How many times have you gone on vacation only to come home to remember you need to start paying for all the fun you had? The relaxed feelings and memorable times you captured on vacation quickly fade into financial stress and regret. Many people believe this cycle is inevitable and accept it year after year. You can take some simple steps to prevent this and ensure you have memorable vacations and note regrettable vacations. We will share with you some of the phases we go through when planning a vacation. Following these phases have enabled us to have the time of our lives on vacation.
Once you decide where you are going on vacation you start the vacation dream phase. Begin to have fun by dreaming and researching what you want to do while there. This is where things get exciting. Take the time to look up your options, seek out places online and ask your friends and family what they enjoyed doing the last time they went there. As you’re doing this research keep notes on the cost associated with each item you plan to do. Events do not have to include expensive tours or amusement parks either.
Some of our best times are sitting around a table playing cards, walking along the beach or hiking.
Remember think big in the dream phase; you can always remove or scale back items as you move into the planning or budgeting phase.
In the vacation planning phase you want to get down to business. Layout a schedule for each day. You don’t have to get down to extreme details but you need to have enough details to know you are covering all your expenses and know you can fit in the activities you plan to do. During the vacation planning phase we typically layout what meals we need to pay for and what events we are and are going to do. This plan is essentially your itinerary for your vacation. The planning phase is extremely important leading into the vacation budgeting phase.
In the vacation budgeting phase you will do a bottoms up estimate based on the itinerary you came up with in planning phase. Tish and I use our vacation planner spreadsheet for this. We begin to populate the items from the planning phase into our vacation planner budget spreadsheet. Attention to detail is important during the vacation budgeting phase. Not only should you include the cost of excursions, amusement parks, hotels and transportation you also need to plan out the cost of meals, souvenirs, and etc. Tish and I will typically lay out the cost of each meal for each day. After your bottoms up estimate is complete you should create a 5-10% contingency fund. We generally add up all our variable expenses from the estimate and set aside an additional 10% for unexpected items. Lets face it, all the planning in world isn’t going to catch everything. You need to be prepared for the unexpected with cash so it doesn’t become an “emergency”. To complete the budgeting phase you need to compare your total estimate to your vacation budget. If you have exceeded your budget you might need to scale back or save more money to allow you do everything you want to do.
Lastly you are in the VACATION phase. This is where you go on vacation with a plan and CASH. You will be amazed how much more relaxed you will be on vacation when you have a plan and you have the money to pay for the plan. The beauty of this approach is you don’t have to stress out about what to do, when to do it and how you are going to pay for it while you are on vacation. You did all of it upfront so you can truly relax and have fun while on vacation.
Tish and I get excited every time one of our clients come back from vacation after following the phases above. Every client raves about how much fun they had and how relaxing their vacation was. 8 out of 10 people come back with a little extra money or was able to splurge near the end of the trip and do something unexpected with the contingency fund.
I know this process is not normal and is kinda weird but trust us weird is good. Don’t be like your neighbors and co-workers. Do a little dreaming, planning and budgeting ahead of your vacation. You will find yourself creating memorable vacations and not regretting your vacation when you get home.