I Spent a Month in Costa Rica with this Fail-Proof Vacation Budget

May 31, 2022
Learn how to budget for your next vacation and enjoy your time off with total peace of mind by setting a financial plan and vacation budget.
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Britt & Laurie Anne
Two female investors in their 30s with a collective net wealth of over $6 million+
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It’s summertime, and no matter how long it’s been since I actually got “summer vacation,” I know I always start itching for a balmy vacation and getaway travel come June.

And honestly…we all need it. Whether you wear a blazer and lead meetings all day or rock the yoga pants while corralling little ones or both, we all need a break from our everyday grind once in a while.

But to make the time off as rewarding as possible, you need a plan. And I don’t mean you need to know where you’re going -- I’m all for spontaneous travel, but you do need a financial plan and vacation budget!

This year I took a month off and traveled through Costa Rica, surfing and exploring the west coast. It was absolutely pivotal for my mental health and had long-lasting impacts on my well-being.

Whether you’re planning an epic vacation abroad, a dreamy backpacking trip, or a fun staycation, it’s all going to cost money. And spending money can be stressful, which negates the entire point of vacation. So, setting a travel budget ahead of time and saving for it can help you enjoy your vacation with total peace of mind.


Alright, now let’s get into how to budget for vacation.

1) Decide the maximum amount you can spend

Before you decide ANYTHING – including where you’re going, you need to decide the maximum amount you can spend on your vacation.

Set a realistic vacation budget. Maybe it’s $500, maybe it’s $5,000. Once you have a solid goal, you can start figuring out how you can save up to make it happen.

Start paying attention to how much money you spend each month on non-essentials – i.e., things that make life fun, like dining out or buying new shoes. I don’t believe in cutting out EVERYTHING that you enjoy, but think about how you can reduce your spending to start saving for vacation.

That brings me to tip #2…

2) Create a vacation saving timeline

Based on how much you plan to save every month, how much you’re willing to spend on vacation, and, of course, when you plan to go on vacation, create a vacation savings timeline. For instance, if your vacation budget is $2,000, then plan to set aside $500 a month for four months. That way, you can make sure you’ll have plenty of money set aside in time to pack your bags!

Want some tips on saving money? We've got you covered!

vacation budget - vacation savings timeline

3) Open a vacation savings account

Every time you contribute to it - or save on something else - remember that you’re one step closer to your vacation!

4) Decide what type of vacation you want

Now, it’s time for the fun part: designing the type of vacation you want based on your budget. In this step, you’re creating your high-level budget to decide how much you can spend on flights, hotels, food, activities, souvenir shot glasses, etc. A few things to think about:

  • What’s the purpose of your vacation? I know that makes travel sound like work, but think about whether you want to relax and recharge or have an adventure or experience something entirely new. That will help you decide where you want to invest the majority of your budget. It could go toward a nice hotel or do a camping trip or do an extended getaway in a hostel. This will help you figure out where you want to go big and where you can cut back, which brings me to…
  • What do you want to splurge on? Maybe you love trying new food and you want to budget a little extra for enjoying some local cuisine. Maybe you LOVE a luxurious resort. Or you want to pad in extra for going on adventure-filled excursions. Figure out where you want to splurge so that you can figure out where you can cut costs.

You may want to have a few options in mind while you figure out how much each destination will cost. Which segues into tip #5:

5) Calculate big expenses

Here are the big expenses you’ll want to calculate:

  1. Travel to and from your destination. If you’re really serious about saving money while enjoying an amazing vacation, then you might want to remain flexible on your destination. Use Google flights or sign up for Scott’s Cheap Flights and see what pops up for a discount. And remember that the further in advance you book your ticket, the cheaper flights will be, so if you can, try to plan well in advance.

Summer tends to be a busy travel season, so flights and hotels will typically be more expensive. You can save extra money by traveling in the off-season.

2. Currency exchange fees. If you’re traveling internationally, you may need to pay currency exchange fees. Airport kiosks charge notoriously high fees, so that should be a last resort, and credit cards often charge a fee of up to 3% for swiping your card abroad. Get an ATM card that reimburses you for ATM fees, like Charles Schwab, or a credit card that doesn’t charge a foreign transaction fee, like the Bank of America Travel Rewards credit card or the Capital One Venture Rewards credit card.

vacation budget - credit cards

You could also get currency from your bank or credit union to minimize fees. Having cash in your hand before your plane takes off is a good method for sticking to your budget. You can keep your money in envelopes earmarked for specific categories: dining, transportation, “fun” money…that way, you don’t exceed your budget while still making it feel like you’re on vacation.

And keep in mind too that your money is more valuable in some countries than others. By that, I mean that the US dollar stretches further in Mexico than, say Costa Rica, so keep it in mind.

3. Accommodations. Given the vacation budget you’ve created and the type of vacation you’re envisioning, take a look at the different types of accommodations available - Airbnb, hotels, resorts, hostels? Estimate what each would cost. And if there are certain things you want to do or places you want to visit, keep in mind how far where you’ll be staying is from all of those things. It could help you cut down on transportation.

4. Activities. Maybe you want to do some activities while you’re on vacation. This could be anything from visiting a museum to eating at a really nice restaurant to renting a boat. It all depends on the type of vacation you’ve designed.

6) Estimate additional expenses

Now that you’ve tackled what are typically the biggest expenses, it’s time to think about the “smaller” expenses that tend to add up significantly. This includes…

  • Meals. If you’re staying in an Airbnb or a hotel suite with a kitchen, you may be able to save money by making some meals at home – or at least taking home and heating up leftovers from some amazing restaurants you’ve been to.
  • Pet/house-sitting. If you’re going on vacation during a popular time, rates for pet or house sitting may be higher than normal; I know that most Rover sitters charge a higher rate for holidays. You may be able to bypass this issue or at least lessen it by leaving your pet with family or having a friend stay at your place while you’re gone. But like I said, just make sure you have an idea in advance for how much these things will cost you.

7) Give yourself a cushion

You don’t want to be budgeted down to the last cent. It’s not going to feel like vacation if you’re sweating every time you reach for the envelope or holding your breath every time you open the flap to see if you can afford something fun. Budget for less than you’ve saved and bring along some extra money to spend on whatever may come up – an exciting excursion, an extra drink (or three), a handcrafted necklace… Be sure to make a financial plan for spontaneity.

The Importance of Creating a Vacation Budget

The last thing you want when you’re planning a getaway is financial stress. Having a vacation budget may sound restrictive, but it’s really empowering. It allows you to enjoy your well-deserved vacation without stressing about overspending or going into further debt. You can be confident that you have the money you need to enjoy your mental, physical, and emotional refresh. This is a gift you are giving to yourself. Take a deep breath, sit back (preferably in a beach chair), and enjoy it.

Happy travels!

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