For Kathy Lopez, it's all about the spreadsheet. When she started planning a future trip to Europe with her friends, she put every expense into Microsoft Excel to determine how much the month-long adventure would cost.
"We're going to save a lot of money and planning time on the road," says Lopez, a retired city manager from Prescott in Arizona.
Lopez describes the process - particularly the negotiations with her friends - as "excruciating" but well worth it. They had to agree on destinations, hotels, fares and how much they wanted to spend.
Of course, there's a shortcut for planning a vacation. You can hire a travel adviser. Agents are trained to help you with the budgeting process. And they also know a thing or two about mediating disputes between travel companions over how much to spend - a skill that has probably saved a marriage or two.
One other rule seems to hold true: The money goes fast. Chuck Czajka, a financial adviser in Florida, says you're probably not saving enough. He says you should be allocating 15 percent of your gross income for "vacations and fun spending."
"While that may be hard in the beginning, like a diet, you have to try to get as close as possible to this goal," he says. Otherwise, your next vacation could place a financial strain on you - and possibly leave you in debt.
Whatever you do, don't leave anything to chance. Travel companies don't want you to make a budget. They'd prefer that you mindlessly swipe your credit card at the ticket counter, the front desk, the restaurant. You'll spend more, and you could end up in debt.
They win, you lose.
"The key to budgeting for vacation is planning," says Rosalyn Glenn, a financial planner with Prudential Advisors in Columbia. "The vacation budget should be considered in the annual budgeting process, and the amount for the budget should be determined by the resources you have available to allocate toward that line item." Angela Rice, an accountant and travel adviser from Paradise Valley, Arizona, says clients should be open to discussing their travel budget.
"How much are you able to spend on travel? That will play a big role in determining where you will go, how long you will stay when you will go, and what you can do when you get there."
Rice is right. As painful - and, yes, boring - as creating a vacation budget may be, it's essential. When people go on vacation, they tend to leave common sense at home. I've watched my parents, kids and close friends pay for something they couldn't afford while they were on the road. I think travel companies know our defences are down and take advantage of it.
The fix is deceptively simple: Create a budget, save for your vacation, plan carefully and then stick to the plan. Use a spreadsheet if you must. Consider enlisting the help of a trusted travel agent. But whatever you do, think about how much you're going to spend before you go. Otherwise, you could end up spending money you don't have.
Here are a few general rules for budgeting for a holiday:
Save for your holiday:
Set an amount in your household budget. "See how much each month you can save for your vacation between now and your planned dates," says Tanya Peterson, a vice president at Freedom Financial Network, a debt-solutions company.
Don't go into debt:
Experts agree, it's just not worth it. "Nothing ruins a vacation like the stress of having to pay it off when you get back," says Dan Simon, a retirement-planning adviser at Daniel A. White & Associates.