Going on a big family trip sometime soon? You’ll want to think about your family travel budget in addition to all the fun stuff you’re going to do!
If you’re anything like me, you might be losing sleep due to the excitement! However, have you thought about how much the trip will cost you and how much you’ll spend? Most people might say “Oh! Not me!” If that’s not you, all power to you! However, if you’re like most people, budgeting for your adventure may be an afterthought. There’s nothing wrong with being excited for a trip and jumping right into making a list of all the delicious food you’ll eat and places you’ll visit.
However, if you’re aiming to save money, get ahead and live frugally, there’s one very important part of budget family travel that everyone should do. Learning how to travel on a budget with family can help you control your spending without feeling like you’re pinching pennies. Whether you’re doing a budget backpacking trip or a fancy resort getaway, budgeting is for everyone.
Read on to learn about how to create and use a family travel budget.
What is the Average Cost of a Family Vacation?
Before we get into the steps of planning a family travel budget to keep your finances in check, let’s look at the numbers. The average family will spend $4500 on a one-week vacation. Typically, your expenses will include the following categories:
- Transportation – airline tickets, car rental, public transportation etc.
- Food – dining out, snacks, groceries for preparing your own meals
- Accommodation – hotel, AirBnb rentals etc.
- Excursions – outdoor and indoor attractions, museums
- Shopping – souvenirs, clothing, gifts
- Tips (if you’re traveling to a region where tipping is commonplace)
Prices can vary drastically depending on the type of accommodation you choose, whether you choose to eat out for every meal or buy groceries, whether you rent a car or take public transportation, how many excursions you do and how much they cost, and how much shopping you do.
What does this mean for you and your family? Since the price of a vacation can vary drastically, you’ll need to determine how much you’ll want to spend – and what you can afford. How do you go about doing that? Simple – create a budget and stick to it. Let’s get into how to do that.
How Much Should I Budget For a Family Vacation?
When you set your spending limit for your holiday, you’ll want to look at how much you want to spend, how much you have saved so far and the actual date of your vacation. While anyone can put things on credit, we’re aiming to live frugally. Being frugal entails reducing unnecessary spending whenever possible without being cheap – which means avoiding unnecessary interest charges. This means that when planning your budget, you’ll want to only pay for it in cash.
Does this mean that you’re literally taking money out of the bank and paying for everything with dollar bills? Nope – it just means that you’re only paying for things that you can pay back by the time your credit card payment comes due. A good general rule of thumb is to never pay for anything unless you can pay it back immediately. While this may seem extreme, it’s a good principle. At the very least, only put expenses on your credit card that you can pay back once you receive your next paycheck. Again, this isn’t ideal – you never know what might happen. Life is never guaranteed. If you are laid off, would you be able to suddenly pay off the $1000 worth of accommodation expenses you put on your credit card?
How To Save Money and Budget For Your Trip
As a general guideline, take a look at the average vacation for a family of four and use that as a benchmark. If you’re a couple, budget half that amount, so $2,250 total ($4500 / 2).
Next, determine when you’ll take the vacation. If your big escape is 6 months away, plan on saving money for your vacation over the next 6 months.
$2,250 / 6 = $375
Therefore, set aside $375 for your vacation.
If you’re feeling extra ambitious and you want to pay for everything ahead of time, try to save up for it over 3 or 4 months.
$2,250 / 4 months = save $562.5 per month
$2,250 / 3 months = save $750 per month
Choose what works for you and your budget. If $750 is too much to save per month because you won’t be able to cover your regular monthly expenses, let alone put away money for other funds like emergency savings, a sinking fund or retirement, set aside less money per month.
I can’t tell you the best option for you – decide what works best for you and go with it!
How Do I Keep a Travel Budget?
You’ve budgeted and saved up for a vacation, but there’s an additional part to the budget travel process – the actual travel budget. See below for an example showing how much was budgeted for the whole vacation and how much money is allocated to each category. This example is for a couple going on a one-week vacation to a tropical destination.
| Travel Budget | Notes | |
| Travel Savings | 2,250.00 | |
| Expenses | ||
| Airline tickets | 800.00 | |
| Hotel | 700.00 | $100/day |
| Airport transfer | 50.00 | |
| Food | 300.00 | $50/day |
| Excursions, tours etc. | 200.00 | |
| Shopping | 200.00 | |
| Expenses | 2,250.00 |
As you can see, each category has a specific amount of money allocated to it. This will serve as a general guideline to keep you on track with spending on your vacation.
Keeping On Track With Your Budget
Once you’ve undertaken the steps of setting a budget, creating a budget plan and successfully saving up, it’s time to get practical! Your vacation is fast-approaching. You can’t sleep for days before the trip. Finally, the big day arrives. Your suitcases are packed, your Uber is booked and it’s time to head off to the airport!
But wait! Before the fun begins, it’s crucial to keep in mind what you’ve been working so hard to do – being frugal by planning and saving for this big trip. While you’ve successfully planned and saved up the money, you need to be diligent with keeping on budget!
I’ve covered how to track your budget for each category, but you’ll need to keep record of roughly how much you’ve spent in each category.
I like doing this by saving my receipts in a folder. Each time I spend money on something, I write it down. Every night, I track:
- How much I’ve spent on each category
- How much I have left to spend; and,
- How many days I have left on the trip.
If I underspend or overspend on one category, I know I have a little bit less or more to spend for the rest of my trip.
Don’t let budgeting and cheapness ruin the fun, though. If you see a fun, last-minute tour you’d like to do or a beautiful dress you just need to have, it won’t hurt you to spend a little bit more than you planned to. Just don’t go hundreds of dollars over budget! There’s a balance between being frugal vs cheap.
If you went a little over budget one day, don’t deprive yourself of something you see that you want – within reason!
About Family Travel on a Budget
While I could keep talking about the family travel budget, I’d also like to cover some additional tips and tricks on how to maximize your family travel budget. You can focus on setting a budget, planning and saving, but you can also focus on:
- When you travel – high season or low season
- When you book your travel
- If you’re on a backpacking budget or if you’re staying in mid to high-range accommodation
- Which airport you fly out of and if you decide to fly at all
- How much you eat out versus cook your own meals if you’re staying in accommodation with a kitchen
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General Tips for Family Travel on a Budget
Step 1: Determine When You Can Travel
Before you book anything, decide when you can travel. Will you travel in the spring or summer? Generally, high season is when children are out of school – this means June to August will generally carry the most expensive prices.
However, if you absolutely cannot travel during any other time of year, you’ll need to factor higher prices into your budget.
Step 2: Book Your Travel Early
“Timing is everything!” I’m sure you’ve heard that one again and again. It’s basically a cliché at this point – however, it’s an overused phrase for a reason. When you decide to book your travel can greatly impact how much money you’ll spend on anything, including:
- Hotels
- Airline tickets
- Excursions and tours
- Airport transfers
Supply and Demand When Looking at Prices
Most companies employ a dynamic pricing scheme, which means that when demand surges for a product or service increases, so does the price. Closer to the event, the price often increases. It’s for this reason why you should try to book travel as soon as possible! While it’s understandable that you may not be able to plan, say, a year or so ahead, try to book your accommodation and flights a few months ahead of time. Book travel using apps that combine different sites on one place – for both hotels and airlines. Some great ones for flights that I really like include SkyScanner and Hopper. To price compare hotels, look at Trivago or Kayak, an app that lets you compare hotels, car rentals and flights.
On the other hand, sometimes you can score a great last-minute deal. There’s nothing wrong with waiting for a sale. However, if you see a great deal, don’t be afraid to snag it. You may be able to get a lower price later, but is it really worth the risk? It also may be tempting to check the price days and weeks after you’ve booked to feel good about the price. I wouldn’t do this. Why? It can backfire if the price is even lower and you may experience buyers’ remorse. In my experience, after I’ve purchased a flight or hotel and I see that the price is lower, I feel a little regret about my purchase, even if it was a good deal!
Step 3: Be Flexible on Travel Dates and Airports If You Can
A related point to booking travel early – flexibility. I know, I know – you and the kids can only get away in the summer. Or, maybe you’re a single person who can only take time off during December because your other vacation time is spent on local adventures and catching up with family across the state. However, if you are able to book time off in the off-season or the shoulder season, try to do that.
Just by choosing to travel during less busy times, you can save hundreds of dollars! Why? The basic laws of supply and demand. When there is more demand for travel, more people want to book. Often, the number of seats, rooms or excursion spaces exceed the amount of spaces available. Therefore, companies increase their prices because people are more willing to pay for a ticket or hotel room during these times.
Step 4: Communicate Your Spending Plan with Other Travelers
Communicating Your Plan with Immediate Family
If you aren’t able to book greatly ahead of time and/or travel in the off-season or shoulder season, you should not only at least stick with your budget that factors in high-season and later booking prices, but you can do one other thing. When you’re traveling with other people, hold each other accountable. Communicate your spending plan with the other travellers on your trip so you all know roughly how much you should be spending.
If you have kids, be sure to explain to them that they cannot have every single toy they see at Disneyworld. Why? Things cost money. Setting a good example by budgeting and deciding that you don’t have to splurge one every single thing will teach your kids positive habits. What’s more is that minimizing unnecessary purchases helps the environment. When you buy less junk that will eventually be thrown away, you’re reducing landfill. Avoiding purchasing unnecessary items allows you the peace of a minimalist lifestyle that focuses on the simple pleasures of life. On the other hand, be sure to teach your kids that a little treat is okay every once in a while! Don’t spend your entire life pinching pennies. Be frugal and enjoy doing it!
Communicating Your Plan with Extended Family
If you’re traveling with other families or family members and you have different budgets, you can still keep each other accountable. This may be a little bit more difficult if you are budgeting and your mom, dad brother or sister and their family are just spending without tracking it. There’s nothing wrong with this method, but it isn’t the ideal path for you. Don’t hold any judgement and just focus on your spending.
If there’s an expensive activity that your friend wants to do but you don’t, politely say “It’s not in my budget.” However, be sure to save some money for a special dinner or excursion. No one wants to be the cheap family. What’s more is that when you’re traveling, you’re embarking on experiences of a lifetime. Don’t cheap out on seeing that beautiful mountain because you went $10 over budget yesterday. Part of being frugal is being smart with what you spend money on. Some things and experiences in life are worth the price.
Step 5: Take Advantage of Deals
Many places offer deals to attract customers during quiet periods. A couple quick travel tips for you:
- Check out free museum days in the city you’re visiting. Many museums have a designated day or period of time during the day where you can see their permanent collection for free – or sometimes, the entire museum.
- Look into whether you can cut transportation costs by purchasing tickets in advance. Some cities allow you to purchase a daily or weekly transit pass. Check out the local transport system, plan ahead and save!
To make some extra cash, look into a travel credit cards that offer cash back and/or airline miles on spending. Many credit card companies also offer generous signup bonuses when you complete the application process, get approved and complete any spending requirements (if any).
One important point: you might want to skip travel insurance to save on a couple hundred dollars. Don’t do that! If you get sick or injured, you could end up spending hundreds, if not thousands of dollars out of pocket to cover medical costs. Don’t be cheap!
Conclusion – Family Travel Budget
Whether you’re traveling with your immediate family or with other family members, it’s important to make a plan. Determine your vacation destination, how much it will cost and how much you’ll need to save to pay for it in cash without relying on debt.
Now that I’ve covered the essentials of a family travel budget, it’s time for you to start planning the fun stuff for your getaway. Remember to keep the end goal in mind: spending some quality time with family to travel, explore, reconnect and have fun! After you’ve created a budget, go ahead and make that Pinterest board of all the fun food you’ll eat, dishes you’ll cook and places you’ll visit.
Enjoy!
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Janita is a frugal living expert and owner of Frugal Fun Finance. With over five years of personal experience finding and trying out the best ways to make and save more money, she's eager to share her knowledge. Janita's strategies have helped her save thousands of dollars for funding investments and traveling to over 20 countries.
Janita completed training in personal finance at The University of Western Ontario and McGill University, two prestigious Canadian universities. Her expertise has been shared on GoBankingRates, Yahoo Finance, and NASDAQ.com.
