Vacation Finance: Choosing a Travel Destination on a Budget

by Michelle · 21 comments

vacation on a budget

At the end of the month, my boyfriend Aaron and I are taking a vacation that is sure to be special for a couple of reasons. Aaron has not been on a vacation since 1998, and neither of us has been on a vacation as an independent adult, which means that we will get to make all kinds of decisions about where to go, what to do, and how much to spend, for the very first time.

Even though we’re excited that this is our first real vacation and that we have new found autonomy over our travel decisions, we’re also a little concerned. We hope that in our excitement we won’t overspend and break all of our usual frugal habits, and we also hope that as vacation newbies we’ll make choices that won’t break the bank but will still make our vacation a trip to remember.

The first choice that we need to make is definitely the biggest: location. The location we choose will have major impact on how much (or little) we spend on this trip.

We decided to start with a short list of locations and then narrow it down. Our choices are:

  • Michigan. Close enough to our home base, Chicago, that we can cruise right over in a rental car and enjoy a week of exploring sand dunes, reading on the beach, and watching sunsets over Lake Michigan. These relaxing, low-cost activities could make for a trip that is both peaceful and inexpensive.
  • California. Neither of us has been west of the Rockies, so any destination in the Golden State would be a brand-new and hopefully special experience. A trip here would definitely be pricier than a stay in Michigan, but our friend Ellen lives in San Francisco and has offered lodging plus her seasoned, local advice.
  • New York. NYC has been on Aaron’s travel wish list for a while. Since I’ve only spent one short weekend there, I can imagine us having no difficulty filling a whole week with trips to Central Park, the Museum of Modern Art, the U.N., etc. Flights, hotels, and a week of museum admission fees would definitely add up, but the nice thing about a great urban scene like New York is that you can also opt to simply walk around, take in the sights, and people-watch.

travel destination on a budgetAfter some deliberation, we arrived at California as our destination of choice. Finance was of course a major consideration, but we also thought about the kind of trip that we want to have.

Since we get the urban experience everyday as Chicagoans, we decided to put New York on hold for now. And although California will be more expensive than a week of lounging on the beach in Michigan, we decided that going somewhere new and so different from our current landscape would make for a more exciting, memorable trip that is well worth the extra expense. As David says in his great book of frugal travel tips, the travel experience should be your priority over extreme frugality.

So, our vacation week will go as follows:

Sunday: Fly to San Francisco
Tuesday: Drive a rental car to Napa Valley
Thursday: Return to Chicago

I like a lot of things about this plan. By only staying four nights, we are cutting down on hotel costs but still allowing plenty of time to feel like we’ve really gotten away. Dividing our time between San Francisco and Napa lets us see more of California, both urban and less-than-urban. We can explore a new city and still find time for reading and relaxing between tastings in wine country.

Ironically, my favorite thing about the plan is the Chicago cushion around the actual vacation. We will have Saturday in Chicago before we leave and then Friday through Sunday when we come back. This will give us enough time to pack before the trip and to unwind when we come home so that we’re ready to go back to work on Monday. Plus, Friday and Saturday can be like a staycation for us—we’re not planning on working, so we might as well have some extended, much cheaper vacation fun in our own backyard.

But before we start planning our staycation, there’s still a lot to do for our real vacation: flights, where to stay, what to do—just about everything. There’s more to come in the next post.

(MICHELLE, THE AUTHOR’S NOTE: This is the opening post in a short series that will chronicle the financial choices behind my first real vacation. I’m a frugal person, but will I be able to stick to my guns and make wise money decisions [and still have a great trip]? We will find out.)

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{ read the comments below or add one }

  • Kellie @ Big Style Finance says:

    Getting home before the weekend is always a good plan. There’s nothing worse than coming home from a holiday and having to go straight back to work the next day.

  • Wilson Pon says:

    Honestly, Michelle. The detailed planning is definitely important, especially if you want to save more money in your pocket when you’re traveling. Remember, don’t buy any gifts in the tourists’ traps areas, as the price is relatively one to two times more expensive than other places did.

  • Lee says:

    Yikes, you guys need a vacation.

    I’m planning my own frugal little getaway for the new year at the moment, and doing it on a budget is hard, but fun all at the same time. I’ve yet to pick a final destination though.

  • Matt Jabs says:

    I had to put my plug in for Michigan. I live in Lansing and absolutely love traveling to Michigan’s west coast for the incredible sand dunes and beaches, not to mention the awe inspiring great lake.

    I have been to Lake Michigan, the Atlantic Ocean and the Pacific Ocean… and I prefer the lake many times over.

    When you go to Cali and travel south along the coast, make SURE you take highway 1. It takes quite a bit longer than the expressway, but the scenery is breathtaking and something you will never forget.

  • Financial Samurai says:

    Welcome to San Francisco. It’s about 78 degrees this weekend, and clear skies.

    I’ve lived in 7 different countries, and over 13 different cities in my life, and I can promise you that San Francisco is right up there. I really think one of the keys to happiness is to live in a beautiful place. Once I discovered SF after NYC, I knew I could never leave. Every weekend is like being on vacation.

    I remembered it snowed 18 inches of powder one day and my friends and I took a day trip to Tahoe to enjoy the powder. The very next day, it was 72 degrees and sunny in SF and we were playing tennis. That is PRICELESS.

    For your next trip, try and come to Napa end of August right before the “crush.” It’s so fun to eat the grapes right off the vine. There may still be some later harvest Cab grapes though.


  • Robert says:

    I’m going to vacation to a place nearby, like San Francisco. My only expense will be gas and a hotel.

  • Jane says:

    Glad you’ll be visiting California. San Fransisco is beautiful. (I’ve never been to Napa Valley, but hope to go one day.) Maybe on another vacation you can visit Southern California, too. 🙂

    Can’t wait to hear more about your trip.

  • David@DINKS Finance says:

    No vacation since 1998? None??? That just sounds awful to me. I am guessing he is not including any sort of weekend getaway (me and my girlfriend went to Duluth for vacation Friday – Sunday one weekend at a cost of only $320.). I’m sure you two will enjoy this more than anything.

    If everyone planned a vacation like you, our “young adult” generation would avoid a lot of the financial problems we end up in i.e. deep debt, splurging, buying things we can’t afford, etc. You two are models of how we should plan vacations.

    • MoneyNing says:

      I never really went anywhere when I was young too. Not going on any vacation for a decade is not unheard of.

      We, being North American citizens with so much opportunity and social programs should feel really lucky because even when we say we are poor, we can still consume, buy HDTVs and go on vacations. In other countries, this is simply not the case.

    • Michelle says:

      It’s really true, not even a weekend get away. Aaron was a little reluctant about me sharing his “sad story” with the world, but he came around and I am so glad because now we’re getting all of these great suggestions.

  • Jacob says:

    California is a good place to visit and I’m sure you will enjoy it. I’m guessing you are a wine person if you visit Napa and you will have tons of fun. Remember to chat with the locals and winery owners and they might even bring out wine that’s free and better than the ones they offer in wine tastings.

  • Craig says:

    It’s tough to plan a trip that way, cause you may not be satisfied in the end. I like having a destination in mind and figuring out the costs and then saving towards the goal.

    • MoneyNing says:

      It would be great if you already have a list of places you want to go but many people often don’t have a specific location in mind. Also, I think that the more flexible you are, including where you want to go, the better deals you can generally get.

      • Michelle says:

        I think David’s right; being flexible does open up more opportunities for deals, but it probably works best when you’re able to be spontaneous. I think of folks who are always on the look-out for last-minute get-away packages. I’ve never done that–my style is definitely much more like Craig’s in that I like to save toward a goal. Maybe for my next trip I’ll decide to be spontaneous. That is, if spontaneity is something that can be decided 🙂

        • MoneyNing says:

          Don’t underestimate how good those last minute deals are. I checked those last minute cruise deals after I got back and some of the 7 day cruises were being offered for $250 per person. Since everything is included (food, entertainment etc), it almost cost the same if you were living at your own home instead of taking advantage.

  • MoneyNing says:

    The media and travel companies always say that “staycation” is a trade down when it really is a great way to wind down and relax.

    Since you are at home, the key is to get away and do something else instead of staying home and staying connected with work. Without the pressures of work, staying at home is just as good a vacation as traveling. Sometimes, it’s even better because traveling, especially when air travel is involved, can become quite stressful.

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