Spreading Out Vacation Expenses for a Big Trip

Almost three years ago, my family went to Hawaii for the first time. We funded the entire 8-day trip with miles and points! Free trip, woohoo!

After we got home from the trip, it didn’t feel so “free” anymore. We had actually spent a bundle of money while in Hawaii, more than we even thought we would. We were prepared to spend more than normal on food and restaurants, but the amount far exceeded our expectations. Plus, Hawaii excursions ain’t cheap!

Yes, even if you use miles and points to cover flights and hotels, chances are you will spend money at least on food and a few attractions. And depending on where you are going, those extra costs can still add up to a significant chunk of money.

My family is preparing to return to Hawaii in a few weeks. This time, I vowed to get ahead of all those extra costs so that we’re not stuck with a big bill when we return.

Quantify Extra Costs

The first thing I did several months ago was to write down a list of all of the extra costs that would come up on this trip. Even though our flights and first six hotel nights are covered by miles and points, we still have to pay for our Oahu hotel in cash. Other vacation expenses include airport parking in Dallas, rental car in Kauai, airport shuttle in Oahu, resort fee for Kauai hotel, excursions, food, etc.

I really have to pay attention to our excursions costs. My wish list is always bigger than any reasonable budget. You may remember a few months ago I posted my ideal Kauai excursion itinerary to the tune of over $3000! I made some adjustments to cut that number by about two-thirds. Costs add up quickly when you have a large family!

Save Money in Months Leading to Trip

If you follow Suze Orman or Dave Ramsey (financial gurus), they would tell you the simplest way to cover the extra vacation expenses. Start early, take your total cost and divide by the number of months you have until the trip, and put away that amount each month into a savings account. Then you will have all the money ready and waiting when your trip date rolls around.

I can’t argue with that method. However, I’ve found that way to actually be very challenging. If you are organized and disciplined enough to pull it off, it’s a straight-forward way to avoid debt for a big trip.

Pre-pay and/or Buy Gift Cards

Instead of saving up an equal amount of money each month, I prefer to pre-pay certain expenses by item in advance. This solves two purposes: It reserves our activities ahead of time to assure we get what we want, and it helps spread out the costs.

For example, for this trip I decided to pay for one excursion each month leading up to our trip. A few months ago I paid for the sugar canal tubing excursion. The next month, I reserved and paid for a luau. I will be reserving and paying for another excursion this month and one more next month before we go.

At the same time, I’ve been gradually paying off our stay at Disney’s Aulani Resort, even though after we paid the deposit the rest isn’t due until we arrive. I’ve picked up Disney gift cards at office supply stores to get 5X rewards on my Chase Ink card, and my travel agent keeps applying them toward our bill.

Use Credit Card Tools

Of course, I can’t forget about using credit cards tools to help pay for some of these extra vacation expenses. We just used my husband’s 2018 $300 travel credit from his Chase Sapphire Reserve to pay down our Aulani bill.

If I wanted to, I could use some Chase Ultimate Rewards points for certain excursions. Or, I could use my American Airlines miles earned through our credit cards to pay for our rental car. I’m holding off on using those right now due to other potential plans we have with those miles and points.

One unexpected tool we will be using is a 0% interest rate on new purchases. My husband and I each received a special offer from our Citi AA cards in the mail right before the end of the year. The offer is 0% for new purchases through August 1. Jackpot!

We had already met the minimum spending on these cards, and we were currently not charging anything on them. So, we decided that we will sign up for that special offer and charge our food to those cards while in Hawaii.

I am not opposed to using a 0% interest rate as a tool as long as we have a solid plan in place to pay off the balance before the rate expires (see my post on Using 0% APR Credit Cards as Travel Tools). We will likely cancel the cards in July to avoid paying the annual fee. But, that still gives us an extra three months to spread out those expenses. I hope to absorb those expenses in our monthly food budget during those months so that we don’t have to take money out of our savings.

Bottom Line

The bottom line is that it sucks to return home from a great vacation and be stuck with a huge bill you still have to pay. I don’t recommend going into credit card debt to fund vacations. If you plan ahead and use credit card tools, you can get ahead of large expenses. You will feel more relaxed on your trip, knowing that it’s already paid for.

Have you ever returned home from a trip and were stuck with a larger bill than you expected? Are you surprised by how much money you spend on a “miles and points” free trip?

Click here to view various credit cards and available sign-up bonuses