How to budget and split expenses on a group vacation (2024)

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As the weather warms up, it's the perfect time for group travel plans to take shape. And while coordinating a family vacation or getaway with friends should be fun, the question of who pays for what can add stress to what should be a good time.

CNBC Select gives you some tips below on how to plan your budget and split your expenses when traveling with a group. That way, you can avoid unnecessary financial strain and focus on enjoying your travels.

Establishing clear communication with everyone in the group about the trip's details goes a long way toward avoiding arguments when you're out and about. Whether in person or through email or text, have a candid conversation as a group about the following:

• What are the main transportation expenses for the trip?
• How much will accommodations cost?
• What group activities or experiences does each person prioritize? Are there any in particular that some group members are willing to pay more for, while others are not as interested in?
• How will expenses be tracked and paid for during the trip (cash, credit cards, payment apps)?

Once everyone in your group agrees with the trip details, it should be fairly simple to start calculating the cost of everything (i.e., flights, accommodations, group activities, etc.). This way, you can start creating a realistic budget for the group's shared expenses. If some group members don't feel comfortable with the cost of the trip, everyone can take some time to reassess the budget and see if there are any compromises that can be made to lower some costs.

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Once you've agreed on a budget, your group can start to think about how these expenses can be split. Here are some recommended ways to approach this.

Dividing everything evenly vs. pay as you go

The simplest method is to split all expenses evenly among the group members. Although this approach requires the least amount of thought, it may not work well if members' personal budgets or activity preferences are wildly different from each other. For example, if you have a friend who insists on flying first class while the rest are happy in economy, then dividing airfare up evenly isn't fair for most of the group.

Again, this is where clear communication and compromises can help smooth things over. Determine as a group which of the trip's expenses can be split evenly for simplicity's sake, and which ones require a "pay as you go" method where each person shoulders the individual cost of their ticket, meal, etc. You can also adopt a "round robin" approach where each person takes turns covering the cost of one group activity during the trip. The important thing is for everyone to feel heard and to agree on the spending plan.

Assigning people a spending category

The group can also divide expenses by spending category. It requires more planning and coordination but can potentially reduce the overall cost of the trip.

While traveling, individuals may have credit cards that offer more bonus points for different categories. For instance, one person's card could earn more reward points for hotel bookings, while someone else's card earns more for dining out. By assigning each category of expenses to the respective credit card that offers the most points for that, the group can maximize the total rewards earned.

TheCapital One Venture Rewards Credit Card, for instance, offerssome of the highest rewards for booking hotel stays: cardholders can earn 5X miles on hotels (as well as rental cars) through Capital One Travel. TheBlue Cash Preferred® Card from American Express, on the other hand, lets you earn up to 6% cash back* at U.S. supermarkets on up to $6,000 per year in purchases (then 1%) thereafter and 3% cash back* at U.S. gas stations, making it a great fit for group road trips or for Airbnb stays where you plan to cook most of your meals. Terms apply.

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No matter how you decide to split expenses, using an app can simplify the process. Popular apps for sending and requesting money from others include Venmo and Zelle.

Venmo is a digital payment platform that lets you send money to your friends, provided you've connected a bank account to the platform. Another app called Splitwise lets you easily log individual expenses and keep track of who owes whom for the entire trip. It also integrates with Venmo, so when it comes time to settle up you can easily get the money to where it belongs.

If you want to avoid using a third-party app to send money to friends, opt for Zelle since you can sign up for it straight from most mobile banking apps and send money without having to open a different app.

App-based splitting can be especially helpful for complex trips where there are a lot of different costs and many people involved. But if you stick to a traditional paper-and-pencil or spreadsheet approach, you should designate one or two group members to monitor expenses and coordinate payments at the end of the trip.

There are many ways to make a group trip more enjoyable for everyone. To ensure a stress-free trip, think through money matters ahead of time, establish a realistic budget, and agree on a strategy to split expenses.

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