Having a stay instead of a typical vacation can save you a lot of money.
You don’t have to pay for a flight, rental car, or accommodation. No need to buy souvenirs and can easily bypass all typical tourist traps that encourage visitors to spend extra cash.
But depending on what you do during your stay, you can end up spending a lot more than you would normally do in a typical week or weekend.
While it’s easy to quickly put together plans for a great stay, if you don’t prepare financially, it can result in charging a credit card or drawing money from your emergency savings.
That is why it is important to plan a budget for a stay.
How do I budget for a stay?
Budgeting for a stay is similar to budgeting for a vacation or other savings goal.
First of all, you want to think about your expenses. What are you planning to do during your stay?
A stay can be as cheap or as expensive as you make it to be. Are you staying home or planning a room at a nearby boutique hotel to change the scenery?
Are you going to cook your own meals or do you think about eating out most of the time?
Do you have activities at home to do, or are you spending money on tickets to a nearby amusement park or a trip to the spa?
Make a list of all the expenses that you can expect. Don’t forget about minor costs like tipping your server when you go out to eat or paying parking fees when you spend the day downtown.
Sum up your expenses and compare them to what you’ve already budgeted for discretionary expenses like dining out or entertainment. If your estimated costs are below the planned amount, you can enjoy your stay.
If your subsistence expenses are higher, you will have to save for the additional costs over time. Take your total and divide the cost over several weeks, setting aside money for your stay each week. This is known as setting up a sinking fund.
Alternatively, you can double-check your residency plans and see where you can cut costs so that you don’t take as long to save.
When creating your budget for your stay, it’s a good idea to include a small expense cushion to cover any upcoming last-minute expenses – like indulging in a dessert or taking a spontaneous day trip to a nearby town.
Having extra wiggle room on your residency budget gives you the freedom to enjoy yourself without having to worry about money.
Nicole Dow is a senior writer at The Penny Hoarder.