When it comes to life, you’re constantly thinking about balancing living in the present with planning for the future. The opportunity for a dream vacation might not come around very often, and when it does, you want to take advantage of your time off without setting yourself back in your retirement goals.
Today, the average cost of a vacation is close to $2,000 per person. These costs can increase quickly if you’re looking to travel internationally and/or stay in luxury accommodations. To help keep your costs in check and avoid mortgaging your future for a vacation today, consider these tips to help you plan your dream vacation.
Start with a Budget
Before you start thinking about travel destinations and attractions, sit down and determine what you’re comfortable spending on your vacation. A budget is the perfect guide to help dictate your travel plans while ensuring you don’t get carried away.
Once your budget is set, you can then start to research the costs of traveling to various destinations, including airfare, lodging, food, excursions, and other expenses. If you want to get more detailed with your budget, you can break down what you are willing to spend for each type of travel expense, which can help you figure out the best time and place to travel. Don’t forget to account for additional costs like travel insurance, transportation within your destination, and souvenirs. Being thorough in your budget will help prevent surprise expenses during your trip.
Consider Cost-Effective Ways to Travel
There are many ways to keep costs low while still enjoying your trip. Here are several ways to reduce your trip expenses without sacrificing your vacation:
- Utilize rewards: Credit card points, travel miles, and other rewards programs may allow you to travel for a reduced price or even for free. Or, you may be able to upgrade your flight or hotel room for a more luxurious trip without spending extra money.
- Look into budget destinations: While Paris, Rome, and other well-known tourist destinations sound ideal, there are plenty of places around the world where you can get more bang for your buck and still have an amazing experience. The islands and beaches in Southeast Asia are known for being inexpensive and luxurious, while South America offers rainforests and wildlife that’s second to none and can work on any budget.
- Travel during off-peak times: Avoid holiday travel. Traveling around Thanksgiving, Christmas, or other peak times can get pricey quickly. Instead, consider mid-week travel during off-season months. This can help significantly reduce the costs of airfare and lodging.
- Consider alternative accommodations: Instead of traditional hotels, you could stay at hostels, short-term rental properties, or boutique guesthouses. These options are often much cheaper than luxury hotels while still offering comfort and convenience.
- Talk to those that have travelled to the same location: You can learn a lot from those who have already been to the place you’re traveling, or from travel agents who know the location well. There may be “must sees” or areas that you can easily skip and save the dollars for other activities.
Stay on Track with Retirement Savings
Even if you’re looking to travel for an extended time, it’s best to leave your retirement savings alone. Once you start dipping into your future savings for a trip today, you risk changing your retirement timeline and future goals. Make sure to plan a trip that you can afford without using your savings earmarked for the future.
At the same time, as you’re planning a dream vacation, don’t forget to continue contributing to your retirement savings. This is a time where you might get lost in the short-term details of your trip, but it’s still just as important to keep your eye on the future and ensure that you stay on track toward your retirement goals.
If you’re using a financial planner, it might be a good idea to check in with them to make sure that your vacation plans fit within your overall financial strategy. They can help you understand how your vacation fits into your broader financial picture and give you peace of mind that you’re not sacrificing your future for your present enjoyment.
If you are already retired, just know that travel expenses are likely to be a part of your budget that needs to be thought through each year. Will it be a “normal” year, or perhaps is this a year when a major trip is going to take place. Make sure you are planning from a cash flow standpoint for the cost of these vacations, and setting aside the cash now since it is a known expense with a short timeframe before the money is needed.
If You Can’t Enjoy Yourself, Reconsider Your Decision
At the end of the day, a vacation is meant to be enjoyed. If you are still stressing about your vacation plans and costs, it could be a sign that you aren’t ready for an extravagant holiday. Or, it could mean that you simply need to rethink the best vacation plan that not only will be meaningful and enjoyable, but will allow you to relax knowing that you haven’t mortgaged your future.
It’s all about balance. A dream vacation doesn’t need to be the most expensive trip you can imagine—it just needs to be a fulfilling experience that lets you take time for yourself without derailing your financial future. With thoughtful planning and a budget that aligns with both your current lifestyle and your retirement goals, you can enjoy the best of both worlds: a wonderful vacation and a secure financial future. If you’re unsure how to make this balance work, reach out to our team today—we’ll help you plan for both a dream getaway and a worry-free retirement.