1. PERSONAL FINANCE

How to Save Money on Vacation

How to Save Money on Vacation
BY John Russo
May 28, 2019
 - Updated 
Nov 26, 2024
Key Takeaways:
  • Create a budget to avoid overspending on vacation.
  • Pack light to avoid baggage charges.
  • Travel like a local -- eat in, use public transportation and skip the silly tourist trinkets.

Summer is just around the corner, are you excited for your vacation yet? Whether you’re traveling abroad or visiting one of your favorite cities here in the United States, summer vacation can be expensive. So, before you book your flight or start packing your bags, check out the following advice on how to save money on vacation.

Create a vacation budget

Before you start planning your vacation, you should know how much you have to spend. Take a look at how much you’ve set aside for your trip, then set up a vacation budget outlining how you’ll use that money. If you haven’t yet created a general household budget, this would be a good time to do so (and you can base your travel budget on this).

Make sure your budget covers:

  • Flights, cab or bus fare, car rental fees, and gas

  • Hotels, AirBnb, VRBO, or hostels

  • Restaurants, grocery stores, and snacks

  • Shows, museums, and other excursions

After creating a budget, it will be easier for you to decide where you can afford to go and how much you can spend when you’re there. There are also plenty of resources focused on traveling as cheaply as possible.

Pack light, but not too lightly

Checking bags at the airport can be expensive. Most airlines charge $25 to $35 per bag (or more), which could add up to $75 or more for a round trip flight—money that could be better spent elsewhere. You’ll want to take the time necessary to make sure you’re only bringing what you truly need. If you’re only going on vacation for a few days, avoid baggage fees by limiting yourself to a carry on and personal item.

Knowing how to save money on vacation by traveling light comes with a caveat, though. If you end up saving in the long run by bringing extra luggage, then you’ll want to compare those savings to the cost of checking an extra bag. For example, maybe bringing along extra clothes will keep you from buying too many new outfits while traveling. It’s a balance.

Take public transit or walk

Taking public transit only costs a few dollars, and compared to a cab, Lyft, or car rental, it’s a cheap way to get around. Plus, it offers you a great way to experience life like a local and, depending on the route, could even provide a scenic tour of the area. Depending on where you’re visiting, you also may want to consider renting bikes to get around town.

If you booked a hotel in the heart of the city, you may want to walk instead of opting for public transit. You can find great walking paths by doing a little online research. For example, if you’re headed to sunny San Diego this year, Circulate SD has some great walking maps to help you get around.

Watch what you eat

Although checking out the local culinary scene is a great way to sample the local culture and experience something new, food can be a huge expense when you travel. You don’t want to deprive yourself of this, but you also will want to plan ahead so you can strike the right balance.

To save money on food while traveling, follow these tips:

  • Look at the time. Most restaurants’ lunch and dinner menus are similar, but the price point changes depending on the time of day. That’s why you should eat out at lunch instead of dinner.

  • Eat like a local. Don’t be afraid of food trucks and carts when you’re in a new city. The food is usually delicious, and easy on your wallet, too.

  • Go grocery shopping. If you booked a room with a kitchenette, use it. Buying groceries and having a few home-cooked meals could save you a ton.

Use coupons and look for cheap or free local events

Sites like Groupon, local newspapers, and travel guides could have some great deals on local attractions—so make sure you’re checking them during your trip. You can also find coupons and deals on tourism websites. It only takes a few minutes to do the research, but it could really pay off.

Speaking of local attractions, did you know you could get into some of them completely free? National parks, historical sites, and museums all offer free days—and it’s super easy to find out when they are by doing a simple online search. For example, here’s a list of all the free days for Portland museums.

Don’t use an international phone plan

You may be considering an international phone plan if you’re traveling to another country. But, as those who really know how to save money on vacation already know, it could cost you a small fortune. These plans could cost anywhere from $15 to $100+ per month, plus roaming fees or additional charges to send text messages.

Unless you’re traveling for months on end, there’s little point in getting an international phone plan. Your smartphone can make calls, send texts, and do everything else using the internet. Using publicly available Wi-Fi services (or purchasing a Wi-Fi plan) could be a better way to save money while still having access to your phone during your next vacation.

Use a travel credit card

Want to avoid foreign transaction fees and get rewarded for spending during your vacation? You may want to consider getting a travel rewards card. While there may be yearly fees associated with these cards, the points, and rewards that could offset these costs. Just make sure to stick to your budget, use these cards responsibly, and pay the balance in full each month so that you don’t get into debt.

If you follow these simple tips, you’ll know how to save money on vacation without missing out on a good time.

Leverage travel rewards

It’s possible to save money on travel by stragically using credit cards that offer travel rewards. Keep in mind that if you already have credit card debt that you’re working to pay down, it’s not a good idea to get new credit cards or continue to make purchases on your existing credit cards.

Once you get rid of your credit card debt, look for a credit card that offers points or miles that you can redeem for flights, hotels, and other travel expenses. Some cards also have perks built in, such as automatic travel insurance when you use the card, free airport lounge access, or even statement credits for certain types of purchases.

To maximize your travel rewards, wait for a generous welcome bonus before you apply, and make sure the points-earning opportunities align with your spending habits. For example, if you travel frequently for work, consider a card that offers bonus points on airline purchases. If you’re a busy parent driving the kids to various activities every day, consider a card that offers bonus points on fuel purchases. You get the idea/.

Once you have a card, avoid making charges that you can’t afford to pay off. Credit card rewards are much smaller than the interest credit cards charge. If you carry a balance, it’s difficult or impossible to come out ahead, even if you earn lots of points and miles.

Plan off-season travel

Booking travel during the off-season is a great way to save money and still have fun. Off-season just means it’s a less popular times to travel, and prices are typically lower. For instance, if you’re planning a trip to Hawaii, you might pay a lot less to go in October compared to August. But the weather will still be beautiful. If you want to travel to the Caribbean, the off-season is usually between May and November.

Play around with dates on hotel and airline websites, and sign up for alerts (you can set a Google alert to notify you when prices change for your flights). 

Take advantage of travel insurance

It’s normal to think of insurance as a potentially unnecessary expense…until you need it. Travel insurance could help you save money if your plans change for a covered reason. Granted, changing your mind may not be a covered reason. But if you have a medical situation, for example, you might be able to get a refund on an otherwise nonrefundable purchase. Travel insurance can cover a variety of things, such as trip cancellation, trip interruption, medical expenses, and baggage loss.  Read the policy carefully and make sure you understand what’s covered (or not).

Pro tip: Some top-tier travel credit cards provide free travel insurance when you use the card. Be sure to check so you don’t end up buying something you already had. 

Budget for travel

Travel can be a line item in your budget just like groceries and car insurance. Set a savings goal and add to your vacation fund every month. To set the goal, just price out a typical trip to the place you want to visit. Then, divide the total by the number of months you have until your trip. The result is your monthly savings goal.

Budgeting isn’t meant to make you feel like you’re denying yourself what you want. On the contrary, when you’re budgeting for travel, you get to choose to avoid unnecessary spending that’s less important to you, so that you can put more dollars toward your trip. If you’re struggling to reach your savings goal, try to find items in your budget that you can pare back on, or ways to bring in more money.

Bundle travel bookings

Many travel providers offer discounts when you purchase various pieces of your trip in a package. For instance, your airline might offer a special price on a hotel room if you book through their website. This could save you money compared to booking your flight and room separately. 

This is where research is important. Sometimes you’ll be able to find better deals on your own if you’re willing to put in the time. 

Also, be sure to read and understand the cancellation policies before you buy.

Learn how to save money on vacation and more

Vacations should relieve stress, not cause it. Experiencing an enjoyable trip that’s affordable and paid for can give you a pleasing sense of satisfaction, whereas coming back from a vacation in debt takes some of the fun out of it. The best thing you can do is plan well. Research prices and options and save money when you can.

We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during October 2024. The data uncovers various trends and statistics about people seeking debt help.

FICO scores and enrolled debt

Curious about the credit scores of those in debt relief? In October 2024, the average FICO score for people enrolling in a debt settlement program was 582, with an average enrolled debt of $26,002. For different age groups, the FICO scores varied. For instance, those aged 51-65 had an average FICO score of 586 and an enrolled debt of $27,778. The 18-25 age group had an average FICO score of 552 and an enrolled debt of $15,780. No matter your age or debt level, it's reassuring to know you're not alone. Taking the step to seek help can lead you towards a brighter financial future.

Home-secured debt – average debt by selected states

According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) (using 2022 data) the average home-secured debt for those with a balance was $212,498. The percentage of families with mortgage debt was 42%.

In October 2024, 25% of the debt relief seekers had a mortgage. The average mortgage debt was $236504, and the average monthly payment was $1882.

Here is a quick look at the top five states by average mortgage balance.

State% with a mortgage balanceAverage mortgage balanceAverage monthly payment
California20$391,113$2,710
District of Columbia17$339,911$2,330
Utah31$316,936$2,094
Nevada25$306,258$2,082
Massachusetts28$297,524$2,290

The statistics are based on all debt relief seekers with a mortgage loan balance over $0.

Housing is an important part of a household's expenses. Remember to consider all your debts when looking for a way to get debt relief.

Manage Your Finances Better

Understanding your debt situation is crucial. It could be high credit use, many tradelines, or a low FICO score. The right debt relief can help you manage your money. Begin your journey to financial stability by taking the first step.

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