6 Ways to Budget for a Dream Vacation

Fortunately, you can take several steps to plan for a vacation that won’t break the bank. “The best way to save for a vacation without breaking your budget is to plan ahead,” said David Fowler, a certified financial planner in Fort Myers, FL. 

Here are six steps to help you plan for your dream trip. If you find that you’ll need a little extra money, we have suggestions for that too.

Table of contents

1. Figure out what your vacation will cost
2. Consider off-peak travel
3. Calculate how long it will take to save
4. Open a separate account for vacation savings
5. Earn extra money for your vacation fund
6. Explore a personal loan

1. Figure out what your vacation will cost

Roundtrip transportation costs

Getting to and from your destination can be a major part of your vacation expenses. The good news is that you have options that may help your budget in different ways.

Airfare: If you’re planning to fly, search for flights to your destination on specific dates or, if your dates are flexible, by season. You can set price alerts online to notify you when costs come down or when great deals pop up. And don’t forget about fees. If you’re planning a ski or golf trip that requires gear, you may need to check multiple bags. Buying a seat with more legroom or even just choosing your seat on the plane may cost extra. Make sure to read all the fine print and tally up how much everything related to the flight will cost.

Driving: Depending on how far away your destination is, driving could save you the cost of a plane ticket, taxi to the airport, and parking. Plus, road trips can be good fun. Estimate the cost of gas, or of charging if you have an electric vehicle. Gas prices change frequently, so check the average for the area you plan to travel through. For an EV, you might estimate $10–$30 for each charge on your road trip.¹ Also factor in the cost of parking at hotels and any maintenance your car may need before hitting the road.

Transportation at your destination

Rental cars: If you do fly, you may need to rent a car at your destination. Look to bundle flights and rental cars if you know you will need both. The location you visit may make a big difference. The average weekly cost of a rental at the Miami airport is $377, for example, while at Chicago O’Hare airport it’s nearly $625.² Also consider where you will park your rental car. Does your hotel or short-term rental have free parking? How much would a garage or street parking cost? You will want to plan for those costs in addition to the cost of the rental and gas.

Public transportation & rideshares: Whether you travel by plane or car, you may still need to take a train, taxi, or ride-hailing service. You can check train fares online. If you’ll be cabbing around a city at busy times, plan for peak pricing.

Non-transportation costs

Lodging & food: As you research your stay, you’ll want to price out the cost of a hotel or short-term rental. This is another time to check for fees. Some hotels charge “resort fees” or fees for in-room amenities like bottled water. If you’re renting a house or apartment, check those as well for things like cleaning fees or a non-refundable deposit.

One way to lower your planned budget is to look for a hotel room or rental with a kitchen so that you can prepare some of your meals. You’ll be able to store snacks and pack lunches for your day trips, which may save you a lot. If your vacation includes visiting the outdoors, you can look into camping to reduce your budget.One way to save is to reserve a room or rental with a kitchen so you can cook some of your own meals. You can store snacks and pack lunches for your day trips, which can save a lot compared to buying those extras. If your vacation includes visiting the outdoors, you can look into camping for another low-cost option.

Entertainment & extras: Of course, choosing what to do on your trip is part of any vacation planning. Are there sporting events or other tickets to buy? Are you hoping to visit local attractions that have entrance fees? Factor each of these into your budget. You might consider buying tickets in advance and looking into city passes for additional discounts.

Passports & fees: If you are traveling to a foreign country, make sure you have a passport and that it's not set to expire within six months of your travel dates. Passport fees may run over $100. You’ll also need local currency. Research how to get the best currency exchange rates and consider possible transaction fees if you plan to take out cash.

Pet care: If you’re not bringing your pets with you on your adventure, remember to factor in the cost of caring for them while you are away.

2. Consider off-peak travel

If the cost of your vacation is starting to look too expensive, perhaps you can consider traveling off-season.

Many destinations are just as enjoyable at various times of year. They might also be less crowded if you choose the right months. Traveling at off-peak times, or even just changing your flights to midweek, might make a big difference with costs.

Don’t be afraid to be creative in both timing and destination. There may be somewhere off the beaten path you can visit. Maybe someplace closer to home, so you can save on transportation costs. There are lots of ways to bring costs down if you keep an open mind.

3. Calculate how long it will take to save

If you’ve given yourself time before your departure, you can start saving now for the eventual trip. Consider using a savings method like the  50-30-20 rule. This means you divide your income into three parts: 50% of earnings and pay for your “needs,” 30% for “wants,” and 20% goes to long-term savings. Your vacation counts as part of your wants

Once you know how much money you can put aside every month, you can see how long it will take to reach your budget goal. If you estimate your vacation will cost $1,800 and you can save $200 each month, you have nine months to plan as you put aside what you need.

“The important thing is that you have a system, you stick to it, and make sure you take those vacations,” said Fowler, who specializes in helping people plan financially for outdoor adventures. “Life is too short not to see, do, and live the experiences you dream about.” 

4. Open a separate account for vacation savings

A good method for focusing on your savings is to use a separate account only for vacations. You might open a new savings or checking account dedicated to your trip. Set up automatic deposits for a portion of your paycheck to make the savings process easier.

Consider a  high-yield savings account that pays you interest on your money. This may be a great way to further increase your funds while you build up your savings. By having this separate account, you’ll be less tempted to spend it on daily expenses.

5. Earn extra money for your vacation fund

It never hurts to bring in a little extra income, especially if you are planning for a vacation. You might think about holding a garage sale or yard sale. You can clean out your clutter and make some extra money at the same time.

You might also pick up a side hustle to grow your income and use the extra money for your vacation fund. If raise or an end-of-year bonus at work, commit to saving that for your trip and you’ll be even closer to your goal.

6. Explore a personal loan

These five steps should get you closer to your dream vacation. If you need a little extra help, or don’t want to use a higher-interest rate credit card for that once-in-a-lifetime trip, consider a personal loan

At Discover® Personal Loans, you can borrow between $2,500 and $40,000 and pick the repayment term from options offered to fit your budget . You will have one set regular monthly payment, a fixed interest rate, and no fees of any kind  as long as you pay on time. 87% of surveyed customers told us their Discover personal loan was simpler than their other financial options .*

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The information provided herein is for informational purposes only and is not intended to be construed as professional advice. Nothing contained in this article shall give rise to, or be construed to give rise to, any obligation or liability whatsoever on the part of Discover, a division of Capital One, N.A., (Discover) or its affliates.

*ABOUT SURVEY

All figures are from an online customer survey conducted in September 2024. A total of 736 Discover personal loan customers were interviewed about their most recent Discover personal loan with 546 of them using the funds to consolidate debt. All results @ a 95% confidence level. Respondents opened their personal loan between January and July 2024 for the purpose of consolidating debt. Agree includes respondents who ‘Somewhat Agree’ and ‘Strongly Agree’.