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How to Vacation on a Budget



Taking a vacation without going into debt has always been a challenge, but it’s even harder this year. Travel is thankfully nearly fully open worldwide in the wake of the pandemic. But inflation is still driving up vacation costs significantly and flights are at an all-time high. All of that means it’s crucial to take the right steps to protect your finances as you plan a trip. It starts with being smart about your budget.

We talked to finance and travel experts to get their tips to help you set a realistic vacation budget. If you follow their advice, you can get away without going into credit card debt.

Video Transcript

If a post-pandemic trip this summer is a must for you and your family, you’re not alone.

A recent study by ValuePenguin shows that 53 percent of Americans have summer travel plans that they plan to spend over two thousand dollars on…

The troubling fact? Nearly half of those people are willing and ready to go into debt to make their trips happen.

“Americans are addicted to debt, it’s almost a national past-time”

Of the over two thousand people surveyed, fifty-two percent say they’ll rely on credit cards to pay for the trip, something chairman of debt dot com, Howard Dvorkin says is a big mistake.

“And when the credit card bills come in at the end of the month. A good majority of those bills will go unfulfilled or unpaid, and the balances will start to incur interest.”

Dvorkin says these six tips for summer travel ValuePenguin shares can help you save time and money by staying on track with your planned itinerary.

First, research the rules,
Be mindful of capacity limits,
Have backup plans,
Use a travel agent,
Get travel insurance,
And, examine change and cancellation policies.

“People when traveling, they need to go through and do the research that’s necessary to make sure they’re getting the best deals, and there still are some great deals”

Travel debt can be a long-lasting souvenir, but, can be avoided by traveling within your means and making modifications to your trip,

“Basically go through, do some research on the internet. Plan out your trip by day. Make sure the price you’re receiving is a good price, compare prices. And don’t be afraid to go through and try to get discounts when applicable.”
For more news and information subscribe to debt dot com’s YouTube channel and if you need help getting out of debt or have questions visit debt dot com today.”

Assess your household budget and be realistic about how much vacation you can afford

After being cooped up like chickens for two years, people are understandably ready to travel and explore the world again. In fact, Expedia recently revealed bookings jumped 58% in the first quarter of 2022 compared to 2021. [1] But is traveling a good idea if you’re carrying debt?

Travel blogging experts Jennifer and Mark Campbell of Just Chasing Rabbits admit, “It’s a tricky question and it really depends on each person’s individual situation. For someone in extreme debt, any extra expense is probably not a good idea. For those with minimal debt, just stick to a budget and make reasonable choices, and going on vacation should be fine.”

Colleen Lanin, the Travel Mama and founder of agrees, advising that there are easy ways to tailor a trip around your budget.

“A vacation is a very appealing way to celebrate newfound freedom.,” Lanin says. “Therefore, I would suggest sticking to a budget-friendly vacation to appease that desire if you’re in debt. Road trips, camping, and staying with friends and family instead of booking a hotel may be the way to go!”

Kristin Addis, founder of Be My Travel Muse also encourages travelers to consider the type of debt that they have and how much control they have of their debt before they decide to book a trip.

“Credit card debt is very expensive,” Addis explains. “It might be better to pay that off first. But for those with student or home loans, I think as long as those are adequately getting paid on time it’s still important to travel and enjoy your life.”

Take these steps as you consider if you can travel while in debt

1. Assess your debt

Take stock of your debts to see how much you’re currently paying per month and the status of all your debts.

“While getting into debt is not wise, and caution is needed so you don’t restrict yourself further, I still believe bringing joy into your life and creating meaningful memories is the point to it,” Caz Makepeace, co-founder of Y Travel Blog  says. “I recommend making cuts in other areas of your life that don’t provide as much joy and purpose instead. Be conscious of your financial situation and make smart choices that help you balance paying down the debt with also enjoying your life.”

2. Know your limitations

If you’re spending more than 10% of your monthly income just to cover your minimum credit card payments, it may be best to wait.

“Setting up a clear, detailed budget is essential,” says Josh Bender, founder of Travel with Bender. “Even though it’s tempting to travel beyond your means, getting into debt will not help in the long run. Instead, it pays to spend more time in destinations that have a cheaper cost of living. Also consider the month you’re travelling. Being patient will keep more money in your wallet, and you can still have the same amazing experiences.”

3. Set up a vacation savings plan

Review your budget to see how much you can afford to save for vacation.

Find expenses that you can cut back or cut entirely at least temporarily so you have more money to save for your trip.

Assess your total monthly savings or savings per paycheck and then set a date for your trip accordingly. And be realistic, with inflation at its highest level in four decades, this may not be the year you want to go big.

“Inflation has had its effect on airline costs, increasing by roughly 25% in the last year alone.” Says Alex Gillard, founder of Nomad Nature Travel. “People are naturally going to be looking for deals. Instead of going to places they have always wanted to go or perhaps places they have traditionally gone, a lot more people are going to be staying closer to home and making plans based on where the discounts are.”

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Research restrictions and requirements

Once you decide how much vacation you can afford, it’s important to investigate travel restrictions and testing requirements you may encounter. This is especially true for international travel destinations.

Assess costs before you book

Michelle Halpern, founder of Live Like It’s the Weekend, encourages people to take time before booking. “As a traveler, the best thing you can do right now is to plan ahead as much as possible and research your itinerary before you book to make sure you know the true costs associated with your trip.”

With inflation and rising gas prices driving up business costs, it’s no surprise that airline tickets are more expensive right now. Though online spending for flight bookings was up 23% in April 2022 compared to 2019, actual bookings are only up by 5%. This wide gap means consumers continue to pay more for the same amount of service. [2] For 63% of American travelers, the rising gas prices will also impact their travel decisions over the next six months. [3]

“There are a few things to consider as a traveler,” Travel expert and CEO of Florida Panhandle, Brittany Mendez advises. “When planning the vacation, it’s best to weigh out the pros and cons of transportation. It might be easier and less expensive to fly rather than drive with the rising gas prices, but make sure to take into consideration the true cost of luggage, opportunity, car depreciation or rental, and the like.”

Data from the travel app Hopper shows that airfare rose by 40% since the start of 2022. Average roundtrip domestic flights cost $330, which is 7% above 2019 prices. International airfare is no longer cheaper than domestic flights like it was at the height of the pandemic. The average international flight currently matches 2019 prices at $810 for roundtrip tickets. [4]

While your searching for deals make sure you don’t fall victim to travel scams when booking flights, rental cars, or lodging. Be wary of “free trips” that require immediate payment or amazing deals.

Travel experts warn that costs this year will be very different… So, don’t rely on past experiences and estimates. Look for the prices available now and keep these tips in mind:

Location, location, location

No matter what year you’re traveling, it’s important to be mindful of the cultural happenings of whichever country you choose to visit.

“Civil unrest should always be a variable in your calculations. Colombia, for instance, is in the middle of federal elections right now and violence has surged across the country as armed groups attempt to exert political influence in areas they control. It is usually best to avoid election times in countries where violence and political unrest is a fact of life, even at the best of times.”

That said, don’t take every conflict as a sign you need to cancel your travel plans. For instance, while the Ukraine-Russia conflict rages on, it shouldn’t completely nix your European adventures.

Alex Gillard can attest to this firsthand. “I am in Albania and have been here since the beginning of April. There is nothing I have seen to indicate that either tourists or locals feel any threat to their safety or that anyone is planning to cancel a European vacation due to what is currently happening in Ukraine.”

Be aware your airline miles may not get you as far

Kristin Addis also warns travel rewards credit card users that their miles may not be worth what they used to be.

“Unfortunately, I think we will see airline miles becoming less valuable. With so much on spent mileage, it will probably drive-up plane ticket and reward ticket prices,” Addis says. “Hopefully the right balance can be found without too much headache!”

Realize that cheaper isn’t always best when traveling now

While low-cost alternatives can help you take a trip cheaply, you also need to keep the safety of you and your fellow travelers in mind. Even our travel experts admit they’re adjusting their own travel strategies in this new landscape.

“Now I’d much prefer to rent a car and drive myself rather than taking public transportation. I’ll happily upgrade or pay for a seat assignment on a plane to avoid the dreaded middle seat,” Claire Summers of Claire’s Itchy Feet travel blog explains. “There is also no way I’m staying in a 10-bed dorm right now, so my budget for accommodation has also increased. Before, I would look for the cheapest way to travel. Now I’m looking for the safest way to travel, which often costs a bit more.”

People may need to save up and save longer before their trip.

“It’s important to plan, budget and save well ahead of time. Having a careful, structured, but flexible budget will allow you to splurge on the important elements of a vacation, while sparing and saving on less important ones,” explains Nick Mueller, Director of Operations at HawaiianIslands.

Expect car rental costs to be higher

One cost that’s almost certain to be higher is transportation. According to Car and Driver, the average car rental price was up $35 from December 2019 to January 2022.[5] The inventory shortage caused by the pandemic is still affecting prices in 2022.

“Travelers need to be aware of the increase in the cost of car rentals,” explains Corritta Lewis, family travel blogger and co-founder of Itz a Family Thing. “To stockpile cash, rental car companies sold a significant amount of inventory, so now that the travel industry is starting to rebound, there is a shortage of rental cars. A lack of rental cars means increased prices. Many families are canceling vacation plans because car rentals in some areas are over $100 per day.”

To minimize these costs as much as possible, you should book your rental car well in advance and opt for the most economic rental option possible. Also, fill up the vehicle somewhere close to the lot. Paying for gas through a car rental service has always been expensive. It will be even more so this year.

Make sure to check cancellation policies

Another aspect of travel that’s changed because of the pandemic is cancellation policies. Companies are becoming more flexible when it comes to cancellations. However, that flexibility could translate into higher costs for reservations.

“A great many travel providers, including most accommodation providers, now offer very generous free cancellation policies,” says Laurence Norah of Finding the Universe. “However, this has meant that in many cases prices have had to go up to mitigate the potential loss from last-minute cancellations. So, whilst consumers benefit from the peace of mind, there is a cost associated with this convenience that is going to come out of travelers’ pockets.”

Look for low-cost alternatives, but beware of hidden costs

Traditionally, one smart way to cut the cost of a vacation is to take a different type of trip, such as a home swap or a volunteer vacation.

Jessie Festa, travel blogger and founder of Jessie on a Journey, encourages that those low-cost alternatives are still available. “There are also platforms that make it possible to travel on an extreme budget,” she says, “for instance, housesitting platforms where you get free accommodation in exchange for watching someone’s home and possibly their pets.”

At the same time, be aware that these low-cost alternatives may have new added costs.

Caz Makepeace of Y Travel Blog warns, “Many spend too much due to a lack of research and many hidden costs, such as high cleaning fees on Airbnb. Sometimes it’s more cost-effective to stay in a hotel because of this. Do the research.”

Don’t get burned by resort fees

Many hotels and resorts don’t list “destination” or “urban” fees prominently on their website, according to the BBB. Instead, you must click through several pages to find the total price.

To avoid paying resort fees, the best option is to avoid booking hotels or resorts that charge such fees. Another way to avoid resort fees is to charge enough on a hotel-brand credit card to earn “elite” or another status that waives resort fees on hotel and resort stays.

Slam the door on hospitality tax

Hidden city taxes can ratchet up the total cost on a hotel or resort. “Some cities charge hotel or hospitality taxes, which aren’t included in the hotel’s nightly rate,” says the BBB. “Check the total amount you’ll be charged before paying to see if you are charged any extra taxes.

Get on board with shuttle service fees

Just because a hotel or resort advertises “shuttle service to the airport” doesn’t mean you’re getting a free ride. Call the hotel and make sure the shuttle service is free before booking. If there’s a fee for the shuttle service, compare the price with what you’d pay for Uber or Lyft.

You may be better off booking a rideshare service to and from the airport.

Shift away from parking fees

It makes sense to assume that when a hotel or resort advertises parking on the premises, you can park your car for free. However, that’s not always the case.

“Not all hotels offer free parking, so ensure this is included before you book, especially in high-traffic areas with limited parking space,” advises the BBB.

Look closely at hotel amenities

When you see photos on a hotel’s website of guests lounging on cabana-covered beach chairs, you may assume that’s just one of many luxury amenities included in the rate. That assumption that all amenities are included can cost you more than you planned for your travel budget, however.

Some hotels charge fees that boost the total price of the stay for amenities like a continental breakfast, poolside towels, in-room snacks, and early check-in, according to the BBB.

Make sure to opt-in for insurance when booking

As you’re assessing prices and starting to book your trip, there’s one feature that you may have ignored in the past that our experts say is now essential.

“More people will be spending money on travel insurance,” explains Craig Makepeace of the Y Travel Blog, “which is something we’ve always recommended you do despite the pandemic. So, while for some it won’t be a new travel cost, for many it will now become one.”

Even experts say that while they may have opted out of insurance in the past, it’s a necessity in our current travel environment.

“There were times I might have skipped travel insurance pre-2020,” admits Claire Summers of Claire’s Itchy Feet. “But those times are over. If you can’t afford insurance, then you probably can’t afford to travel!”

Be strategic about spending on your vacation to avoid going into debt

With your budget set and bookings made with insurance, the only thing left to do is enjoy your trip. Still, once you arrive at your destination, it’s still important to pay attention to your spending. You want to take steps to avoid added expenses and extra fees, which can stack up quickly if you’re not careful.

“It can be really easy to spend money on a trip,” states Noah, “things like attraction, entry, meals, and souvenirs can all add up quickly. I’d recommend setting up a specific budget for activities and dining, and make it point to stick to it.”

Consider your debit and credit cards carefully

Claire Summers says one cost that can catch consumers by surprise when they travel internationally is with bank fees.

“Make sure that whoever you bank with isn’t going to charge you for using your card or withdrawing cash while traveling,” she says. “I love that my bank actually refunds all of these charges to me, so I’m free to spend my money while abroad without getting crazy charges.”

Jessie Festa of Jessie on a Journey advises that travelers can also get a bank card or credit card that caters to a globetrotting lifestyle.

“If you’re not sure where to start, Charles Schwab is one great bank option that is popular with travelers, as they offer unlimited ATM fee rebates worldwide and no foreign transaction fees,” Festa explains. “I also love my Chase Sapphire Reserve credit card as there are no foreign transaction fees as well as other traveler perks.”

Never pay for Wi-Fi

Jennifer and Mark Campbell of Just Chasing Rabbits also advise travelers to avoid paying for extras at your accommodations that you can get for free elsewhere.

“One thing that we will not pay for unless we absolutely HAVE to is Wi-fi,” Campbell says. “So many Wi-fi hotspots are available that we can usually make do, plus many apps allow users to download data and information for offline use. When booking a hotel, we always look for free Wi-fi included.”

Ignore the mini-bar

Travel Mama Colleen Lanin also says to avoid costly up-charges in your room.

“Don’t ever pay the high prices for minibar snacks and drinks!” she advises. “Instead, stop by a local grocery or convenience store to stock up on a few goodies to have on hand.  Sometimes hotels even offer a little shop in the lobby where you can buy bottled waters, wine, chips, and more for a fraction of the price you’d pay for raiding that high-priced in-room mini-fridge.”

Skip the souvenirs

Corritta Lewis of Itz a Family Thing says there is one final place where many travelers make the mistake of overspending—the gift shop.

“You should never purchase souvenirs on vacation. They are overpriced and quite honestly useless,” Lewis explains. “Vacation souvenirs end up in the junk drawer in a box in the basement, garage, or attic. Spend that money on a new experience or trying a new dish. Be honest with yourself, how often are you going to wear that I heart Vegas t-shirt outside of the house?”

Don’t wait to pay off your balances

When you get home from your trip, there is one final thing you can do to ensure you aren’t paying for your vacation for the rest year: set a plan to pay off any credit card debt.

“Credit cards can be convenient for booking flights, hotels, and car rentals, and they can give you some great rewards,” explains Howard Dvorkin, CPA, and chairman of “So, there’s nothing wrong with using a credit card to pay for all or part of your trip. But you better have a plan to pay it off quickly. Otherwise, any rewards you earn will be completely offset by those high interest rates that reward credit cards carry.”

Dvorkin advises that you should review your balances and charges as soon as possible after your trip. Then review your household budget and see how much you can afford to pay each month to pay those balances down quickly. Ideally, you want to start with the balance that has the highest interest rate first, since it accrues more interest charges, leading to higher costs.

“And if you see that you overspent and you won’t be able to pay off your balances quickly, don’t wait to get help,” Dvorkin continues. “Start researching options that can help you pay off your debt faster, like debt consolidation or credit counseling. Or call at (844) 325-5698 and we can help you find the best solution for your needs and budget.”

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