How to Plan a Vacation on a Budget

Co-authored by Greg Guiteras

Last Updated: September 27, 2023 Approved

Vacations are a great way to break out of a rut, an opportunity to have a good time and experience something new; however, they’re generally expensive. Whether you’re trying to eke out a trip on a small budget or planning something luxurious, you’re always going to want to get the most you can with your money. A lot goes into a vacation, so planning can be complex. That also means there are a plethora of ways to save.

Part 1

Part 1 of 5:

Picking a Location

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Consider places off the beaten path. Places that attract a lot of tourists are generally expensive and often not that authentic. Think about countries that aren’t as popular to visit. Alternatively, find a town near a major destination. Prices will generally be lower, but with a short commute you can still have access to popular tourist destinations.^{[1]
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- Some budget vacations include Mexico, Canada, Slovenia, Hungary, Peru, Puerto Rico, Panama, and the Dominican Republic.^{[2]
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Most tourist destinations are more popular—and expensive—during certain times of the year. In general, cold weather climates like Europe are more expensive during the summer, whereas warm weather climates, like Hawaii, are more expensive in the winter. Prices tend to also go up around the holiday season.^{[3]
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Vacations are often cheapest when housing, transportation, and daily expenses are bundled together. Look for vacation packages offered by websites like Groupon and Travelzoo. This can also streamline the planning process and make your budget much easier to calculate.^{[4]
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The easiest way to save is to refrain from taking a big trip. Stay close enough that you can drive to shave the price of airfare off your trip. Sometimes you might be able to spare the expense of a hotel as well. Go camping, visit the beach, or tour a historical site.

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Part 2

Part 2 of 5:

Finding Flights

Websites like Expedia, Priceline, Hotwire, and Travelocity allow you to book your flights, hotels, and car rentals together for less money. Bundling all of these purchases together can save a lot of money.
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Search early, often, and widely. The price of flights vary considerably depending upon the provider and how well tickets are selling. The only way to make sure that you get the best deal is to not only look around at as many places as possible, but also to check often. Use websites that allow you to estimate if the price of tickets will go up or down.
- The worst time to buy a ticket is within two weeks of the trip. On average, the best time is around 3 and a half months prior to the trip. However, the market is volatile and the price changes of individual trips vary considerably from these averages.^{[5]
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- Skyscanner is an online application that predicts how airfares are likely to change over time. This can give you a better sense for when would be a good time to buy.^{[6]
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Connections take time, but it usually cuts the cost of a ticket considerable. Furthermore, airlines generally charge the same for a one hour layover as a two day layover. Turn your layover into a trip of its own and you can get a multi-destination trip a bargain bin price.^{[7]
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Try to fly in and out of the same airport. Roundtrip tickets are much cheaper than one-way tickets. If you can fly in and out of the same airport to save money. You should price the expense of returning to the airport to see which option is most affordable.^{[8]
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- Generally rental car agencies will also charge more if you return your car at a different airport.
Search around for flights around the same time. The cost of flights can vary considerably depending upon the day of the week. Also, services like Priceline can save you as much as 50% on flight, if you are able to travel during certain preset dates.^{[9]
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Part 3

Part 3 of 5:

Finding Housing

Websites like Expedia, Priceline, Hotwire, and Travelocity allow you to book your flights, hotels, and car rentals together for less money. Bundling all of these purchases together can save a lot of money.
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Find smaller hotels. Independent hotels are generally cheaper than larger corporate chains, which are often designed to cater to business clients. Independent hotels can also be more quaint and authentic.
- Sometimes you can negotiate for lower rates with small hotels by offering to stay for a certain period of time or paying in cash. For this you will need to contact the hotel directly instead of going through an online service.^{[10]
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Consider hostels. Hostels are not luxurious, but they will allow you to see a new locations for very little money. Hostels are often organized in dorms, wherein you will share a room with several strangers. However, most have a handful of private rooms which will also be cheap.
- Hostels can be a great place to meet other young people who are traveling and interesting to socializing.
- Hostelworld.com is the best resource for searching through hostel options.^{[11]
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Rent an apartment. There are a variety of internet websites that allow you to search through the properties of locals who are interested in renting out their apartments for a period of time. Not only are these generally cheaper than a hotel, the proprietors will often make a point to be friendly and recommend local sites.
- These websites will feature reviews of previous customers, who can tell you a lot about the condition of the property and the friendliness of the proprietor.
- Examples include Airbnb, VRBO, and HomeAway.^{[12]
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Do a housing swap. If you live in a prime location, you ought to be able to do a home exchange. These allow you to swap your house with someone else for free. If you are comfortable letting someone else stay in your home, this option can both be affordable and allow you to stay by yourself in a an upscale property.
- The leading site for this sort of exchange is homeexchange.com.^{[13]
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World Wide Opportunities on Organic Farms is an organization that connects volunteers with organize farms that are looking for workers. In return for working on the farm you will get free housing on the farm. This could be onerous on a short-trip, but WWOOFing can be a great way to stay in a new location for an extended period.^{[14]
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Go couch surfing. Ask yourself if you know any friends or family who are due a visit and live some place you are interested in seeing. This is a great way to get free housing, socialize, and get a tour from a person familiar with the location.
- It is customary to give some sort of gift anyone you stay with.
- Couch surfing can also save on daily living expenses, because your host likely has groceries and transportation.
- Couchsurfing.com connects you with strangers who might be interested in housing you. Members are reviewed to establish that they are good guests and hosts. If you use this service to stay with someone, it expected that you will reciprocate by allowing others to stay with you.^{[15]
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Part 4

Part 4 of 5:

Saving on Daily Expenses

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Avoid touristy restaurants hotel breakfasts. By dining in your hotel, you will typically sacrifice quality and price for convenience. Ask locals what their favorite establishments are. Save leftovers from previous meals or do some light shopping so that you have snacks while in town.^{[16]
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- Restaurants advertising that they speak English are typically designed for tourists and will cost more.^{[17]
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2
Research local food and drink. In Paris, you might find that the wine is cheaper than the Coca Cola. Embrace the local food and you’re bound to save money—and probably enjoy yourself more too. Before travelling figure out what the local and seasonal staples are.^{[18]
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- Many places also have seasonal diets. Living like the locals and eating food when it is in season, will generally save you money.
When you do dine out, do so for breakfast or lunch. The lunch menu at a standard sit-down restaurant tends to have cheaper prices than the dinner menu.
You might need to contact people back home during your trip, but using your cell phone will probably cost more than you’re willing to pay. Most destinations sell international phone cards that will allow you to dial out for cheap.^{[19]
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Research source} Even better, use a free online service like Skype.^{[20]
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Many places abroad—especially affordable ones—don’t take cards. Even when they do, you will typically be saddled with some sort of foreign exchange fee.^{[21]
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Use the ATM, not the currency exchange. When procuring local currency, avoid the currency exchanges at airports—they typically have bad exchange rates. Generally the ATM at the local bank will be better.^{[22]
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- Call your bank ahead of time to warn that you will be out of town—so if you use your card it won’t be shut down—and to ask about exchange rates with local banks.
- ATMs have better exchange rates, but typically charge for each transaction. That means it’s smarter to take out a lot of money at one time.^{[23]
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Pack light, especially if you plan on flying. The majority of airlines charge you to check baggage. The fees may not seem like a big deal, but they can build up and really eat into a tight budget. The fewer bags you pack, the less it will cost.
- Consider leaving some empty space in your bag so that you don’t need to buy additional luggage to bring souvenirs back.
- Alternatively pack old clothes that you no longer care for. You can dispose of them at the end of the trip, opening up additional space in your bags.^{[24]
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Before you leave home, check online for coupons and discounts being offered by national chain restaurants, gas stations, grocery stores, and manufacturers. Many coupons work nationally, not just locally, especially when you find them online.
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Research local transportation. In many places, a rental car will not help you get around very well. Look into local public transportation. Whenever possible, refrain from using taxis; they are almost always the most expensive option.
- When calculating expenses, remember a rental car will mean that you need to pay for hidden fees, gas—which can be expensive abroad—as well as tolls and parking.^{[25]
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- European countries often have multiday rail passes that allow you to travel further for much cheaper.
- If you are making a long trip during your vacation, consider an overnight train. These will usually be cheaper and you can save on hotel expenses.^{[26]
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Part 5

Part 5 of 5:

Budgeting for Your Vacation

Determine the maximum amount of money you can afford to spend on your vacation. Some experts recommend that you allot 8 percent of your income to recreation, but this is bound to vary depending upon your circumstances.^{[27]
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Flights, train fare, and housing expenses are not likely to change very much. Begin by adding up these fixed expenses and subtracting them from the budget you devised. The remainder will be your daily living expenses.^{[28]
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Calculate your daily budget. After subtracting fixed expenses you will have money allotted to your daily expenses. To determine if this is a feasible sum to live off of, research local restaurants and the currency exchange rate. Consider whether there is anything that you want to do on your trip that will incur additional expenses: shopping, seeing shows, going on guided tours.
- Traveling is full of unanticipated expenses. Experts recommend that you multiply your expected daily expenses by 10% to 15% account for additional costs.^{[29]
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- It can be hard to keep track of how much your spending in a foreign currency. To ensure that you don’t exceeded budgeted daily spending, stick to cash and divided your cash up into separate envelopes for each day of your trip.^{[30]
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Expert Q&A

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Question

How can I save money on a big group trip?

Greg Guiteras
Travel Specialist
Greg Guiteras is the CEO of Lorraine Travel, LLC, one of the largest privately-owned travel management companies in Florida founded in 1948. With over 34 years of experience, Greg's specialties are in corporate travel management, sales and marketing, contract negotiations, strategic partnerships, and luxury hotel sales. Greg holds a BS in Marketing from Florida State University. Greg has also created WhataHotel!, a website offering exclusive perks on hotel bookings, and CabinMate, an app that matches single cruise travelers with potential cabin matches "in the same boat" to avoid traveling solo on a cruise.

Greg Guiteras

Travel Specialist

Expert Answer

Market the trip to your group as early and often as possible. The earlier you have a concrete grip on how many people you need to book for, the cheaper everything will be. If you have people signing up or trying to join the trip at the last minute, the booking costs for airfare and lodging are going to go up quite a bit.

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Question

I don't get what the group coordinator prices are? I had a hotel mention this and I don't really get it.

Greg Guiteras
Travel Specialist
Greg Guiteras is the CEO of Lorraine Travel, LLC, one of the largest privately-owned travel management companies in Florida founded in 1948. With over 34 years of experience, Greg's specialties are in corporate travel management, sales and marketing, contract negotiations, strategic partnerships, and luxury hotel sales. Greg holds a BS in Marketing from Florida State University. Greg has also created WhataHotel!, a website offering exclusive perks on hotel bookings, and CabinMate, an app that matches single cruise travelers with potential cabin matches "in the same boat" to avoid traveling solo on a cruise.

Greg Guiteras

Travel Specialist

Expert Answer

If you're travelling with a big group, you're going to be given a specific price as the group coordinator based on the number of seats on a plane or rooms in a hotel you're going to need. If you meet this threshold, your prices should be cheaper. if you do not meet that minimum threshold, the prices could change.

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