We’re heading out on our family vacation soon, so I thought I’d share some tips I’ve found that work well for this scatter-brained-budget-what-budget-we’re-on-vacation! mama.

I’ve mentioned before (fine, many times) that we’re Dave Ramsey fans.  We totally see the value of paying cash, especially when we’re combining a finite budget with a mood for fun.  Rather than carry around a bag stuffed randomly with bills, here’s the way I came up with last year to manage our cash over the course of a vacation. 

Last summer, after working hard and pinching pennies for 18 months, we finally reached our goal of having a fully-funded emergency fund!

We made the goal-reaching-deposit two months before we had planned to take our summer vacation, so we didn’t have much time to save. After shuffling our monthly budget around, looking for the most economical lodging (reserved on our debit card), and planning our gas costs, we had a whopping 500 dollars left over for spending money. 500 dollars to cover food and activities for our family of five . . . for 11 days!

We knew that in our pre-debt-free life, credit cards always got us into trouble, so we decided that using cash was the only way to go.

I divided the money into 11 envelopes. We put sixty dollars in the first three envelopes, and forty in the other eight. Our plan was to add any money not used on one day to the next day’s envelope.

Before we left, I packed a box of picnic staples purchased with money from our regular grocery budget. These lasted for the majority of the trip, with a few small shopping trips added in for milk, bread and fruit . . . also purchased out of our grocery budget. We made the majority of our breakfasts and lunches from these items, making picnics-in-new-places a big part of our kids’ vacation experience.

So, did the $40 a day budget work? It did!

By doing lots of research on our destinations, I was able to find plenty of low-cost activities. We focused on seeing natural wonders, rather than touristy places. For our evening meals, I found lists of kids-eat-free restaurants, and we were able to eat at great restaurants for a fraction of the cost.

This was a fabulous real-life learning experience for our children. They knew how much money was in the envelopes, and were more than willing to help stretch it. Part of our vacation included a short stay in a pricey resort town. The kids found out that there were exciting (but expensive) activities at the top of the mountain. They decided that we should not spend ANY money on the first day, and happily spent their time swimming and exploring the town, eating all meals in our suite. They wanted to save one day’s money to add it to the next day’s envelope, so they could have enough to enjoy the rock-climbing-wall and bungee-trampoline! They learned that saving allows you to do the things you really want to do!

And what was my favorite part of our envelope-a-day system? I loved knowing that with every new day, we had a new envelope with at least as much money as we had on the other days. On our final day (one that included 17 hours of driving), we were able to stop at a restaurant! For a woman who didn’t think she could choke down one more pb&j, this was BIG!

By using cash on our vacation, we were able to fully enjoy our time together, with no nagging worries about an upcoming credit card statement. Although this summer we’re heading on a big vacation that we’ve saved for all year, I fully plan to use our envelope-a-day system!

I’m linking this up over at Frugal Friday at Life as Mom.