Hullo fellow Savers! Apologies for the two-plus-week break, but I was on vacation … and then recovering from vacation for another week.
So, what better way to get back into it than a post about vacation spending? Now I could talk about finding the best airfares or cheap lodging, but one aspect I feel like isn’t covered as much in the media is how to keep from overspending once you’re ON vacation. Even the most frugal people I know can go over budget while on a trip.
Back before my financial near-meltdown, overspending wasn’t even a possibility, because I put all vacation spending on credit cards — with no plan to pay them off. So I had no concept of how much or how little I should spend.
But nowadays, my household typically comes under budget on our trips. Only rarely have we gone a bit over or even spent the full amount allocated. I don’t have one fixed method; it depends on where I’m staying and what we’re doing. But I have a few rules of thumb:
- Save up for the vacation well before it happens. We put a certain amount aside each month, and time our vacations for when we’ll have enough saved to take one. Now, I often purchase the airfare and hotel beforehand, but only when I’ll be able to pay off the credit card before it accrues interest.
- Figure out how much we have available to spend. Once we decide when we’re going, I calculate how much money we’ll have set aside by the time the trip happens, and that’s the total we have for the trip. As I book the various planned expenses (car, airfare, hotel, etc.), I subtract it from the total. Whatever we have left is the amount we’ll get to use for discretionary money.
- Figure out how much that is per day. It’s not like we spend the same amount every day; on this last trip, some days we went to mostly free activities and ate at home, while other days we went shopping and treated our friends to dinner. But having a daily average gives me an idea of what kind of trip it can be; fairly decadent and indulgent, or modest and thrifty. I don’t always look to cut corners; if we have enough money after airfare etc. to kick up our heels, I have no problem with that.
- Track spending during the trip. I don’t think many people do this; one friend we were staying with was taken aback by it at first, but said it made sense once I explained what I was doing. Now that I’m more in control of my money, I find it hard to relax if I don’t know everything’s OK on the spending front. I know this because occasionally I’ve lost track of spending while on vacation, and the rest of the time I’m kind of worrying in the back of my mind that we’re overspending. On this particular trip, we ended up being well under budget, and I liked knowing that because it meant we felt comfortable making a few purchases that otherwise we probably would have nixed, for fear of blowing our budget.
So how do I track spending? It really depends, and often it’s nothing fancy. This particular trip I wrote down expenses and subtracted them from the total amount I’d determined we could spend. I carried the piece of paper wherever I went, we all saved our receipts, and whenever there was time to sit and relax I’d pull out the receipts, write them down, subtract from the total, and throw away the receipts so I knew I’d already accounted for them.
This isn’t a perfect system; at the end of the trip I compared what I thought the bank balance would be and was about $150 off. But, I checked off every purchase and I had written them all down, so I must have made a math error somewhere. Sometimes I use a spreadsheet or carry a calculator, so I’ll probably do one of those two things the next time we’re on a long trip. But considering we were traveling for two weeks and had a budget of thousands of dollars, that amount of variance isn’t the end of the world. I’d already determined we were under budget, and the correction from the math error was in our favor — we were even more under than I thought.
Another trip, I took out the cash we were allowed to spend and divided it into envelopes marked for the various activities we planned, with a separate envelope for each of our discretionary spending money. That worked pretty well, though it was harder to keep track and I worried about losing the envelopes. And a couple of things still required using a credit card while we were there, so it got a bit complicated setting that cash aside. Another time, when we had a private living space and Wi-Fi, I tracked our receipts in a spreadsheet. That was easier, and more exact than doing manual subtraction, but it does require that you have a computer and/or internet access. (We don’t have smartphones; I would imagine there are ways to keep track more easily that way.)
Whatever the method, I’ve found it actually increases my enjoyment on a vacation to know that we’re on track or can make adjustments to get back in balance. How about you? Do you have any particular methods for controlling your spending while on vacation?