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Traveling Smart: Budgeting for Holiday Trips

Traveling Smart: Budgeting for Holiday Trips

Jenius Bank Team11/28/2023 • Updated 4/4/2024
Woman booking holiday travel on her laptop.

Holiday travel gets expensive. Planning ahead may save you money and reduce stress.

Traveling for the holidays is exciting because you get to spend time with those you love and create new memories. But during the holidays, you’re not just spending money on travel. You’re also buying gifts for your family and friends, you may be cooking and entertaining and don’t forget holiday cards, wrapping paper and decorations. It all adds up quickly!

That’s why it’s important to plan ahead and create a solid budget to help give you the peace of mind you deserve during the holiday season, which may help you avoid a big bill when the season is over.

If you’re someone who plans to do some holiday travel this year, here’s how you could go about creating a functional holiday travel budget that could help you keep your finances in good shape during the holiday season.

Key Takeaways

  • Building a holiday budget may help alleviate stress and help you keep your finances in good shape.

  • You may want to open a dedicated savings account for your planned holiday budget so you easily track your progress.

  • Thoughtful splurges that make the trip easier could reduce your stress, provided you’re not spending more than you budgeted for in total.

The Importance of Planning and Budgeting for Holiday Travel

Weeklong getaways in the United States could set you back around $1,600, but holiday trips?¹ Brace yourself for even higher prices; in the three weeks preceding year-end holidays like Thanksgiving and Christmas, flight prices tend to rise each day, meaning waiting a few days to book could cost you significantly.²

By building a holiday budget and tucking away funds now, you could enjoy your trip without relying on credit cards with high interest to foot the bill. Planning ahead may not only save money but could also help you secure flights and accommodations that match your budget and preferences.

Better yet, when you plan travel in advance, you may jettison your holiday stress, meaning you have more time to focus on making memories with your loved ones, rather than fretting over your spending, scouring for last minute reservations, or battling post-holiday debt.

How to Create a Holiday Travel Budget Plan

Now that you understand the benefits of budgeting for holiday travel, it’s time to figure out how to create one yourself. Here are some steps for creating a budget that works for your upcoming holiday plans.

  • Assess Total Travel Costs: Consider how much you need to spend on accommodation. If you’re staying with friends or relatives, you’re in luck and may not have to spend a cent. If you’re staying in a hotel or a short-term rental, consider how much that stay costs and start shopping around to get an idea of rates. Also consider how much you could spend on meals, activities, and transportation to your destination.³

  • Set Realistic Limits: Get real about your holiday spending and set a budget that reflects what you’re able to comfortably afford without resorting to financial acrobatics. Splurge mindfully by figuring out a realistic spending cap and choosing items or features that make your trip easier. It’s like giving yourself a present – financial peace of mind.

  • Factor in Extras: Life happens, especially during the holidays. Factor in a little extra cushion for those unplanned moments, whether it’s a spontaneous day trip or the irresistible allure of a fancy dinner. A little wiggle room may turn potential financial hiccups into ho-ho-hoorays.

  • Create a Dedicated Savings Account: Putting your holiday travel savings in your regular

    savings account makes it tough to keep track of which money is earmarked for travel and which you’re free to use for other purposes. Instead, consider setting up a dedicated savings account for your holiday funds. Look for an account that offers competitive rates so your savings could grow faster, meaning you may have more spending money for your trip!

Tips for Smooth Holiday Travel

Even with a clear budget, the actual process of traveling may be stressful. Here are a few easy things you could do to make your travels easier.

  • Splurge Mindfully: Spending a little extra on some travel expenses may make the trip more enjoyable. For example, if you have a long flight, your seats may make the airtime more comfortable (especially if you’re traveling with little ones). Staying in a slightly nicer hotel with free hot breakfast may cost more upfront, but could save you money on dining costs.

  • Look for Deals: When you’re booking hotel rooms or flights, check for deals that could help you lock in a lower price. In some instances, booking directly through the hotel or airline may get you a lower rate and free up cash for other fun things.⁴

  • Use Miles and Points: If you have a credit card that collects points or are part of a company’s reward system, you may be able to pay for some (or all) of your trip using these rewards. Each program has their own rules and requirements for using rewards, so check the terms for more information.

  • Book Early: The sooner you make your travel plans, like lodging, car rentals, and airfare, the more money you stand to save. Even better, booking early may give you access to more options and let you choose the ones that work for your needs rather than picking from what’s left over.⁵

  • Insure Your Trip:Travel insurance is important for holiday trips as it provides coverage for unexpected events. Research different providers, understand coverage options, and consider which policy fits with your travel plans. It is optional but may provide valuable protection and peace of mind.

By following these tips, your holiday travel experience may be smoother and more enjoyable.

Final Thoughts

Building a holiday travel budget should help you avoid some of the stress that tends to come with the holidays. But planning for holiday travel is just one way to keep your budget looking great throughout the year. Check out these tips for building a strong budget that could help you cover your expenses and continue to build your savings.

Money ManagementLifestyle