Complete cost breakdown

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Budgeting travel costs is something that slows down many potential travelers, but here’s your guide on how to do it in 2022.

Rita Brodfuehrer was about 20 years old, recently fired, loved New Zealand and had a credit card in her pocket. It was a perfect financial storm. Here is a brief recapitulation of the story for which she wrote about it The Forbes “Money Fails” series.: her boyfriend interrupted things when Brodfuehrer was traveling in New Zealand. The country’s fantastic beaches and rich beer tempted her to extend her vacation. However, she had no cash to pay and her destination was expensive. So she turned everything into her emergency credit card. She imagined that payments would be easy when she returned home, but they weren’t. Housing and work problems meant that she could only pay interest each month. Soon, her $ 10,000 balance was in the red.


Emergency travel credit card
Olya Kobruseva via Pexels

Related: New Zealand is expensive: How to discover it on a low budget

Brodfuehrer spent years paying for his kiwi adventure. It does not regret this, as this experience has contributed to who it is today. Still, she says people shouldn’t follow suit. He recommends planning your travel budget and hiding emergency credit cards. Read on to learn more about how to create and adhere to a vacation budget.

Step One: Save

Experts say there are two ways to plan a vacation with a specific budget: 1) choose a destination based on the amount of money available, or 2) save with respect to a specific destination. Here are some pros and cons.


Save on travel
From Maitree Rimthong via Pexels

Save on vacation to any destination

People who like to travel regularly prefer this method. It consists in deducting a piece of money from each payout. Some sources recommend 10% and others up to 40%. It depends on the amount of pay, the amount of other expenses people have in their daily lives, and their love of travel.

Experts also recommend setting up travel savings. Expenditure will not be spoiled and the funds will be used for other expenses. People can ask their bank to automatically transfer a certain amount to their account each month. Then they should forget that money exists until it is time to start planning their escape. Holidaymakers will be amazed at how much has accumulated in their accounts when the time comes to travel. Finally, they can buy a holiday that costs about the same amount as they saved.


Lack of motivation is the most significant barrier to saving in this way. Because people are not thinking about a specific destination, they may be reluctant to put money aside or be tempted to spend it on something else.

related: 10 tips for traveling in the US with a (tight) budget

Saving for a dream vacation

The second way travelers save on vacation is to choose a destination, find out how much the trip costs there, and save until they have enough money to travel.

Setting a specific goal in terms of both amount and destination means that it is easy to gain motivation. Travelers will know how much they have saved and how much they still need. They may even feel inspired to give up spending to put more money into their goal.


However, this method of saving also has a disadvantage. Travelers can focus so much on their destination that they want to go without being sparing enough. Then the credit cards will come out and they will get into debt. When people save without thinking about a particular destination, they will not feel disappointed if they do not raise enough money to get there.

How much will my vacation cost?

No matter how people decide to save money on travel, at some point they will have to estimate how much their planned trip will cost. That is, they will know whether they have saved enough or not.

People need to consider the following expenses:

  • Preparation for the trip – passport, visa, insurance, vaccination
  • Transport – money for petrol, tickets, taxis, public transport at the destination, parking fees
  • Accommodation – hotels, campings, AirBnB
  • Food – food, restaurants, snacks
  • Entertainment – admission to museums and parks, trips, concert tickets or cinema
  • Souvenirs
  • Contingency fund – about ten percent of the budget


It doesn’t matter if travelers write it down, use an expense calculation application, or fill out a Google.doc template (such as this from Vertex 42) with their estimated expenditure. It is important to think about this and have a realistic idea of ​​how much the holiday will cost.

Travel budget table
Screenshot of the Vertex website 42

The key to obtaining an estimate that is close to reality is a thorough survey of each area. Adding 10% to the total – this is a contingency fund – is the last step in finding out how much the trip will cost. If you have a little extra money on vacation, it will be more relaxing and fun. Travelers will not have to worry about every penny they spend, and if they have the opportunity they have once in a lifetime, they will have the money they need to do so.

Overdue on vacation

A 2019 study by Credit Karma found that about half of the millennium and Gen Z got into debt due to summer vacation. Of that, 18% owed somewhere between $ 1,000 and $ 5,000. It is too much. Of those who did not go into debt, 38% said it was because they had prepared a budget in advance.

Traveling undoubtedly gives people a feeling of freshness. New sites and experiences bring joy and miracles. Debt yourself to feel these sensations, a cloud will fall over them. Instead of feeling completely relaxed on the beach, sunbathers may have gnawing fears in their backs as they pay off their credit cards when they return home. On the other hand, they may return from vacation completely relaxed, but then they have to face the harsh financial reality. Either way, the hassle is not worth it and the best way to avoid it is by budget.

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