Affordable Family Vacations: Tips to Make It Happen

Travel experts answer common questions about how you can afford a fun, memorable trip.

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What I can afford to spend?

What I can afford to spend?
The old rule of thumb says your annual vacation should cost about a week’s salary, but the price depends on your fixed expenses (housing, transportation, etc.) and lifestyle choices. The most common budgeting mistake is underestimating expenses. As you research a trip’s cost, remember to include not just airfare and hotels but also meals, cabs, souvenirs, tips, and a cushion for those great—or awful—OMG moments. Financial expert Grant Cardone suggests setting aside an extra 25 percent. Decide when you want to go, and set up a savings schedule. If you are a retiree on a fixed income, pencil in special vacations on a calendar as part of a long term plan that flags the years in which you’ll need extra travel money, suggests Mackey McNeill, CPA and author of The Intersection of Joy and Money.

Should I put my trip on a credit card if I'm short on cash?

Should I put my trip on a credit card if I'm short on cash?Spencer Platt/Getty Images
No! Charging travel expenses that you can’t immediately pay back isn’t the way to go. “You end up paying much more than the cost of the trip,” warns McNeill. “When you factor in double-digit interest rates and the months—or years—it may take you to pay off the loan, you can end up spending 50 to 100 percent more.” That also goes for other kinds of borrowing. Don’t use an excuse like “We deserve it” to take out a home-equity loan. Cardone offers a simple guide: “If you’re too ashamed to ask Mom and Dad for travel money, don’t ask a bank or a credit card company.”

Should I set up a special savings account?

Should I set up a special savings account?Keith Brofsky/Thinkstock
Yes. First, determine how much you can afford to save. Then have money automatically deducted from your paycheck or checking account and tuck it away in an account that you forget about until you need it. “It won’t earn much interest, but it’s more effective than stuffing bills in a cookie jar,” says McNeill.

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What about buy now, pay later plans?

What about buy now, pay later plans?
Prepaid travel plans are on the rise. The big difference between a layaway plan and a savings account is that you make regular payments to a tour operator or financial-services company prior to your trip. It’s vital to choose a reliable layaway operator such as Sears. Searsvacations.com lets you make reservations with major hotel chains, cruise lines, and airlines. In many cases, Sears offers discounts. Plus, it has a best price guarantee and does not charge a fee for paying in installments. Make sure you know when payments are due and if there are late fees. Other reputable plans to consider are Gate 1 Travel or elayaway.com.

What if I never have the cash for my fantasy getaway?

What if I never have the cash for my fantasy getaway?
Don’t despair. You may be able to secure lodgings for next to nothing by swapping digs with someone who lives in your dream destination. For about $10 a month, you can list your abode on homeexchange.com. The more detailed the description of your home (include photos and house rules), the more likely you are to attract a swapper. Similar sites are digsville.com and homelink.org.

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