Budgeting for a vacation

This is a post that I did as a guest writer for the website Get Rich Slowly.  They posted this on their website in July.  I made a few changes and now I am re-posting it on my site, and I hope it will have some information that will be helpful. 

 

 

"One certainty when you travel is the moment you arrive in a foreign country, the American dollar will fall like a stone."  Erma Bombeck

Me in Paris

Budgeting for a trip is important to me. I spend a lot of time before I go, figuring out what the trip is going to cost me. I don't believe in credit card debt. There is some debt that is acceptable, like for a house or car, but to me, a vacation would not be enjoyable if it wasn't paid for before I went. So I budget, and save and plan.

Before I go on any trip I figure out how much that trip will cost me. I start with the airfare. Then, depending on the type of trip, I start looking at other expenses. For instance, if it is a cruise or a tour, I pretty much know what the cost will be for that package, but even then there will be expenses to plan for. If I am going to my destination independently, a lot of my expenses will be estimated.

 

Our cruise ship in port in Patmos, Grece

On a cruise or tour, once you have budgeted for air and the price of the package, you have to look at optional excursions and how much those will cost. The cruise or tour company will have a list of those excursions and the cost, so those are pretty easy to budget for. On a cruise your food will be provided, but on a tour usually only some of your meals are included. Usually all breakfasts are and most dinners are included, but you will definitely have lunches to pay for, and some dinners, as well as snacks and drinks. And I also allow for shopping and miscellaneous expenses – it's surprising how there are always those surprising things that pop up.

Cadiz, Spain
Oldest City in Europe

If going to any destination independently, then after the airfare cost I start looking at hotels. Those I quite often book from home before I go, so I know what the cost of those will be. I tend to budget $100 per day per person for food. That is usually higher than what I actually spend, but I'd rather budget higher than low. And the food is not just meals, but drinks and snacks. Those chocolates, gelatos, pastries, etc. And when traveling I don't want to have to worry if I can afford that expensive meal at a great restaurant. I also budget for entrance fees to museums, amusement parks, whatever might come up that will cost to get into. Transportation is another thing that goes on my list, whether it is the train or a rental car.

We took a trip to Scotland and Ireland in May of this year.  We were to be gone for 3 weeks.  We would be visiting our friends, so for 7 of the nights we would be staying at their house, and eating at least our dinners with them at their home.  So the budget for hotels and food is for 15 days instead of the whole 3 weeks.  I did know that we would have some lunches out during those 7 days with them, but since my food budget is on the high side, I figured I was covered. Also, once we hit the road we would be in their car, and we would be splitting the cost of gas, so if that seems low, it is because we were only covering half.   Here is the budget I made for that trip.

Me at Urquhart Castle
On Loch Ness in Scotland

Airfare   $1500 per person           $3000

Hotels (15days)  100 per night      1500

Food (15 days)  1500 per person   3000

Car - gas     350                         350

Gas      200                                 200

Entrance fees    200                     200

Misc.     200                                200

Shopping   300                             300
Travel Insurance                          250

Total                                       $9000
 
The airfare may seem high, but it was the actual cost.  I bought a coach ticket and then used my air miles and an extra $500 per person to upgrade to first class on the way to Scotland, so that we would arrive rested.

I also have to figure in the cost of a house/dog sitter, not something that everyone would have to consider when planning a trip, that was another $600.

George in Prague

When we travel we carry only a small amount of cash, debit cards and 2 credit cards. I carry a debit card and one credit card and my husband carries his debit card and the other credit card, just in case a wallet or purse is stolen. I don't always get currency from the country I'm going to in advance. Sometimes I do, but I don't purchase very much here, the rate of exchange is better once you get to your destination.

Having dinner in Athens

I usually go to an ATM when I arrive at the airport and get several hundred dollars cash, which I split between us. My debit card (which is with a credit union) will charge a small fee but it is still better then purchasing foreign money here, there are fees for that also. And while traveling I pay for hotels and restaurants using my debit card. They ring it up like a Visa transaction, but it comes directly out of my checking account, which is where I put the money I have budgeted. There is no fee when using it as credit, and the rate of exchange is the best I can get using it that way. I enter it in my checkbook register in the foreign amount and then deduct what I think it will convert to – but I always figure it a little high, so that when I get home I will have more money in my account then the amount shows. I only use my cash for small purchases. That way I don't have to go to the ATM often, since the ATM does have some fees attached to it.

Dubrovnik, Croatia

Sometimes it does get complicated. Since the Euro, it has been a little easier, because so many countries use the Euro. Recently we took a trip that started in Austria (Euro) went through Slovenia (also on the Euro), then Croatia (they have their own currency), then we were in Hungary (also their own currency) and then Turkey (again their own currency). It got complicated. I didn't mind having some Euro's left over, we can always use them on future trips. But the Croatian, Hungarian and Turkish money would have no value after this trip, so I had to be careful not to get too much of it, but I wanted to make sure I had enough that I wouldn't have to go draw out more (because of the fees). The last day in each country I was diligently using up the cash. I figured it was best to get rid of it. We may go back to those countries someday, but by then they will most likely be on the Euro too.

A word on credit and debit cards in foreign countries. Before you go check with your bank, credit union or credit card company. Find out what their fees are. Let them know you are taking your card out of the country. And make sure you write down the information on those cards and keep that information in a separate location. In other words, the card number and a phone number, in case you have to report the card as stolen. And always take several cards with you, with your travel partner carrying a different card from you. That way you will have a backup card in case one is stolen.

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Me in London

We were in London a few years ago and I went to the ATM to get cash, and my debit card did not work. I tried at several different ATM's and no success. I then got on the internet and signed on to my account to check if there was a problem. Everything looked fine, I had plenty of money. But still the ATM kept rejecting me. I needed the cash, so I got a cash advance using a Visa card. When I got home a few days later, I asked at my credit union why I couldn't get a withdrawal. They told me that they had a computer problem and that for 24 hours the ATM's in foreign locations could not connect to check balances, therefore, they would not work. In all the years we have been traveling with that debit card, it only happened once, and that was over 5 years ago. But always plan for the unexpected, and have a backup, because things happen.

Also, be aware that Visa and Mastercard are the most widely accepted cards, and probably American Express the least accepted. I love my American Express, because I get a cash rebate on it every year, but I do find that there are many places that do not accept it. So I use it when I can, and carry my Continental Mastercard (I get miles with it) for when I can't.

When I wrote this for the other blog, which was on money management, I was criticized for spending $9000 for a trip.  Most of the people thought that was excessive, they would never spend that much on a trip, they are all budgeting and trying to save money, which is fine.  However, the point is, that whatever trip you take, you not go into debt to take it.  I know that people can travel to Europe for much less, and I have talked about some of the ways to do that in this blog in the past.  Certainly backpacking and staying in hostels will save you a lot of money.  But not everyone wants to go that way on every trip.  So you have to decide what is right for you, and then make your plans and your budget, and make it work for you. 

I hope this will help with planning your trips.  I would love to answer any questions about using your cards in another country, or planning your budget.