Magic Equation: How Much Vacation Can You Afford?

Everyone dreams of the absolutely perfect vacation. A whole year away. Sampling amazing cuisines every night. Five-star hotels everywhere. Screw the cross-country bus, you’ll take the bullet train!

All of that can be yours, at a cost, of course.

Planning a vacation is all about balancing variables. Think of it as a triangle between cost, time and luxury – you can have two, but never all three.


  • If you want a yearlong trip in the lap of luxury, that’s fine … you’ll just have to sacrifice your budget.
  • If you want a luxurious trip without spending a ton, that’s fine, too. You’ll just have to sacrifice duration, like staying just one night at a fancy resort.
  • Want to go away for a long time without blowing all your cash? Great, it looks like you’ll be backpacking and staying in hostels for a while to come.

This is particularly important in the planning stages of your trip, when you’re deciding where to go and for how long. After all, if you planned for two weeks in an expensive country and realize halfway through that you’re going to go over budget, it’s a little too late, isn’t it?

The key to staying on budget is to figure out how you’ll allocate your resources by working the ratio of those three factors: cost, duration and how much you’ll spend on the ground. Think about what matters most to you and then hold yourself to it as best you can.

Based on personal experience as both a traveler and a personal finance writer – and a significant amount of number crunching to make sure my calculations make sense – I’ve come up with an equation to figure out just how much trip I, or you, can afford.The beauty is that the variables are just that: by understanding your travel situation as a give and take, you can tweak one variable to make more room for the others. Do this math:

Total Budget – (Airfare + Souvenir Budget) – (Estimated Cost Per Train Or Bus Ride x Total Rides) – [(Daily Food Estimate + Nightly Hotel Estimate + Daily Entertainment Estimate) x Total Days]

Then take a look at the number you get. Here’s how to decode:

Zero = You are precisely on budget, without a lot of wiggle room.

A positive number = That’s how much extra wiggle room you have in your budget. Toward the end of the trip, you might as well spend it on something fun! If you have a huge positive number, you have a lot leftover. You might even want to rethink some of your plans or calculations. In one direction, you can bring this closer to zero by adjusting your expected budget and simply spending less on this particular vacation. Maybe let the leftovers seed your fund for the next vacation! Otherwise, you might choose to go away for more days or up the quality of your accommodations (therefore increasing your nightly hotel estimate). Once you change a variable, remember to compute again to make sure you’re on track!

A negative number = You’re over budget, and you haven’t even arrived at your destination yet. Something in this equation needs to change. If you’re just a little in the red then you might be able to get away with tweaking a small component of this equation, to avoid altering your travel plans. For example, you might just give yourself less cash to spend on souvenirs, or eat a little more frugally while you’re away.

If you’re severely over budget, however, something’s gotta give. In some cases, it helps to go back to square one and rethink your location. Will you have to pay for expensive plane tickets? Even if the cost of living is cheap where you’re going, that only matters if you stay for a long time. So, for a short trip, maybe you can go somewhere closer to home to reduce the cost of getting there. For a longer trip, maybe you need to go somewhere cheaper, or reassess your travel style. And, of course, one of the fastest ways to knock this number down is to reduce your total days away, since, as you can see, that gets multiplied out.

If you are having trouble knocking down any of your estimated costs, it goes without saying that you can also balance this equation simply by increasing your total budget.

It’s never fun to hack away at your dream trip, but whatever you decide, remember the give and take between money, luxury and time. By choosing which of those three is most important, you’ll be able to craft a trip that’s just what you’re looking for, in the end.

[Image credit: Flickr user]