. Remember, you’ve already budgeted for this! 

Check into credit card fees, usage rules, and more so you don’t come back to unexpected charges. Not budgeting for exchange rates, fees for international purchases, and more could really take a bite out of your post-vacation budget. 

You may also want to carry a little cash with you, depending on where you’re going. Changing dollars for the denomination used in the country you’re traveling to while you’re still in the U.S. can mean higher exchange rates. But it can also be one less thing to worry about when you get there. If you choose this route, start tracking exchange rates as early as possible to get the best bang for your buck. And you might not want to exchange too much cash since loss and theft can make it risky.

You could always bring U.S. dollars and convert smaller amounts to the local currency as necessary. This can be especially great when traveling to multiple countries with different currencies since greenbacks tend to be easy to change. 

International ATMs are also a strong choice for many, but don’t forget that exchange rates fluctuate. Plus, ATM transactions tend to incur fees. In general, withdrawing cash from an ATM using your credit card, aka a cash advance, isn’t a great idea due to the high rates some credit card companies charge for these types of transactions. But you may consider asking about such withdrawals when you check into other out-of-country credit card specifics with your company. 

And don’t forget about smartphone and smartwatch tap-to-pay options. You probably just don’t want to make this your only option … only to find out contactless readers aren’t common where you’ve traveled. 

One last note on buying with a card: Don’t forget to tell your bank or credit company that you’ll be traveling so they don’t suspect fraud and shut your card off. It’s a great safety feature, but it could mean a hassle if you’re far from home.

As you work through your vacation plans, keep in mind that your budget should be flexible. Want to take an unplanned walking tour through the old city or treat yourself to a piece of clothing you couldn’t get at home? Go for it! Just understand how it could affect your spending in the coming months and what you might have to sacrifice in the near future to stay on track with your cash-flow plan as a result. 

… or you could add a bit more to your budget for anything that happens spur of the moment. And if you don’t spend all of this extra “fun” money on vacay, you can use the funds to start saving for your next getaway. 

Now that you’ve done the hard work, stay safe, have fun, enjoy your summer vacation!

Jason SpecinerAbout the Author
Jason Speciner is a CERTIFIED FINANCIAL PLANNER™ professional, an Enrolled Agent, and the founder of fee-only firm Financial Planning Fort Collins. He is also a member of the National Association of Personal Financial Advisors (NAPFA) and XY Planning Network. Since 2004, he has served clients of all ages and backgrounds with unique experience working with members of generations X and Y.

Did you know XYPN advisors provide virtual services? They can work with clients in any state! View Jason's Find an Advisor profile.

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