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In my budget, I have a "vacation" category that I track along with other categories (like car lease, dining, recreation, etc). When you are on vacation you obviously do things that could be tracked into existing categories (like Dining, shopping)

I was wondering if anyone breaks these Vacation expenses out into those separate categories in their budget review (such as "dining", "recreation", etc) or do you keep any expense that happen while on vacation into a "Vacation" line item and why?

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    By "break them out into 'dining', 'recreation', etc." do you mean separating out "dining while on vacation" from "recreation while on vacation"? Or are you using the word "vacation" in some other way? – BrenBarn Jun 26 '18 at 4:02
  • What i mean is that if i go out to dinner on vacation should i allocate that to dining in my monthly budget or should i allocate to vacation. – leora Jul 4 '18 at 12:35
  • There's already good answers to this so I won't repeat them. We always treat our vacation expenses as separate from our normal living expenses, and budget both during our vacations. It started as an oversight, but coming home to two weeks "surplus" in the budget allows for some more eating out while you get back into normal life, and makes a great addition to your next vacation budget – pojo-guy Jul 4 '18 at 13:59
  • I agree with the existing answers, that vacation doesn't need to be broken up. I think it's very good that you've even considered breaking out vacation into it's own line item. – Corey P May 2 at 16:41
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I separate entertainment from vacations. Entertainment would be dining out, movies, cable tv, video games, etc, but that category is only for use while not on vacation. Those same items, if they happen on vacation, are part of the vacation budget. I like keeping vacation separate because I like knowing the all-in cost of a vacation for future reference.

We don't dine out much, so rather than having a vacation blow our dining out budget for the month, it makes more sense to make it part of a separate vacation bucket. I also like that it encourages total-cost evaluation when planning a trip, will we be eating 3-meals a day at restaurants in an expensive area? Better factor that in.

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Personally I would include in the vacation budget almost all expenses that are incurred while on vacation. One reason is that I usually eat out a lot more when on vacation than I do when at home, so my normal dining-out budget would not be a realistic estimate of how much I'd spend dining out on vacation. Also, in terms of planning expenses, it's easier to do calculations like "to go on this trip I need to save $5000" or whatever if the budget is "all-inclusive".

You mention "shopping" as a category, but from my perspective that is too general to be a useful category. Shopping for what? Most of the "shopping" that I do while at home is for fairly ordinary things (groceries, tools, cleaning supplies, etc.), and I don't do much shopping of that sort while on vacation. Conversely, if I do shop for things like souvenirs or gifts while on vacation I'd generally categorize that as part of the vacation spending.

If I go on vacation and just happen to find something I wanted to buy anyway, I'd probably track it under its normal category. For instance, if I had been looking for a leather jacket and found a nice one while traveling I'd probably track that under "Clothing". I do this fairly often for things like books, but the amount of spending in these categories is fairly low overall, and even lower on vacation, so it's not super important to track them with exact accuracy. But general "entertainment" while on vacation (e.g., admission fees to museums or tourist attractions) is categorized as "vacation" spending.

It's also worth noting that some budgeting/financial software will let you create subcategories. I use Quicken, where I have a category "Vacation" with subcategories "Vacation:Travel", "Vacation:Food", and "Vacation:Lodging". I find that in practice these three subcategories account for the vast majority of vacation expenses.

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I only track a 'vacation' category (no sub-splitting), and it excludes anything that would have happened at home too, like wining & dining, buying clothing (so no unlimited 'I-was-there-T-shirts'). I'm a bit on the fence with gas, but on a road trip, you obviously use a lot more than at home, so I put it onto 'vacation' too.

Typically, the vacation budget encompasses only flights, hotels, rental cars, entrance fees, and gas. Sometimes visa or immunization cost come up, they are also in it.

Of course, that's everybody's own decision, and every other year I stumble about an expense that seems to be borderline, and I just make up a rule.

The baseline for the decision should be: if you cancel the vacation idea, would this cost be there or not? If it would not be there without the vacation, it's under 'vacation'; if it would be there anyway (even though slightly lower maybe), it's not under 'vacation'.

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I often keep vacations as one regular budget item that includes all expenses incurred on or associated with the vacation.

My reasoning is that during vacations, there are often unexpected expenses that are not often foreseeable (say, an entry fee into a country is sometimes collected). Furthermore, if you are looking at tracking expenditures on vacations, individual expense line items may vary from location to location while the total budget remains roughly uniform over time due to regional variation.

TL;DR: Unexpected expenses and regional price variation dictate that all vacation expenses be aggregated under one budget item.

  • i am not suggesting eliminating the Vacation category, just curious if expenses like dining that you would have other categories for DURING VACATIONS get allocated to dining (in this example) or vacation – leora Jul 4 '18 at 12:37
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    Tried to edit original post for clarity. What I meant is that all expenses associated with a vacation should be budgeted under "Vacations" rather than "dining expenses" – MikMak Jul 8 '18 at 11:36

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