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Traveling Smart: Budgeting for Holiday Trips

Traveling Smart: Budgeting for Holiday Trips

Jenius Bank Team11/28/2023 • Updated 11/21/2024
Woman booking holiday travel on her laptop.
Holiday travel gets expensive. Planning ahead may save you money and reduce stress.Traveling for the holidays can be exciting when you’re spending time with those you love and creating new memories. But during the holidays, travel is an added cost over and above the other fun: gifts, entertaining, 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 and potentially 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 budget.

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 to more easily track your progress.
  • Thoughtful expenditures for travel convenience 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 normally set you back around $1,600.1 But during the holidays, brace yourself for even higher prices. In the three weeks preceding holidays like Thanksgiving and Christmas, flight prices tend to rise each day. So, if you delay booking your trip until the last minute, it could cost you significantly.2Planning ahead may not only save money but could also help you secure flights and accommodations that match your needs. By building a holiday budget and tucking away funds now, you may enjoy your trip even more knowing you’re not relying on high-interest credit cards to foot the bill.

How to Create a Holiday Travel Budget Plan

So now that you’re on board with having a holiday budget, here are some steps to help make it happen.
  • 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 spending cap that reflects what you’re able to comfortably afford without resorting to financial acrobatics. 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 things you could do to travel smarter and perhaps even happier.
  • Upgrade 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 breakfast may cost more upfront but could save you the hassle of going out (and potentially spending more).
  • 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: Generally, the earlier you book your travel plans, like lodging, car rentals, and airfare, the more you 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 may be important for your holiday trip to help cover unexpected issues. 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, depending on your situation.
The goal is to arrive in the merriest mood possible… and it helps to have a little extra money in your pocket!

Final Thoughts

Building a holiday travel budget could help you avoid at least so of the holiday stress. 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 all year long.
Money ManagementLifestyle