I recently found myself sitting around a dinner table in Hawaii with a number of new traveling acquaintances. We met at the place of accommodation we were staying at, and enjoyed each other’s company, sharing travel tales of adventure and misadventure alike. So when “Taco Tuesday” presented itself as a way to get super cheap beers and tacos, we jumped at the opportunity to enjoy a night on the town all together.

Interestingly, Taco Tuesday became a fascinating study in the spending patterns of people on vacation.

John and Wendy, having nipped over to Hawaii for a quick break before embarking on a major move across the country, didn’t have huge money concerns, but were trying to be frugal knowing that their upcoming move would cost them dearly. Dave and Angie were finishing off a trip around the world, having been on the road for eight months already through countries both expensive and inexpensive. They played hard during their trip, but their stash of cash was predictably dwindling (an expected bi-product of good budgeting through their long trip). Julie was a very young headstrong woman figuring out where she belonged in the world, and Wayne was an older gentleman on an extended vacation. Rounding out the group (in addition to myself) was Phil, who was something of a nomad, living and working in Hawaii for a bit before moving on to the next locale that tickled his fancy.

I describe each friend’s background in an effort to paint the picture; one of a group of people, all originally from North America, but bringing an entirely different set of experiences, finances, and travel values to the table.

Where things got interesting was in how people indulged on Taco Tuesday.

John & Wendy decided that cheap beer was more appealing than cheap tacos, and so they engineered their budget for the night to partake of the beer (at $2/bottle), and prepared their own full dinner at the house we were staying in prior to going out. Dave & Angie being well-seasoned travelers chose to fill up on some home-made appetizers prior to going out, and each nursed one beer and a taco or two. Julie simply had Coke (not only was she young, but she was broke and underage), and Wayne (who had gads of money) flew under the radar with one beer and two tacos. And then there’s Phil. Poor Phil.

Phil was definitely out for the party and camaraderie, but didn’t have much money to spare given his lifestyle. This didn’t seem to stop him from indulging though; he managed to order seven tacos, and four beers – not the beers on special though – premium beers.

Phil’s tab ended up being more than everybody else’s tab – combined. No wonder he was broke and working during his trip. He listened to tales of faraway and exotic destinations with drooling enthusiasm – and a bit of melancholy, as he wished he had the ability to travel to these places, but couldn’t scrape together even the airfare if he had to.

Here’s the rub: The amount of money spent on this night was in no way correlated to how much fun each person had. Everybody laughed, shared stories, enjoyed the leisurely walk along the ocean to and from the bar, and came away with great memories. If anybody, Phil seemed the least enthused about the night, spending much of the walk home doing the math about how many hours he would have to work to pay for his tab. At least he had a good buzz on to dull the financial pain.

Despite a range of financial backgrounds and intrinsic values, the people who had the ability to spend a wad of dough that night chose not to. Most people ate something at home prior to going out, so they wouldn’t be starving and end up over-eating at the bar. The tacos were cheap – but they weren’t cheaper than a healthy homemade snack or meal.

So how do you budget on vacation and still have a good time? In short, make your vacation and having fun in general a state of mind, not a set of criteria or a checklist of experiences that must happen.

• You don’t have to eat at all the finest restaurants in order for it to be a special vacation.
• You don’t have to splurge on souvenirs for all your friends and family at home to prove you had a good time.
• You don’t have to spend extra for the helicopter tour just because you’re on vacation and “why not”. The bus tour at a fraction of the cost can be just as much – if not more – fun.
• You DO have to focus on the people. Enjoy the company of others without needing to spend money. Go to the grocery store and buy a bunch of different cheeses, a bottle or two of wine, and sit in the park (assuming you can drink wine in the park). It’s cheap (when you split the cost across the group) and cheerful.
• You DO have to focus on your surroundings. Forget splurging – you’re already on vacation; that’s the splurge! You’re already abroad and seeing, smelling, touching, and listening to foreign and refreshing things. Soak it all in.

If you have a ton of cash and insist on spending luxuriously whilst on vacation because that is what defines a vacation for you, then that is fine. You will (hopefully) be spending within your means and having a good time. Kudos.

But if you don’t have a lot of money, and are even considering canceling this year’s vacation because you aren’t sure you can afford it, maybe this is an opportunity to re-evaluate how you spend your money on vacation. Where can you compromise?

• Would you accept a lower standard of accommodation (maybe you have to walk further to see the sights, or contend with a shared bathroom and kitchen) than you are used to?
• Could you eat more home-cooked meals (provided you stay somewhere with a kitchen) despite the fact that cooking is a chore, in order to enjoy everything else your destination has to offer?
• Is it feasible to drive instead of fly? Maybe even to camp along the way, and even at your destination? (A family I know drove – and camped – all the way to Alaska and back from Alberta. The journey was one that created a lifetime of memories for everybody).
• Will your vacation still be complete if you don’t do all the organized tours available, and instead soak in the culture with long walks and just a few key tours?
• Can you sit at a restaurant or café and enjoy the culture without ordering the expensive lattes or entrees?

Check out this article for a few more ideas on how to enjoy a frugal vacation by making innocuous compromises.

Here is a little exercise for you to define your vacation needs:

Pull out a blank piece of paper and a pen. Now start writing down words that you associate with vacation. Don’t worry about sentences or specific locations or even making sense; just write down words that for you define “vacation”.

Is it “sun, sand, ocean, palm trees, pina coladas” or “foreign languages, art, music, museums”? How about “animal life, markets, nature, new friends”?

What are your vacation words? And how many of these terms that define your vacation directly correlate to spending a lot of money? I would argue that very few people define their vacations with “fancy restaurants, limos, expensive tours, and red carpets” unless they already have the financial capacity to enjoy these things at home.

By defining your vacation desires, and reframing your vacation needs, and being creative where you can, you just may find that you can budget on vacation and not feel like you have sacrificed a thing.

Happy travels!