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Spending Money While on VacationLike a lot of people who are typically careful with their money on a day-to-day basis — I’m responsible with my spending, I follow and maintain a budget, I’m vigilant about not running up consumer debt, etc. — I tend to get a little financially lazy when I go on a vacation. There’s something about being out of town, outside of my daily routine, and in a new environment that causes to me to be a little more reckless with my money.

Well, in March I’ll be heading out to Las Vegas to meet up with some friends to watch the NCAA Tournament, do a little gambling, go out to a few bars and restaurants, and just have some fun for a long weekend with the guys. For this trip, I’m going to do things a little differently when it comes to my “vacation spending.”  I’ve decided to go through a few steps just to make sure my personal finances don’t slip through the cracks while I’m away. Vacations are usually expensive on their own, but they can become very expensive if you don’t do some planning ahead of time.

Pay for Your Trip Ahead of Time

Rule #1 that I’ve learned is that before your go away, your trip should already be paid for.  What I mean by this is that you should have the funds for your vacation already set aside, before booking and going on your trip. It should essentially already be paid for before you even book your flight and hotel. What I’ve been doing is at the end of each month, I transfer about 6% of my net income into an ING “vacation/spending” account. I let that money build up, month after month, and then, when I want to pay for something like a trip to Vegas, the money is already there in my account, waiting to be spent.  I charge my flight and hotel to my credit card, transfer the money from that “spending” account to my checking account, and then pay off my credit card — in full — at the end of the month. This way, I’m not going into debt just to pay for a long weekend in Vegas; I’ve already saved that money, specifically for purposes like this, and now I’m free to spend it. I also try to make sure that all of my secondary expenses for the trip are paid for ahead of time, not just the flight and hotel. For example, I know that we’ll be going to a nice steakhouse, and maybe also a club or nice bar, that will run me a couple hundreds of dollars — those are expenses that I have to also factor in when planning my trip, and how much I think they’re going to cost.

Set Your Credit Card Balance to Zero Before Leaving

I  like to be hyper-organized when organizing my expenses. For my standard, month-to-month budget, keeping my track of my expenses is pretty easy, as I use Mint to monitor my data, and I already have a good idea of where my money is going to go — because I’ve planned ahead for it. When going on vacation, however, unexpected expenses are sure to arise. Taxis or shuttles to and from the airport. Maybe you’ll spend a little more at a restaurant or a bar than you really should have. If I’m doing a little gambling, maybe I’ll have bad luck and lose $50. No matter how carefully you try to project your spending while on vacation, things will come up. It then becomes hard to answer the question: how much money did your trip really cost you? So to make certain that I’m able to track every expense while away, I like to pay off my credit card — again, in full — before I leave, setting the balance to zero. This way, when I get back, I can check my statement and quickly see exactly how much money I spent, since the only charges on my card are from my time away. And since I pay for almost everything with a credit card, keeping track on this should be easy, as I won’t have too many cash purchases to account for.

Set a Reasonable Spending Limit

Nobody wants to be a tightwad on vacation, myself included. You’re there to enjoy yourself. You’ve set money aside specifically for a trip, and you want to spend it. But that doesn’t mean you have to go crazy. I might want to play some roulette while in Vegas, or bet on a couple of basketball games, but I can still do those things while also being somewhat responsible — maybe I’ll set a limit of $100 for money I’m willing to lose on gambling. So if I end up hitting that amount, then that’s it — no more gambling for the rest of the trip. The same idea can apply to other things as well. For example, for our dinner reservations, I know it’s going to be an expensive meal — but that doesn’t mean I need to order a $100 bottle of wine. You just have to strike that balance.

Bottom Line: I like to enjoy myself when I go away, knowing that I’ve worked hard to save the money to pay for my trip. And by following the steps above, I can still have fun and “splurge” a little, while also maintaining some semblance of responsibility, even in a city that’s not exactly known for its financial restraint.

Mike is the author behind Personal Finance Beat, a blog that covers and links to a host of personal finance and money management topics. You can follow him on Twitter at @PFBeat.

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