5 Budgeting Tips for Holiday Travel Costs

Being smart about budgeting is essential when planning holiday travel. Between flights, hotels and meals, costs can add up quickly, and delays or last-minute changes can add to the expense.

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Whether you’re planning ahead or preparing for the unexpected, these budgeting tips can help you manage holiday travel costs.

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“Consumers should begin planning their holiday travel budget at least three to four months in advance — ideally starting in August or September,” said Kevin Shahnazari, founder and chief executive officer of FinlyWealth. “This provides ample time to create a strategic savings plan, compare travel options and take advantage of early booking discounts.”

This also allows travelers to break up the cost into smaller pieces. “By starting early, travelers can break down the total anticipated expense into manageable monthly savings targets, reducing financial strain,” Shahnazari said.

And if you didn’t start as early as you wanted this year, be sure to keep this in mind for future trips.

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Julie Beckham, assistant vice president and financial education development and strategy officer at Rockland Trust, said it can be helpful to start a separate holiday fund so you aren’t interfering with your regular savings.

“It also gives you a set amount of money, versus dipping into the emergency fund or money you use to pay your bills,” she explained.

Shahnazari suggested that when choosing a dedicated travel savings account, you should prioritize features like high-yield interest rates, no monthly maintenance fees and easy transfer capabilities. He said to look for accounts that offer the following.

• Competitive annual percentage yield (APY) rates

• No minimum balance requirements

• Instant digital transfers

• Optional automatic savings features

• Integration with budgeting apps

“If you’re late to the game this year, I recommend researching your destination as soon as possible to ensure it’s feasible with your current financial situation,” Beckham said. “You may realize hotels are booked or surging out of budget; however, there may be more affordable options available like Airbnb or staying with friends and loved ones. Sometimes you can also get a better deal on flights by traveling on the day of the holiday.”

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