Traveling is expensive, especially if you’re traveling outside of the country. The average 12-day international trip costs over $3,250 per person, so there’s a lot of room to save. Well, those are in US dollars, meaning you can expect up to $4,200 per trip from Canada!
Well, that means there’s a lot of room to save, but there’s good news. There are also a lot of ways you can save big on your next trip. Let’s talk about how to plan a budget vacation like a pro!
1. “Budget Vacation” Doesn’t Always Mean Budget
When shopping for airfare, lodging, and car rentals, keep a critical eye open. Sometimes “budget” airlines are the same price or more expensive than other options but without the same comfort.
For example, if a budget airline costs $250 for a roundtrip with one stop and a mainstream airline costs $350 for a consistent flight, you may be tempted to choose the one stop option. However, if you have to pay $60 for your carry-on and $50 for your checked bag on the budget airline, then you’ve spent more on the flight while sacrificing a lot of comforts and conveniences.
Keep in mind, that isn’t a fake example. These distinctions happen on several airlines that you’re familiar with, as anybody who has flown on them can tell you. Apply this logic to car rentals by comparing insurance rates and hidden fees.
Also, when booking Airbnbs or other lodging options, take your time and look around. Bring yourself to the checkout page as many times as possible, because only then will you find the real price. It may say “$75 a night” but then come out to $300 for two nights, so always look at the final product before booking.
As a general rule when shopping for budget options, if it sounds too good to be true, it probably is. Always keep a skeptical eye out.
2. Book Far in Advance
The further you book your flight, lodging, and transportation in advance, the more you will save. Booking a flight a few months ahead of time can save you over $100 per ticket, so start looking right away. One of the biggest mistakes you can make is hesitating, as waiting even a few hours could make a significant difference.
If you know you want to go to a certain destination and you see a price that fits your budget, buy it immediately. Once you do, start saving for all of the smaller expenses that come while you’re there. This way, you won’t have to worry about any major bills catching you by surprise.
3. Choose the Right Destination
If one single decision will impact your overall costs the most, it is your destination. For example, you may find a cheap flight to Iceland, but once you’re there, things get expensive. Do your research on the average cost of goods and travel expenses by using your favorite cost of living comparison tool.
Create a shortlist of destinations you’d like to visit and compare them to see which will fit your budget the best. We’re not saying you have to go with the most affordable one on the list, but it will give you an idea of how much each of them costs so you can weigh the pros and cons.
4. Create a Savings Plan
Using the rewards points on your credit cards, saving cash tips from work, or using money from your garage sale. These are just a few clever ways people use to fund their travels, but there are plenty of others. Find what works for you.
If you don’t know how much to save, a good rule of thumb is to pay for the essentials as far in advance as possible (flight, lodging, and transportation) and save at least 50% of that total. Let’s say that you budget really well and pay $1000 for a flight, Airbnb, and rental car in Costa Rica for a week. In that case, save at least $500 for everything else.
Now, you may go over that amount, but that’s okay. $500 will cover most of your meals, tickets to tourist attractions, gas, and more. If you want more room, try to save between 75% and 100% of the cost of essentials. If you book your flights 4 months in advance, you’d have to save $250 a month until your trip to complete that 100%, which isn’t too hard for most people with the right budgeting skills!
Also, some people may have another consideration to keep in mind. If you’re a small business owner, freelancer, or independent contractor, then you won’t’ have paid vacation time. In that case, you will need to save more to make up for lost income while you are gone, unless you intend to work on your trip (which we hope you won’t).
5. Save on Lodging
Now, we mentioned tools like Airbnb, but it’s far from the only option. There are many third-party alternatives, hotel-booking sites, and more to choose from. Again, don’t look at the “cost per night” but rather the overall cost for your full stay.
In some cases, prices may change between days of the week. If a place doesn’t have as much traffic on a Wednesday as it does on a Saturday, they may lower the rate during the week. Keep these things in mind when shopping around.
Also, you may save money by finding a place outside of the city or a short drive away from your destination. If you’re already planning to rent a car, then this won’t be much of a problem.
6. Consider Joining a Travel Rewards Program
If you plan on taking trips every year, you can easily justify it by joining a travel rewards program and using it throughout the year. You can save a lot in the long run, but only if you know what you’re doing.
In the short term, joining a travel rewards program by finding the right credit card could offer a substantial welcome bonus. Depending on the card, you could receive up to $150 to $500 in points, which are usually more valuable when used for travel-related purchases. You’d be hard-pressed to find a better “win-win” than boosting your credit score and saving on travel.
7. Find a Place With a Kitchen
When shopping around for lodging, Airbnbs and house shares tend to have one major advantage over hotels, and that’s a kitchen. By cooking two of your meals every day and eating out once, you’ll save a lot of money on food. If you’re spending $10 a meal by eating out three times a day for a week, reducing two of those meals to $2.50 will save you over $100 just on food per person.
Keep in mind that if you’re traveling in Europe, Canada, or the US, you can expect to spend more than $10 per person when eating out. Eating in could save you a lot of money at these destinations!
Also, if you do plan to eat out (especially for more than one meal a day), always look for opportunities to save. If you can coupon or find a cheaper restaurant, you may save a lot of money! Also, if you aren’t ready for a full meal, try stopping at the grocery store and getting a snack!
8. Plan Ahead (and Stick to the Plan)
Think ahead about all of the possible expenses that could arise. What happens if you need more gas than you thought, you want an expensive souvenir, or you’re forced to eat out a few more times than planned? Plan ahead for these things, expect them, and have the money available for them.
Travel is one of the most rewarding experiences for anyone, and it’s okay to use your credit card for some of it, but be careful. The average credit card debt in Canada is over $20,000, and interest rates are climbing, so set a budget and stick to it!
From there, take a look at any tempting expense during your trip and prioritize. Is it worth hurting your budget? If it’s a souvenir or something that can wait, sleep on it and see if it’s still worth it tomorrow!
Hit the Road
Or the skies. Either way, plan the budget vacation of your dreams and make the most out of it. Travel is one of the most rewarding experiences of our lives, but we don’t want to go into debt over such an important experience.
Follow these tips, stay up to date with our latest financial advice, and feel free to contact us with any questions or for help with your financial situation!