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The Average Cost of a Vacation

Americans tend to put a high priority on vacations, with roughly half planning to take a summer vacation this year. However, with average vacation costs of $2,000 per person, you’ll want to examine your budget to identify potential savings opportunities and limit any unnecessary vacation expenses.

One of the most important aspects of personal finance is saving for things like a home, college education, and retirement. Many people also prioritize taking a vacation, either annually or as the opportunity arises. When it comes to paying for a vacation, though, how do you know what you should be spending and whether you’re getting the best deal for your money?

  • Ways to Fund Your Vacation

Vacation Costs: Lodging, Food, and Entertainment

Hotels and Lodging

Lodging costs can vary widely depending on where you stay. If you’re staying at a relative’s house for a couple of days, that will obviously be a low-budget expense. Spending a week at the Waldorf Astoria in New York City or renting an Airbnb property with its own private pool in Mexico? That will definitely cost you.

Travel

Unsurprisingly, travel costs can vary greatly depending on the method you choose. The price is determined by where you’re going and how you plan to get there.

Plane

Although airline travel has become more affordable to many Americans in recent decades, flying by plane is still pricey enough to make some families think twice. As of 2018, the average round-trip domestic flight was around $350, according to the Bureau of Transportation Statistics (BTS). For a family of four, that amounts to $1,400.

Train

Traveling by train may be a good option to consider, especially if you’re taking a relatively short trip. City-to-city train tickets on Amtrak cost between $20 and $400 one way, depending on the distance traveled and when your tickets are booked.

Automobile

If you’re planning to take a road trip, the first thing you’ll want to do is learn your vehicle’s mileage (i.e. how far your car can go on a tank of gas). Then you’ll calculate the total distance you’ll be driving. The third step is to find the average national gas price, which is currently $2.87.

Food and Entertainment

When it comes to airfare and a hotel, you have limited control over the costs, but the cost of food and entertainment is more flexible. If you mostly eat out at restaurants while vacationing, you can expect to spend more on food — especially when you factor in the cost of alcohol. A typical family of 4, for example, needs to budget at least $132 per day for food, according to one recent study.

Other Expenses

Your airfare, hotel, and food will take up the biggest bulk of your vacation budget — but don’t forget to plan for additional expenses. This includes things like:

  • Additional hotel charges: No matter what hotel you stay at, you can plan to pay extra charges beyond just your nightly fee, such as housekeeping tips and parking fees.
  • Car rental: If you plan to rent a car for the duration of your trip, you’ll want to make reservations ahead of time. You’ll almost certainly pay more when renting at the airport. And don’t forget about additional charges, like insurance, tolls, and fees for multiple drivers.
  • ATM fees: If you catch yourself withdrawing money from out-of-network ATMs, expect to pay your share in ATM fees. The average charge for withdrawing money from out-of-network ATMs hit $4.68 in 2018. Swiping a credit card abroad can result in foreign transaction fees, too. A little planning ahead can help you save money on these unnecessary charges.

Ways to Finance Your Vacation

If you haven’t been able to save for your vacation but still want to get out of town, there are ways to finance your trip. Here are two of the most common methods:

  • Personal Loan: Personal loans can be used for a variety of reasons, including to pay for a vacation. Many people prefer these types of loans over credit cards because you can receive a lump sum of money, often at a lower interest rate and with fixed monthly payments.
  • Home Equity Loran or HELOC: You can use a home equity loan to pay for a vacation, often at more favorable rates than you’ll find elsewhere. Just be cautious with this method; you don’t want to risk your home to pay for a trip to Disney.

Bottom Line

The average American will spend a good part of their annual budget on a vacation — and many will go into debt to do so. But if you’re on a limited budget and need to spend less, there are many ways to save on your next trip. By planning in advance and cutting corners where possible, you will be in a better position to relax during your next vacation.

With the help of LendEDU’s blog, tools, and resources, our goal is to assist you in making educated financial decisions. LendEDU: Educated Financial Decisions.