Plan a Dream Honeymoon on a Real Budget

The honeymoon is often the first big financial decision a couple makes together after saying "I do." If you want to create unforgettable memories—and not go into debt—you need a plan. My first suggestion is to start early. We started planning a year in advance and made a list of steps to take:

• Create a savings timeline. Estimate your trip cost and divide it by the months until departure to determine your monthly savings goal. Then build it into your budget.
• Set up a dedicated honeymoon fund. Keep this money separate from other goals like a car or home purchase. To make it easier to fund, treat it like any other monthly bill with automatic transfers from your checking account. Then watch it grow.
• Use points and rewards strategically. We're pretty savvy travelers and try to be cost efficient. Our flights were covered by credit card points. When it came to hotels, we knew where we wanted to stay, so I signed up for the specific hotel credit card. It had a big sign-up bonus, and because we started early, we had time to get all the points. We actually stayed in a villa—complete with a butler and private pool—and most of it was covered by points.
• Pick one signature splurge. Prioritize what's most important to you, then pick and choose where to splurge and where to cut back. For us, spending more on our five-day stay in the villa—a once-in-a-lifetime experience—was more important than paying for an 18-hour business-class flight. It's about choices.
• Build in a buffer for surprise expenses. Excursions, buying souvenirs for friends and family, photos—we were surprised by how quickly it all added up. Be sure to build in a cushion so these costs don't mean carrying a big credit card balance when you get home.

While we were planning our trip, it was important to us to make sure we didn't lose sight of the fact that we also wanted to pay down our student loans and start saving for a home. A disciplined approach helped us make sure our other financial goals didn't take a hit.

Keep these pitfalls in mind before—and during—your honeymoon.

• Underestimating how fast extras can add up. If your honeymoon plans go beyond lounging on the beach, costs can creep up quickly. We booked an activity almost every day. While it was fun, it was also exhausting. Looking back, I would've built in more rest days. Fewer excursions would have saved money and made the trip more relaxing. My advice: Leave room to slow down, or you might come home needing a vacation from your honeymoon.
• Financing the trip on credit. It's easy, it's convenient, but the interest adds up quickly. Even if you think cash wedding gifts will cover a lot of the cost, it's better to plan and save in advance than to be stuck with honeymoon bills long after your memories start to fade. You can then use those gifts for other important financial goals.
• Waiting until the last minute to build up credit card rewards. Credit card rewards can be most valuable for your honeymoon when you earn them months before you travel—so you can actually use them on the trip for flights, hotels, or upgrades.
• Skipping a buffer fund. A buffer fund isn't just for extra luxuries. It's kind of like an emergency fund for unexpected expenses that pop up on your honeymoon. One surprise expense can derail your whole budget.
• Saying yes to every upgrade. It's tempting, but luxury adds up quickly unless you pick and choose. For us, the extra money we spent on staying in a villa was worth every penny we saved by sticking to our budget in other areas.

Looking back, we feel good that we took the time to celebrate our marriage without compromising our other financial goals, like paying off student loans, buying a car, and building up a nest egg for a home purchase. We got to see the places we were dreaming about, but we didn't break the bank to get there. We could be present and enjoy the moment without any buyer's remorse. When we came back home, we had a big celebratory feast with our families and are excited about this new chapter of our lives.