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Home / Articles / Your Dream Vacation Shouldn’t Be a Budget Nightmare

Almost every bucket list has at least one the vacation of a lifetime to a fantastic destination. Whether it’s whale watching on an Alaskan cruise or a romantic escape to Paris for just the two of you, it’s that one special trip you dream of your entire life. It may feel out of reach, but with a little bit of advance planning, your travel fantasy might be closer to reality than you think. Here are a few things you can do to indulge your wanderlust without breaking the bank.

Start Planning Now

Nothing gets done just by thinking about it. So, get out your calendar and to-do list and set your travel goal. Even if it’s five years away, an actual date on your calendar gives you something concrete to work toward. Break up your big goal into smaller steps, like researching your destination, establishing a budget and making reservations.

Invest in Your Dream

The last thing you need after a long vacation is a big credit card bill as a souvenir. Make your budget and then set a savings goal. Open an account dedicated to your vacation fund and decide how much you can afford to save each week or month. Commit to putting cash gifts, bonuses or raises into your vacation account. For family trips, get everyone involved. Start a communal jar for pocket change, or skip other luxuries in favor of contributions toward the big adventure.

Timing is Everything

Scheduling your trip for the off-season can make travel more affordable. While Paris is beautiful in the spring, the same museums, cafés and shops are also open in November and airfare and hotel rates are generally much lower then too. Avoiding tourist season also means avoiding big crowds and premium prices. Booking flights on major holidays, like Thanksgiving Day, can earn you reduced fares and additional open seats for a more comfortable flight.

Research all Your Options

Comparison shop for hotels, airfare, car rental rates and excursion packages. Make reservations early but check for generous no-fee cancelation policies in case your plans change. More research up front can mean more dollars left in your bank account after you unpack your bags at home.

Protect Your Plans

You’ve done all this work to invest in a big trip don’t let an unexpected medical emergency or natural disaster derail your itinerary. Trip Insurance is a relatively inexpensive way to be sure you’re not left out of pocket if things take a wrong turn. You can often buy flight insurance at the same time you book your airfare. Contact your insurance agent for general travel insurance as well as international health insurance if you’re going overseas. Check with your regular health insurance provider to see how traveling to your specific destination affects your coverage.

Don’t Raid Your 401(k)

Whatever you do, don’t trade fun now for a secure retirement later. Refrain from funding your dream trip from your 401(k). Even if you plan on paying yourself back, unanticipated life events can make that more difficult (leading to hefty penalties), and you may face a significant opportunity cost for not keeping your funds fully invested — even for a short time.

Be a Savvy Traveler

Don’t carry lots of cash on your trip. Use your debit card to take out what you need for purchases at shops, restaurants and hotels. If you go overseas, you can take advantage of the lowest available currency exchange rate by making electronic transactions instead of changing money ahead of time. However, know that some credit companies may freeze your card if you make out-of-US purchases without notifying them in advance.

Are you thinking that your big vacation might not be as far off as you thought it was? Contact your financial professional to make sure your trip is on track with your budget — and your retirement plan. And don’t forget to send us a postcard! Bon voyage!