A guide to managing summer vacation costs

A lot goes into planning and managing summer vacation costs. By setting a realistic budget, using savings strategies, and selecting cost-effective travel options, it’s possible to reduce financial stress and enjoy a memorable trip.

Read on to learn how to save for a vacation, stick to a budget, and use tools to split and pay back shared costs among friends and family.

How to save for a summer vacation

Whether it's a road trip with family, camping with friends, a beach getaway, or exploring an international destination, it’s important to understand the various costs associated with a summer vacation. Common costs include transportation, accommodations, food, activities, and other miscellaneous items.

Looking for ways to save? Consider these savings strategies:

• Automated savings: Setting aside money automatically from regular paychecks can significantly boost savings. For instance, with PayPal Savings¹, users can set up separate funds for different purposes. Planning a vacation in Cancún? PayPal allows you to set up a "Cancún trip" bucket and automate contributions to this fund.
• Budgeting apps and tools: Budgeting apps, spreadsheets, and digital wallets, can be used to track income and expenses, identify potential areas to cut back spending, and allocate funds for savings. Saving apps and expense tracking guides can be helpful for staying on track.
• Savings challenges: Consider trying a savings challenge such as a ‘no-spend month’. This may help reduce unnecessary spending for a set period, thereby boosting savings.
• Side hustles: Side hustles are one way to earn additional money that can then be added to a vacation fund.

Planning a summer vacation budget

One way to set a summer vacation budget is to first assess how much discretionary money is available.

For example, if someone manages their overall budget using the popular 50/30/20 rule where 50% of income goes to essential expenses, 30% goes to discretionary spending, and 20% is saved, then that 30% can be put toward vacation costs.

Next, it’s helpful to think about how to manage the different types of expenses that’ll come up during the trip. These typically include:

• Transportation: Costs for flights, car rentals, fuel, public transport, and other travel-related expenses
• Accommodations: Expenses for hotels, vacation rentals, camping sites, or other lodging options
• Activities: Costs for excursions, tours, entry fees, and other planned activities
• Food: Dining out, groceries, snacks, and drinks
• Additional costs: Costs such as travel insurance, tips, service charges, and emergency funds

How to maximize travel rewards

Using travel rewards to help with summer vacation costs can significantly reduce the overall cost of a trip.

There are several types of rewards associated with credit cards, loyalty programs, and digital wallets that allow travelers to earn points or cash back rewards on travel-related expenses.

For example, travel points on credit cards are rewards earned for eligible purchases. When enough points are accumulated by the cardholder, they can redeem them for things such as flights, accommodation, or sometimes even upgrades.

Another way to earn rewards is via cash back apps that offer earning potential for spending with certain travel-related companies or airlines. For example, PayPal users can get access to travel-related deals and offers in the Travel category in the PayPal app. It’s also possible to earn cash back on travel essentials by savings deals in the app and redeeming them at checkout.²

The way points and cash back are earned and redeemed will vary depending on the program.

Stretching your budget further

This time, it’s the destination and the journey that count. Choosing where to go can have a significant impact on the cost of a summer vacation. Regional price differences for accommodations, activities, and dining can play a role in helping travelers choose their destination if seeking out a low-cost trip.

For example, a trip to Southeast Asia could be more cost effective than a European vacation due to lower local prices. Additionally, traveling during shoulder seasons can result in substantial savings on flights and accommodations.

Flexibility is the name of the game here. Be open to off-peak travel dates and cheaper destinations. This will go a long way to stretching the vacation budget further.

Thrifty traveler hacks: Saving on daily expenses

Here are some practical tips to save money on daily travel expenses:

• Cook and shop at grocery stores: Instead of dining out for every meal, consider cooking some meals or buying ready-to-eat food from grocery stores.
• Use public transportation: Buses, trains, ferries and other local methods of getting around are usually cheaper than taxis and hired cars, and provide an authentic way to explore a destination.
• Pack light: Avoid baggage fees by packing light and sticking to carry-on luggage. This can also make traveling more convenient and less stressful.
• Free or discounted activities: Seek out free or discounted activities, such as local festivals, parks, museums with free admission days, or self-guided walking tours.

Efficiently splitting summer vacation costs

Using secure peer-to-peer (P2P) payment methods can simplify the process of splitting costs, making it easy to send and receive payments between friends and family.

Here are some common examples of shared vacation costs:

• Vacation rentals: Dividing the cost of a shared vacation rental can be easily managed. One person can pay the rental fee upfront and the rest can transfer their share via a P2P service.
• Group meals: When dining out as a group, one person can pay the bill, and the others can quickly transfer their portion to the one who paid.
• Activities and excursions: Whether booking a group tour, a shared boat ride, or a joint excursion, splitting the cost becomes seamless with P2P payments.

The process of splitting costs usually involves selecting the person to send or receive the payment, entering the amount, and confirming the transaction. Different platforms may have varying steps, but the overall process is typically quick, easy, and safe.

Payment security when traveling

Some P2P services offer features like buyer protection, which can help give travelers peace of mind when paying for things while traveling.

For example, PayPal Purchase Protection³ protects eligible purchases when money is sent using Goods & Services. This means travelers can pay merchants selling things like artisan market wares or local activities with confidence, knowing the payment is secure.

Need to send money to local friends and family while traveling? PayPal has this covered, too. It’s possible to send money to people in 110+ countries and in local currency so they don’t have to wait.