Vacation Budgeting: Your Step-by-Step Guide

With a bit of creative planning and some smart spending, you can take that well-deserved vacation without breaking the bank.  

Few things feel as good as a much-needed vacation. But managing your necessary expenses while the cost of living continues to rise can make budgeting for your relaxing getaway turn stressful. In fact, The 2024 FP Canada™ Financial Stress Index  found that 31% of Canadians are worried about saving enough for a major planned purchase, such as travel. And 19% plan on taking a significant vacation in the next year.  

For the many Canadians who are considering travelling despite their spending worries, careful planning can make all the difference.  

Here are a few tips to plan for your vacation without breaking the bank.

Planning Ahead is Key 

Preparing early will always help you down the road, as it gives you the chance to compare prices and choose travel options that make sense for you. This can be especially helpful when you’re travelling in a group, given that apps like TripIt and Expedia offer family discounts and promotions. If you’re a solo traveler, look out for costs such as additional charges for occupying a room alone. 

Here are more steps to take when planning ahead: 

• Think in advance about a daily budget.  
• Research locations and experiences to get the most value for your money. 
• Set money aside in an account earmarked for your upcoming vacation.  

Avoid Peak Travel Times 

By avoiding travel during the summer, you can save significant money. Alternatively, you can visit popular sunny destinations during the winter, or popular winter destinations in the summer. Doing so can mean cheaper flights, more affordable hotel prices, and special offers or free upgrades (which are frequently offered to attract customers during off seasons). Who knows, you may even find an unexpected — and amazing — experience that you wouldn’t have otherwise.  

Use Loyalty Points and Credit Card Programs 

Many credit cards offer points that can be redeemed to make your next trip more affordable. Shop around to see which option provides you with the most loyalty points or perks for travel. Additionally, you can look for cards that offer significant points just for signing up. You can rack up as many of them as possible by using the right credit card for everyday expenses. However, it’s extremely important to pay off the balance to avoid incurring interest, so be sure you only apply for a card if you know you can do so.   

Set a Daily Budget and Use Cash  

When travelling, it’s all too easy to fall into the trap of using your credit card and forgetting about your budget. The best way to avoid this pitfall is by using cash and creating a daily budget. Spending cash may force you to keep track of how much money you have for your entire trip. This will help you zero in on how much is available to spend each day — and ensure you’re mindful about using your credit card. 

Ease Your Stress with Extra Help 

Traveling is one thing. Planning is another. The truth is, setting up a travel budget can be tedious. But working with a professional financial planner can make the experience a smooth one. According to the Financial Stress Index, 28% of Canadians who work with a financial professional — such as a CFP professional or QAFP^® professional — are less likely to be stressed about money than those who don’t. Seeking advice from a planner can give you the confidence you need to take that vacation, minus the unneeded stress! 

To find a CFP professional or QAFP professional who can help you plan to finance your next getaway, use the Find Your Planner tool.

Jackie Porter is a CFP professional at Carte Wealth Management