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Managing Summer Vacation Expenses

by Robyn K. Fuller, CPA | Apr 04, 2017   ()

While it may feel like warm weather is taking forever to catch on in Michigan, summer vacations – and all their associated expenses – are right around the corner.

The best time to start planning for a summer vacation is far before you step into an airport. If you take a summer vacation every year, you may find some benefit from beginning your vacation planning process by including a vacation line item on your annual budget. Alternatively, you may find it easier to update your annual budget as soon as you decide to take a trip. Whether traveling with friends, family, your mate or on your own, this sort of planning in advance can help make your summer vacation enjoyable and relaxing.

Working with a travel agent may provide some opportunities to manage the expenses of summer travel. Travel agents can help you understand which parts of your trip will be cheaper if booked in advance. They can also advise you on which may be less expensive if you wait to schedule them after you arrive at your vacation destination.

You may find your vacation is easier if you have paid in advance for certain services or amenities. Travel agents can help put together packages that lump these costs together.  These packages could include transpiration from airport, recreational activities or other add-ons. Some “all-inclusive” vacations even include the cost of your food and drinks.

Travel packages and all-inclusive vacations may be a good way to help manage expenses in advance of a trip. It is, however, important to understand what isn’t included in a package deal. Oftentimes, for example, travel packages and all-inclusive deals don’t include resort fees. These are fees that you may need to pay in order to get towels for the pool or to access different parts of the resort. These are often automatically charged to the credit card used for booking the vacation.

If you plan to travel with a group, working with a travel agent can allow vacationers to pay weekly, monthly or in one lump sum to accommodate all styles of budgeting. By using a travel agent, vacationers can mix up their payments up however best fits into their own financial planning. While I prefer to make weekly or monthly payments that correspond to my pay period, for example, my travel companions may prefer to pay in one lump sum to get the expense out of the way. It is important to note that most travel agents require a deposit and then that the trip be paid in full up to 40 days in advance.

Once you’ve managed the big costs of travelling, such as accommodations and transportation, you will also want to make sure to budget for day-to-day spending money. Planning for daily expenses and giving yourself a dollar limit will help you not spend recklessly.

Daily expenses may include things like food and dining, activities and shopping for souvenirs. While all-inclusive vacations may provide for meals at a resort, for example, I often plan to have a nice meal at a local restaurant. Many restaurant menus are available online. A quick look beforehand can help you understand approximately how much you will spend on your meal. Similarly, a quick search of a travel-planning website like TripAdvisor can help you understand how much to budget for daily activities. If you want to bring back souvenirs, for yourself or others, consider making a list beforehand of recipients. I often look for less-expensive mementos such as post cards or shot glasses.

You may have additional considerations when travelling with family – especially with children.  For example, while you may save on a toddler’s airfare – often babies fly for free while they’re less than 2 years old – you may find that you’re on the hook for additional baggage fees if you need to stow a stroller with your luggage. Also, you may find you need to book a larger rental vehicle to accommodate a car seat. Travelling with a baby does change plans – I now bring my mom.

Planning for emergencies and unplanned contingencies while vacationing can often be easily managed by carrying the right credit card. Carrying a credit card with a low balance will allow you to deal with unexpected expenses; for example, if you need to purchase a last-minute ticket to get home quickly in an emergency.  If you are traveling abroad, look for a credit card that doesn’t have any foreign transaction fees. You may also look for a card that offers travel insurance, but be sure to read the rules to see what is and isn’t covered.

There are many factors to consider when managing summer vacation expenses. But advance planning will ensure your trip is relaxing and enjoyable.

Robyn K. Fuller is a Certified Public Accountant and has worked in the accounting industry for just over 9 years. Her experience includes financial, operational and compliance auditing across several industries, including government, public and private practices. Contact her at robyn.kristian@gmail.com.

Source: MICPA
Source: MICPA

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