If you're truly broke, you shouldn't be going on vacation at all. If you're on a budget, however, there are many things you can do to save money and still enjoy a wonderful break. The key is on the planning.
Start by determining how much money you have to spend. Do you have something set aside for the trip or will you have to deep into your savings? If it's the second, would you be able to recoup the money or will this cause a permanent setback?
Now, let's assume you did the math and you came up with a reasonable amount. If you spend it wisely, every penny will go far.
Transportation
Don't discard airfare right away. Last-minute deals (which sometimes can be booked up to a week in advance, leaving you with plenty of time to plan everything else), internet discount sites, and even a travel agency can sometimes get you incredible discounts.
If airfare is out of the question and you're traveling alone, buses are an option. Large companies sometimes offer great deals. Greyhound, for example, offers the Go-Anywhere-For $12 (or $15 or $20, depending on the time of the year) deal. It's not really anywhere, but you do have a lot of options if you're based on a large city. From New York, for example, you can reach Boston, Baltimore, Silver Spring, Philadelphia, or Washington DC for less than $20. Similar deals are in place for the west coast.
If you have kids or are traveling with a group, a car is usually the best alternative. You are limited by distances, but in theory, you could at least reach the neighboring states in a few hours. Even if you don't own a car, renting can still be budget-friendly. Many companies offer large discounts when you rent a car for a week, and some will even throw in some extras, such as a discount card for gas or coupon meals. Or rent a RV, with costs considerably more but will save you money on hotels and food.
If all else fails, think about places closer to home. Check the Internet for less-known destinations in neighboring counties.
Sleep
Accommodations take almost half the budget of any vacation. Hotels are the obvious choice, but most of the time, they are overpriced.
Swap homes - Home exchange has been around since the 1950's. Want to visit San Francisco? For a small annual fee, home exchange clubs such as ExchangeHomes will put you in touch with members living there that want to visit your city. You fly to San Francisco and stay in their home, while they fly to wherever you live and stay in your home. No money ever exchanges hands. Risky? Not necessarily. People have been doing it for years with mostly positive results. If you're hesitant, you may go with clubs that offer customer assessment and choose somebody who has positive reviews from other members.
Swap homes with their owners included - Imagine staying at a stranger's house while he's there. Hospitality clubs connect home owners willing to open their doors to strangers with the strangers looking for a place to stay. This is not a great idea if you have kids or if you need privacy (after all, you are expected to socialize with these people), but otherwise it could be a very interesting way to explore the local culture, especially if you are vacationing far away from home.
Stay in a monastery - Many are open to visitors for a minimal fee or even a free-will offering. Most offer simple meals and the opportunity to participate in daily prayer or meditation. If you're looking for a place to relax and connect with yourself, monasteries, abbeys, and convents can be a fascinating option. Again, this will not work if you have kids.
Rent a "holiday" apartment – Available by the night or by the week, they are a cost-effective alternative to hotels, and have the additional advantage of allowing you to cook your own meals, a great money saver.
Sleep under the stars – Camping is not the untamed experience it used to be. Campgrounds offer all type of conveniences, from showers to electrical connections and Laundromats. Modern camping equipment will keep you warm and comfortable. Some campgrounds even rent tents and rustic cabins.
Food
About 30 percent of your total vacation budget will be spent on food, estimates an internet travel survey. You can reduce that number considerably by avoiding restaurants as much as possible.
Renting a place with a kitchenette will allow you to shop at the local supermarket and cook your own meals. Camping also saves you money, since you have to bring everything with you and have little change to be tempted by convenience food.
If you're staying at a hotel, you can still skip restaurants and find a rather inexpensive local diner. Even on popular tourist destinations, diners usually do not hack up the prices as much as restaurants do.
When looking for a restaurant, get out of the main avenues. Explore little side streets and ethnic places such as Chinese, Korean, or Mexican eateries.
If you have children, look for restaurants that offer free or reduced-price children's meals. Some of these meals are large enough for adults also.
Pack your own snacks. Bring granola bars, buy fresh fruit from a local shop, and carry your own bottled water.
Make sure your hotel offers free breakfasts, which can otherwise add up to a lot if you have a large family. If you're traveling alone or with a partner (but no children), consider a bed and breakfast. They usually offer free breakfasts plus tea and coffee on request throughout the day.
Entertainment
Look for places that offer free or discounted entrance for children. AAA will also get you lots of discounts around the country, so it may be worth the hassle to get a membership.
Walk a lot. Explore the neighborhood, go hiking, have a picnic. Avoid cramming your day --Visit one paid attraction and then take a few hours off to relax and enjoy your surroundings.
If you're traveling to a popular destination, book park and museum tickets in advance. A lot of places offer discounts when you buy online. Also look for online coupons that can be printed and used to get a discount at the door.
Other Tips
Be flexible. Layover flights are usually cheaper; so are flights that leave at inconvenient times, such as late night or during weekdays.Flights that requireSaturday night stays are also more affordable. Try to plan around these restrictions.
Travel in the off season. You could save up to 30 percent by taking a cruise to the Caribbean in summer instead of waiting until December, when most people are booking cruises to escape winter.
Beware of souvenirs; they can eat into your budget considerably. If you can't resist bringing a memento home, go with something small that you can actually put to use, such as a keying or a photo frame. T-shirts and other big items are usually ridiculously expensive and once the novelty wears off, they'll probably end up in the back of a drawer.
Bargain if you can. Many places will give you a discount if you ask.