Narrow your vacation budget by using your transportation costs as an indicator on how much you should spend on your next trip. Transportation costs include anything you’ll need to get to and move around your destination. That includes the cost of plane tickets, rental car fees when you get there, or metro rides. The price of transportation vacation budget rule differs slightly for short and more expensive trips.

  • Domestic Travel and Discount Flights -Your budget for any given day should be half of your original transportation cost (whatever method you used to get there – for example plane tickets).
    • Lets’ say all of your transportation costs to a cheap destination, say Chicago from Detroit for $69 both ways, plus the cost of a cab to the airport are $30, totaling $99. The maximum you budget for a given day should be $49.50.

  • International Vacations and Long Holidays – The total of all of your transportation costs should be the maximum total cost of your entire vacation budget. This may seem a high number since plane tickets plus metro and cabs might total $1,500 for a week in France from the US; but consider the museum entrance fees, dining out, and other costs you probably wouldn’t incur on a shorter or regional vacation.

These tips are focused on the frugal traveler. There are times of course when you travel or vacation to indulge, spend a Christmas bonus, or simply go nuts. For students and frequent travelers who tend to jump the next flight with barely enough money to eat, the POT rule will help you to plan and ultimately save money. Those of you with jobs should save your vacation wisely and live like a local to save money on international travel.

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[photo by: seadipper]