How to Budget for a Vacation

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For most people, planning a dream vacation means setting aside some money in advance. But before you can save up for your trip, you need to know exactly how much you’ll need. If you’re wondering how to figure out a budget for your next trip, take the following steps to put together a good plan:

– Know how much you’ve got. Figure out how much you can realistically set aside each month to save up for your vacation. If the amount is lower than you’d like, consider cutting back your spending in other areas to save up faster.

– Pick a destination. Major expenses, including airfare, lodging, and food, can vary dramatically based on where you’re going, so trying to set a concrete budget before you know your destination won’t get you very far. If you’re worried about money, it may help to pick a type of vacation and then a destination that fits. For a short trip, you may be able to swallow the high cost of food and activities if transportation is cheap. On a longer trip, however, low day-to-day expenses may make up for an expensive plane ticket.

– Set your priorities. You’ll often have a variety of options for most of the things you’ll buy. You may be willing to get your food from a grocery store, for instance, but be absolutely unwilling to forego a rental car.

– Plan for the little things. Don’t let your budget die the death of a thousand paper cuts. Little things like fees for checked bags and parking costs at the airport can add up. You might want to use an online calculator to make sure you don’t forget any of the small expenses that can crop up on vacation.

– Build in a cushion. Always make sure to give yourself room for error. Once you calculate your costs, set aside between 10 and 15 percent extra so that you won’t run out of money if your numbers were off.

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