How to Actually Afford a Family Vacation (And What Not to Do)

The “5 Ps” say “Proper Planning Prevents Poor Performance.” That’s true, but when it comes to finance, I say, “Calculated Proper Planning Prevents Overspending,” or C-3PO. If you live by that phrase, your finances will be golden (ok, I’m done).

Planning is the most important part of a family vacation. It’s fun too, because you’re deciding what you get to do, where you’ll go… what you’ll eat! The important stuff.

Before you can begin budgeting anything, you have to know the basic idea of where you’re going, and what you’re doing. You have to calculate the cost.

Calculating the Cost

With a few questions, you’ll get a good idea of how much you’re going to spend. These are the questions we ask ourselves when we travel anywhere, even for a weekend trip:

• When do you plan to go?
• Where are you going?
• How are you getting there?
• What’s the cost of travel? (Plane tickets, fuel, rental, etc.)
• Where are you staying? (AirBNB, hotel, hostel, etc.)
• What will you be eating? How much are you eating out?
• Which attractions do you plan to visit and what’s the cost?
• Do you plan to make any big purchases? (Jewelry, art, decorations, etc.)

As a sidenote, I highly recommend AirBNB, especially for large families. That’s what we use 99% of the time, and we stay in great homes and apartments for less than half the price of standard hotels. On top of that, if you sign up with this link, you’ll get $50 off your first trip.

The goal is to get an idea of all the purchases you’ll be making. If you’re taking a road trip, and you plan to stop for snacks at truck stops along the way, calculate that in. You can calculate anything into the initial cost, but the idea is to not deviate from the initial cost, at least not much.

Related: A Comprehensive Guide to Minimalist, Light Travel With Kids

Now it’s time for the calculation. This is going to be more of a guideline than a strict, fixed amount, so I would add a few hundred dollars as a buffer, especially for large trips.

Now you have your amount, and you have an idea of when you want to take the vacation. It’s time to see if they match up.

For example, if you’re planning for a vacation in one year, and the expected cost is $5,000, then a little over $400/month will get you to your goal. Once you know your goal, simply set up an automatic draft to put that money into savings each month. Automatic vacation.

It’s always better to plan farther ahead, so you can save money on lodging, plane tickets, and the like. But what if the timeline doesn’t work out?

When Your Funds and Your Ideas Don’t Jibe

If you count the cost, and realize you don’t have enough time to pay for this vacation, you still have three good options:

1. Take a less expensive vacation. Find cheaper lodging, somewhere closer to home, or both. Consider going to visit family — that’s usually the cheapest option. It may be better to wait for the more expensive vacation, until you’ve had time to save.
2. Put off the vacation until you can afford it. There’s no time like the present, unless we’re talking about a vacation you can’t afford. In that case, there’s no time like [insert the time period in which you’ll be able to afford it]. Or see option #1.
3. Reduce the cost of the current option. You can always take a modified version of what you’re planning — a version you can afford now. Consider driving, instead of flying, if it’s reasonable. Find cheaper lodging. Don’t eat out as much. You can always reduce the cost somehow.

As the leader(s) of the family, don’t feel obligated to provide a certain type of vacation for your family. Vacation is about rest and time spent with family. And there’s one thing it’s definitely not about: debt.

Don’t Go Into Debt for a Vacation

74% of Americans have gone into debt for a vacation, according to a 2017 LearnVest study.¹ The same study found it takes an average of six months for Americans to catch up financially from an annual vacation. Sadly, it doesn’t seem to be getting better; millennials are more likely than any previous generation to go into debt for a vacation.

Don’t do this. It ruins everything. Don’t ruin everything.

It’s hard to have fun, hanging out in some exotic location, when you know your finances are in worse shape just by being there. Like Dave Ramsey says (paraphrased), it’s amazing how much fun you can have on vacation when you know you’re not ruining your life by going into mountains of debt to get there.

People do it everyday. It’s easy to take a loan out for a vacation. Or to finance a vacation through a resort. Don’t fall into that trap.

One could argue that they “needed” a vehicle, so they have a car payment (though it’s still a flawed mindset). Everyone needs somewhere to live, so a house payment is understandable. But a vacation payment?

It will turn into stress — paying off a vacation that you already reaped all the benefits of, but still have to pay for. Delayed gratification is a beautiful thing, and your vacation will be much more enjoyable if you implement some of that.

And then there’s the most extreme example of financing a vacation: timeshares.

Should You Buy a Timeshare?

If you’re looking for a quick answer: no. If you want to know why, keep reading.

Let me clear something up. A timeshare is not an investment. A timeshare is you financing all of your vacations for the rest of your life. If you think it’s worth it, and you think you’ll use it every time you have to use it (or lose it), then by all means consider a timeshare.

But if you’d rather take less stressful vacations and make your own decisions, don’t buy a timeshare. I know, because we’ve bought a timeshare before. The salesman started at $120,000, and we left with a $9,000 timeshare, after hours of saying “no.” Once the price made sense at the time, we bought. It wasn’t too bad, because it was much cheaper than most timeshares, but that doesn’t mean it was good.

Timeshares generate more than $10 billion per year,² so they’ve obviously got their sales system down. They’re selling a lifestyle of luxury. Timeshare salesmen can be some of the sketchiest and most manipulative people, but I honestly think most of them believe they’re really selling a good product.

Why’s a timeshare so bad? There are a few reasons:

1. Timeshares lock you in on vacation options. Even when you can swap or deposit your time to vacation elsewhere, you’re still at the mercy of the exchange company.
2. The maintenance fees can change. These fees will already be fairly expensive, and even though you pay them annually, you’re paying for the amount of time you “own.” So if you own one week per year, and you pay $400/year in maintenance fees, that’s not $400/year, that’s $400/week! And that’s just the maintenance fees.
3. You can’t sell them for much. There are plenty of timeshare websites selling weeks of vacation time for $5. Why? Because people just want out. They’ve been paying maintenance fees every year, whether they use it or not, and more often than not, many weeks are missed.
4. They’re sold on emotion. Why would timeshare companies spend so much money on misleading advertising? Why would they offer you free tickets in exchange for “an hour” of your time (usually more like four hours)? They sell timeshares because people think they’re doing a good thing for their family. Spend that time, money, and energy planning good vacations. Don’t take what appears to be the easy way out. It’s not.
5. They simply aren’t worth it. If you miss your vacation one time, you just spent an extra [insert maintenance fees] on absolutely nothing, not to mention the amount you spent in the beginning or are currently in debt for.

If you already own a timeshare, a quick Google search will show you countless websites willing to help you resell them. Contact your timeshare company first to see if they buy them back. I bet they don’t. And why’s that? Hmm.

If you want a timeshare, but don’t want to be locked in, there are plenty of other websites where people can sell the weeks they aren’t using, so take advantage of other people’s bad financial decisions and buy those weeks, for much less than they’re paying.

Making Lasting Memories

Vacations are a great time to make memories and visit new places. Don’t get so caught up on having a fancy vacation that you forget why you planned a vacation in the first place.

It’s not about being able to say “I took my family to Disney,” or “we vacationed in Italy this year.” You don’t have to say anything to anyone. Just spend some quality time with your family, away from the normal, daily grind.

Don’t stress about taking the perfect vacation. Make some plans and go. And please remember to wait until you actually have the money to take the vacation.

Now you need to figure out where you want to go, so check out: 25 Affordable Family Vacation Spots You Haven’t Considered.

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