How To Effectively Budget for a Vacation
Vacations give us the chance to take a break from the everyday routine to relax, discover new places and enjoy adventures. For many, though, the expense can lead to financial worries. But by planning ahead, researching how to save and minding their spending, vacationers can successfully cut costs and enjoy a getaway on a budget.
What is a realistic budget for a vacation?
Determining a realistic vacation budget depends on where you’re going, how you’re getting there, how many people you’re traveling with, the level of accommodations you choose, how long you’re staying and what you plan to do.
When setting your overall budget, keep average U.S. vacation costs in mind. According to BudgetYourTrip.com, as of mid-March 2025, the average cost of a vacation in the United States stood at:
- $324 per person, per day
- $2,268 per person for a week
- $4,536 for a couple for a week
A widely accepted rule of thumb is to limit your yearly vacation spending to 5 to 10% of your annual net income.
How to plan a vacation on a budget
To plan a vacation on a budget — whether for a family getaway, a trip with friends or a solo adventure — start by setting a realistic total spending limit. Your vacation budget should balance your expectations with an amount you can comfortably afford to spend.
Follow these steps to set basic spending limits for your next getaway:
Determine fixed costs
Research your airfare, hotels, rental car, and other fixed expenses. (If you’re flexible, this may even include your vacation destination.) By doing this homework early, you can get a good idea of your primary vacation costs to set a baseline for your budget.
Planning ahead and booking early can help you realize big vacation savings, because pricing for vacation necessities — including airfare, lodging and car rentals — tends to increase as the date approaches, while availability decreases.
Approximate variable expenses
Activities and attractions will influence your vacation budget, and their costs can vary widely. Identify the top attractions and activities you’d like to visit during your getaway, and then research the pricing for each as you plan your itinerary. In addition to guiding your spending, this information can help you plan a more exciting trip — and keep you from missing out on any must-sees in the area you’re visiting.
Smart vacation planners should also research area restaurants and their pricing. While food prices can vary depending on how many meals you choose to eat out and what types of restaurants you pick, a good rule of thumb is to plan on $55 to $60 per person, per day during your vacation — adjusted accordingly based on your specific dining plans.
Factor in unexpected costs, and build in some flexibility
Unexpected expenses often arise on vacations. While away, you’re likely to discover things to do and attractions to visit that you didn’t research. It’s a good idea to pad your vacation budget for these, and to have an emergency fund available so you’re prepared for unanticipated expenses.
Prioritize your experiences
Once you’ve identified all the possible costs for your vacation, it’s time to allot the funds you’ve budgeted. Review your research and prioritize what you want to include. By examining the costs of each item, you can make informed choices about the accommodations, flights, and transportation you can afford. Then, adjust your discretionary spending to create an itinerary within your vacation budget.
Establishing a vacation budget ahead of time allows you to set a savings goal and start putting money aside for your trip. You may even want to create a savings account specifically for your vacation, which can make it easier to earmark money for your getaway — and even generate additional funds via accrued interest.
Ways to save on vacation expenses
To cut the costs of your next vacation — both before the getaway begins and while it’s underway — incorporate these money-saving tips to stretch your budget:
Consider offseason travel
Prices for everything from airfare and lodging to activities, car rentals and meals tend to be higher during a destination’s peak season. (And the crowds are bigger, too.) Travel during the offseason to potentially benefit from lower prices and smaller crowds.
Stay outside the city center
Hotel rooms are typically much more expensive in a city’s center or close to its top attractions. To stretch your lodging dollar, consider staying in a nearby suburb or away from the center of the action, then traveling to and from your chosen attractions and activities via rental car or public transport.
Pack your own meals
Dining prices at airports and tourist attractions are notoriously high. But most airports allow food and drink in your checked luggage and carry-on bag, per TSA guidelines. Packing your own meals, snacks and drinks can help you stay hydrated and full without overspending. Many popular tourist attractions provide free picnic tables and outdoor dining facilities so you and your party can eat there, while avoiding the expense of destination dining.
… or grab groceries
Dining out for every vacation meal can quickly drain a travel budget. Instead, pick up groceries at local stores and farmers markets for a fraction of the cost. By choosing a hotel room with a refrigerator and a microwave — or even better, a kitchenette — you can prepare meals yourself and save money. (You’ll likely want to splurge on dining out on occasion during your getaway, but preparing some meals can cut your expenses considerably.)
Dine away from tourist destinations
Anywhere sizable crowds of tourists gather, there are likely to be plenty of options for dining nearby — but they’ll typically carry a price tag above the norm. Escape the hustle and bustle for your meals, and you’re likely to save big. And after researching, you might discover some of the area’s more authentic culinary treasures off the beaten path.
Find free and inexpensive adventures
Vacation destinations’ free-of-charge and budget-friendly activities are often easy to find. Popular, fun and inexpensive (or even free) activities and attractions include parks, historic sites, walking tours, free museums and community events. At The Southern Bank, we pride ourselves on offering friendly, personalized service to all of our customers — and that includes providing guidance when you have questions about any of our banking services. To learn more about our Personal Banking services ranging from Mortgages, Personal Checking and Personal Loans to Savings & Money Market, Certificates of Deposit (CDs) and more, check out the Personal Banking page on our website, or visit one of our local branches for friendly, in-person service with a smile.