How to Avoid Financing a Vacation

Many of us enjoy going on vacation. I love to travel, and I love going on trips. With summer coming up, when my son and husband are out of school, it’s fun to plan vacations. However, when planning a vacation, you have to do more than just consider the logistics of the trip. You also need to consider the financial aspects of your vacation.

Don’t Borrow Money to Travel

Vacations can get pricey, especially if you add in airfare and hotel stays. It can be tempting to put the costs related to a vacation on your credit card, but it’s best not to. With some planning, you can take a vacation without borrowing money to do it:

Photo by Powderruns via Flickr

Plan a Staycation

Sometimes, all I need is a small getaway. A staycation doesn’t always mean that you stay in your hometown. A staycation can involve driving to a place a few hours away and staying a night or two. The idea is that you remain within a few hours’ drive of your home. I like to think of camping as a staycation as well. A mini-vacation or a staycation is often a little easier to budget for than a big trip, and there are fewer things that can go (expensively) wrong.

Saving Up for a Big Vacation

Of course, sometimes it’s fun to go on a big vacation. If you want to do this without borrowing money, though, you will have to plan ahead. You might even need to save up for more than a year, if the vacation is going to be really great. This can be a great opportunity for your family to draw closer together by working toward a shared goal. Here are the steps to follow as you prepare to save up for a big vacation so you don’t have to finance it:

  1. Estimate the costs: The first thing that needs to be done is to estimate the costs. You can use fuel cost estimators online for road trips or you can check airfare prices. You might want to take on 20% more if you plan to take your trip a year from now, since you never know if fuel prices and airfares will rise. Get an idea of what your costs will be in hotel, food, and admissions to nearby attractions.
  2. Figure out how much you will need to set aside each month: Once you know how much your vacation will cost, you simply need to set some money aside each month to work toward your goal. If your family vacation will cost $3,000, and you want to leave in 12 months, you will need to set aside $250 a month to reach your goal.
  3. Make a plan to find that money: Next, as a family, decide what you can do to get that extra money. Look at your budget and decide where you can cut back and save money so that you can put money into a high yield savings account for the trip. Then, consider ways to earn extra money. The kids could do odd jobs around the neighborhood. You can start a side business. Think of ways to help your vacation fund grow. You can even let others know about your goals. They can get you gift cards to help out or provide you with money for your trip fund, instead of gifts, for holidays and birthdays.

While you are planning this far in advance, it is also a good idea to look for discounts and deals. Set fare alerts and deal alerts so you know when good deals come up. Booking in advance, using money from your vacation fund as it grows, can help you save. If you have a rewards credit card, you can plan your budget so that you buy groceries, gas, and other regular purchases with the rewards card. Pay it off every month so you don’t have to deal with interest, and let the points add up. Do it right, and some of your travel will be free.

About the Author

By , on Apr 27, 2011
Miranda Marquit
Miranda is a professional personal finance journalist. She is a contributor for several personal finance web sites. Her work has been mentioned in and linked to from, USA Today, The Huffington Post, The San Francisco Chronicle, The New York Times, The Wall Street Journal, and other publications. She also has her own personal finance blog: Planting Money Seeds.

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Leave Your Comment (4 Comments)

  1. Kevin Mulligan says:

    @Terry: I’m doing the same thing this year with a conference. Not too much vacationy things, but still get to go to a different city and write it off.

  2. Terry says:


    Good article.

    Another angle on taking a vacation is if you own a small business and you can attend a conference or meeting related to your business, you can deduct many of your travel expenses.

    I own a small book publishing LLC and drove to Denver last year to attend a seminar. I also did a lot of vacationy activities, but because I did both things, I could deduct travel & hotel costs between Denver and Tucson.

  3. Mark Fuller says:

    I agree on not borrowing money for a vacation. You go for a vacation because you have an extra saving. why forced a vacation if you would be buried in a debt situation. thank for the tips on saving for a vacation. 🙂

  4. Scott Messner says:

    We as a family have always taken staycations within 3-4 hours of home. Not to say we won’t someday go somewhere far away now that the kids are old enough. Staycations are so much easier both to plan and pay for.

    Ideally, you should have your deductions set correctly so you get little in the way of a tax return. If you do happen to get a sizable one, they are a great source for vacation funds.

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