Who isn’t pining for a vacation right now? Yet alongside that dream is a reality—for most people, budget plays a big role in planning a trip. Stressing about expenses during vacation can defeat the purpose of travel as an escape from the grind. With a bit of planning and some tips and tricks, you can create a solid budget to take the spending anxiety out of the equation. Then, all that will remain is the stress-free—and affordable—vacation itself.
How much of your budget should you devote to travel?
We wish there were a magic formula, but only you can answer this. When saving for a trip, the financial formula will always depend on what works for your income and what you want to prioritize.
“There is not necessarily a set amount or percentage that you should use for travel, said Christopher Miller, a financial adviser with Krueger Financial Group. “You’ll have to make a decision on what to use your discretionary spending for. It may be buying the newest electronics, going out to eat, traveling, or saving up for a big purchase such as a home improvement.”
Miller recommends using the 70/20/10 breakdown. This means 70 percent of your income should go toward household expenses, including debt. Twenty percent should be put into savings, including retirement. That leaves 10 percent of your income for wants, including travel, or for additional savings.
The first step to deciding how much to devote to travel is pinpointing the cost of your ideal trip. Price out hotels, airfare, activities, and food and get a rough estimate for the cost of the entire trip. Once you know how much to save, you can figure out how long it will take you to do so.
“We recommend keeping track of all monthly income and expenses. By doing this, you will have a good idea of how much travel you can afford,” said Miller. “For any large purchase [like travel], saving a little each month to reach your goal is very helpful. If the trip total will be $2,400, for example, saving $200 a month will meet your goal in 12 months.”
Having a guilt-free vacation means knowing you won’t go into debt because of your getaway. Saving before a trip is the best way to ensure that. There is nothing wrong with putting trip expenses on a credit card—especially to earn points for future travel—provided you have the money to pay it off without accruing interest.
Do you prefer to splurge on a hotel or opt for a more affordable property like C.O.Q Hôtel Paris so that you can spend more on activities and food?
Courtesy of C.O.Q. Hôtel
What are the travel expenses to consider?
After you have a rough idea of the trip’s total cost, you can break the pricing down into itemized travel expenses. This is where you can get creative and start thinking about your dream itinerary.
Unless you find a crazy deal on a ticket, airfare and hotels are typically the two biggest expenses in your travel budget. Will you splurge on accommodations, or do you consider them solely a place to sleep? Do you have credit card points to redeem for hotel upgrades or discounted airline tickets? (If you’re new to points and miles, we’ll briefly touch on that soon.)
Once the flight and accommodations are locked in, you’ll know what you have left over for further travel (rental cars, trains, buses, etc.), food, and entertainment. It’s important to budget for the miscellaneous costs that can really add up—think visas, hiking shoes, even vaccines.
Everyone’s travel priorities are different. Foodies, for example, are going to want a bigger budget for dining out, while others may prefer to cook to save money for activities, shopping, or spa treatments (in which case, opt for a vacation rental or residential-style hotel whose rooms have kitchens).
Afar contributing editor Sophie Friedman says she’s happy to cook a few meals on vacation; it’s healthier and saves not only money but sometimes time (think breakfast at your accommodations while your friends get ready). Savings from not eating out as much while traveling have gone toward experiences like a hot air balloon ride in Kenya’s Masai Mara and a PADI diving certification course in Tulum.
Journalist Lauren Matison has traveled alone, with her husband, and now with two children. “We typically plan to do maybe one splurgy outing, say a river cruise on the Seine, then do a few preselected activities, be it a museum, a guided tour, or a cooking class,” she said. “With kids, we are more mindful of how we spend our money since a jet-lagged kid could alter plans, forcing us to cancel an activity we may have already booked tickets for.”
How to track your budget while traveling
Caroline Lupini has been a tour leader for the past six years and is the managing editor for Forbes Advisor’s credit cards and rewards travel content. In the past 10 years, she has visited more than 100 countries while living on the road full-time. “I have my budget for accommodation, flights, food (restaurants and groceries), drinks, activities, and other miscellaneous charges that come up,” she said. “I log all of my expenses in an app called TravelSpend, which makes it easy to keep track of spending in multiple currencies. Then, every month, I log my totals into a spreadsheet.”
Other useful free apps for tracking your spending on the road—especially when traveling with someone else—include Tripcoin, Tricount, and Splitwise.
How to use points and miles to save money on travel
Using credit card points and airline miles is a great way to stretch your travel budget and to get some cool perks along the way, like free breakfast and room or airplane seat upgrades. But if you feel overwhelmed by the complexities and nuances of individual points and miles program, you are not alone. Even loosely understanding the ins and outs of points and miles can help stretch your trip budget. Because travel often includes costly purchases such as airfares and hotels, using a rewards credit card is an opportunity to earn points and miles for future trips—in other words, using your current trip to help pay for your next adventure.
“I got into learning about points and miles when I was in college and wanted to travel more but had very little cash,” Lupini said. “Now I often use my points and miles to upgrade my travel experience—think business class on long-haul flights and the occasional cushy hotel room instead of booking an Airbnb or a more affordable hotel.”
You can use points and miles to upgrade to United’s Polaris business-class seats.
Courtesy of United Airlines
There are many resources for getting into the points game. She recommends reading forums and blogs and searching topics like “traveling on a budget” on Instagram and TikTok to get their tips and tricks.
“My biggest recommendation,” she said, “is to look for someone, or multiple people, whose travel style is similar to what you’re going for, then follow them on social media to get started. I also recommend starting with one flexible points currency [credit card] like Chase Ultimate Rewards. You’ll have a lot more options with the flexible point currencies than with a specific type of airline mile.” Capital One’s Venture Cards are another good option. With a “flexible point currency” credit card, points or miles accrued from spending can be redeemed for flights, hotels, and car rentals. This is especially useful if, for example, you frequently fly with low-cost carriers and you’d rather redeem points for hotels and car rentals than flights.
Related: These Are the Airline Loyalty Programs That Are Actually Worth It, According to Experts
Set aside funds for emergency or surprise expenses
Sometimes the unexpected comes up during a vacation: a canceled or delayed flight, a lost hotel reservation, a dramatic change in weather, a medical emergency, or luggage gone missing. Surprise expenses are a part of life, and they certainly can be a part of a vacation. Having a backup plan or an emergency fund can help lessen the financial blow.
“Keeping an emergency savings account that is not factored into your travel expenses will help cover these kinds of events,” said Miller. “A person should always have an emergency account whether traveling or not.”
Travel insurance is one of the best ways to protect yourself in the event of emergencies or surprises. Often, travel insurance includes emergency medical insurance, as well as an amount for canceled or delayed trips, lost luggage, and more.
The key details to remember when budgeting for travel: avoid overspending, make sure you’re protected, and have enough money saved so that you can relax and have fun. A vacation is a time to treat yourself—within your means.
Miller added, “Not overextending yourself with the amount you spend on travel is important. Paying for a vacation for the next 12 months [after the trip] can hurt.”
This article was originally published in 2024 and most recently updated on February 19, 2025, with current information.
