How to Plan a Vacation On a Budget

When you’re budgeting for vacation, it’s important to do your research on how much travel typically costs. This can help you set a realistic vacation budget and determine how much to allocate toward expenses like transportation and lodging. 

The average total cost of a vacation is about $1,990 per person, per week in the United States, or around $3,980 per week for two people. International travel is typically more expensive: around $2,300 per person on average, or around $4,600 for two people. However, costs vary depending on factors like group size, travel dates, destination, and method of transit. For a detailed breakdown of how to budget for a vacation, check out our guide to the average cost of vacationing.

When determining how much to budget for a vacation, the “50-30-20” budgeting rule can give you a helpful guideline. This rule recommends putting 50% of your income toward essentials (like food and shelter), 30% toward non-essential wants (like hobbies or travel), and 20% toward your savings. 

Another common strategy is to limit your vacation budget to between 5% and 10% of your net income, or the income that remains after taxes. For example, if your net income is $55,000, you could allocate anywhere from $2,750 (5%) to $5,500 (10%) toward your next vacation. Be sure to consider your other expenses, such as upcoming house or vehicle repairs, when setting a budget that’s appropriate for you.

1. Create a budget for your vacation

The first step is to create a vacation budget. You can use either digital tools or a simple pen and paper. This is important for two reasons: a budget helps you avoid overspending, while also ensuring you have enough funds to cover essentials and “must-see” trip highlights. Determine how much you can afford to spend comfortably, research average costs associated with different travel destinations, and explore buy now, pay later (BNPL) services like Zip. Zip lets you break up travel expenses and pay them back over time, giving you more flexibility to manage your vacation budget.

2. Plan ahead of time

Planning your trip ahead of time allows you to take advantage of lower costs and early bird deals while avoiding last-minute price spikes — especially if you plan to travel around any major holidays. The further in advance you purchase tickets, book rooms, or reserve tour spaces, the less you’ll generally have to pay for them. BNPL services like Zip can give you more control over your vacation budget, giving you the flexibility to snag hot deals and low prices before they vanish – all while paying in convenient installments.

3. Research affordable vacation destinations

One strategy for planning a vacation on a budget is to compare costs for different destinations. The price tag can vary dramatically depending on factors like: 

• How far away from home you plan to travel

• Your method of transportation

• Currency exchange rates

• The average cost of dining and activities

When setting your vacation budget, be sure to take advantage of tools like Expedia, Tripadvisor, and Booking.com that give you helpful tools to research affordable vacation destinations and compare costs of various travel routes.

4. Be flexible with dates

When planning your budget for a trip,  try to be as flexible with your travel dates as possible. You can typically score better prices on airfare, hotels, and other tickets or accommodations by traveling during the off season instead of the peak tourist season.

5. Consider alternative accommodation and transportation options

Hotel rooms and airfare are some of the biggest vacation expenses, costing travelers an average of $141 per night and over $350 per flight. You can stretch your vacation budget by taking advantage of lower-cost alternatives, such as buses, hostels, vacation rentals, and public transportation. Compared to an average of roughly $368 per round trip for airfare, specially-priced bus and train tickets can start below $20 depending on the route and carrier.

6. Incorporate affordable activities

Expensive events and activities, like concerts by major musicians, can eat through your vacation budget fast. Try to limit the number of high-cost events you attend, look for free or budget-friendly alternatives, and save splurges for the activities you’re most interested in. Wherever your vacation takes you, you’re likely to find free museums, parks, markets, performances, and other local venues or events you can explore at low or no cost.

7. Take advantage of deals

You can help slash your vacation budget by researching — and taking advantage of — deals, sales, or promotions. Some helpful resources for finding great vacation deals include budget travel sites and price comparison tools – such as Expedia, Priceline, and Tripadvisor. Google Flights also provides free tools for comparing airfare on various routes and airlines. Additionally, your credit card may offer travel perks like points or miles.

8. Plan your meals strategically

Research shows that food and drink typically account for somewhere between 16% and 27% of a vacation’s total price tag. Dining out makes up most of this cost, with the average person spending $108 on restaurant meals compared to just $24 on self-prepared meals over the course of a 4-day U.S. trip. Whether you’re traveling domestically or abroad, you can lower your vacation costs by preparing more of your own food. Plan meals strategically by bringing your own snacks, cooking at your vacation rental, or choosing a hotel that offers complimentary meals.

9. Be wary of hidden fees

When your goal is to keep your vacation budget-friendly, it’s important to be aware of hidden costs you might encounter, like less-than-obvious parking fees or charges for early checkout from your hotel. Here are a few other examples of common service charges and fees to look out for when traveling: 

• Amenity charges 

• Cancellation fees

• Credit card processing fees  

• Gratuities 

• Late fees 

• Resort fees 

• Roaming or international phone charges

• Room service fees 

• Wifi fees 

While it isn’t always possible to avoid these types of fees, knowing how much they cost in advance can prevent unpleasant surprises later. The more you research potential fees, the more accurately you’ll be able to plan your vacation budget.

10. Start saving in advance

The earlier you start saving for vacation, the more flexibility you’ll have – along with less stress about reaching your vacation budget goals! Consider creating a savings account specifically for your vacation fund, then setting up automatic monthly or biweekly transfers from your main checking account. 

You can also use buy now, pay later (BNPL) services that let you purchase today and pay it off in scheduled installments – giving you more available cash-on-hand to put toward your vacation. BNPL services like Zip let you make large purchases into smaller, bi-weekly payments¹.

Zip is a free app that lets you split your travel expenses into 4 easy payments¹, putting you in control of your next vacation budget. Use Zip to pay for hotels and airfare, earn cashback rewards, and score exclusive deals from popular travel brands. Zip is accepted by thousands of businesses across the U.S. and worldwide, including Vrbo, Delta, American Airlines, Amtrak, Hilton, Priceline, Uber, and more.