Creating a financial roadmap that covers expenses before, during and after your trip is key to success
Take a minute to scroll through your Instagram feed or search the top stories on Snapchat. Chances are gorgeous images and videos related to travel caught your eye. That’s because vacationing is a key priority for many female millennials.
Some women venture off to explore the world and experience new cities and cultures, while others visit loved ones. Regardless of the reason for your travels, it’s critical to put a plan in place to cover all trip expenses.
Don’t know where to start? Work with a financial representative to ensure you have a macro-financial plan in place first. This step will help you identify how much you should realistically spend on an annual trip budget if you have your eye on more than one destination. Then create a payment plan to cover costs before, during and after your travels. To get you started, follow this handy, six-step guide to budget for your wanderlust.
Name your price
Budget-friendly vacations can be glamorous and full of adventure when planned correctly. Start by setting your trip budget. It should include the funds you’ve allocated to cover your vacation – lodging, transportation, food and fun – and money set aside in case of an emergency. If you’re traveling with friends, be honest and realistic about your budget.
Give yourself a discretionary per diem
To ensure you remain on budget throughout the entirety of your trip, set aside a dollar amount per day that you’re willing to spend. For example, if your total discretionary budget is $1,400 for a week-long vacation set aside $200 to spend per day. While you don’t have to stick to it fast and true every day, this daily estimate gives you a good idea of how to allocate your funds to stay within budget throughout your trip.
Realize that adventure sometimes has its pitfalls
Next, set aside money in a trip emergency fund. While this fund is not intended to be used, it should be readily available and easily accessed. For instance, if you’re traveling internationally, your emergency fund can be used to cover added costs if the unforeseeable happens or you miscalculate an exchange rate.
Map out your trip
With a per diem in place, create an itinerary for your vacation that fits within your budget. Do your best to pay for all or most of the daily activities before departure. This will help you stay on budget and ensure you’re able to check off items on your trip bucket list. During the planning process, look for great deals on travel, lodging, and fun activities on airline websites and discount sites like Travelocity or Groupon.
As you’re mapping out your trip, it’s important to also give yourself (and your friends) a reality check. Don’t let glamorous Instagram photos dictate all that you do. In my experience, the best, most cost-efficient trips mix luxe and authenticity. This enables you to live like a celebrity and a local. Experiencing a city’s culture is often inexpensive, and in some cases free.
Check in on your finances
Throughout your vacation, cover all discretionary costs on one credit card. This helps you keep a real-time eye on how much you’re spending. It can also help protect you if your wallet is lost or stolen.
Make it a priority to check your account daily to monitor your finances. When doing so, add up the total amount of money you spent that day to see if you’ve exceeded your per diem. If you did, don’t fret. Adjust your itinerary for the next day to include free or budget-friendly activities like a relaxing beach day, a walk through a new part of town or a tour of a historic landmark.
Tackle post-travel debt
In a perfect world, you’ll return from your vacation with an evenly balanced budget. Congratulations! Re-allocate your emergency fund to pay for your next big adventure.
However, many women fly home with financial baggage. After you’ve unpacked your suitcase(s) and posted photos from your trip on social media, put a plan in place to tackle your post-travel debt. Start by reallocating money in your trip emergency fund to cover the travel expenses. Then, if needed, work with a financial planner to add a line item in your current financial plan to cover the rest of the debt(s).
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Now that you’re equipped with the information and tools you need to properly budget for your wanderlust, start planning (and funding) your next adventure!