Setting Up a Travel Budget

Feb 24, 2009

You can save money by getting a suite with connecting rooms.

A father of two, Steve Hirschhorn has an MBA degree and was a financial advisor for Morgan Stanley. After dealing with million-dollar portfolios, what does the Los Angeles-based finance professional do when planning his own family’s vacation?

"I don’t specifically set a budget for a trip," he said, "but I am extremely price sensitive and have a general idea of what I am willing to spend."

Hirschhorn relies on a lot of Internet research and a few low-tech tricks as well, including getting travel books from the local library, in order to save a few dollars. And don’t forget those museum and zoo memberships, he said.

"I usually plan my itinerary ahead of time and look up the museums, zoos and aquariums we plan on visiting so that we can use reciprocity from our existing memberships in Los Angeles," he said. "Since we’ve joined most of the local museums, zoos, etc., we often get in free when we travel."

Here are some steps for setting up a travel budget.

1. Once you settle on a destination, ask yourself what you’re really expecting to get out of your vacation. Do you want to lie on a beach all day or is this your first trip to Europe and you want to see 10 countries in nine days? These goals come with very different monetary implications.

2. Separate your budget into four categories: transportation, lodging, food and entertainment/activities.

3. When considering transportation, don’t forget the cost of buses, taxis, subways or train passes.

4. Experts generally say lodging accounts for one-third of total travel expenses. When planning your lodging budget, ask yourself what’s best for your family — hotel versus condo, for instance. Don’t forget to consider suites and connecting rooms.

5. When it comes to food, choose to save money by shopping at local markets so you can make your own breakfasts and lunches. It’s cheaper and also more fun to see how the locals do it.

6. Separate activities into "must-do," "would like to do" and "only if I find a bag of cash." Go online and research the costs of the must-dos and budget that money before you go. Research free activities as well, and bring a list of those with you.

7. Be flexible. Stuff happens, and ultimately you can’t let a few bumps in the road ruin quality time spent with your loved ones.