Americans work hard and play hard -- if they're not on vacation, they are planning one.

But the prospect of a long relaxing day in the future does not mean one should relax one's budget. It’s possible to be financially smart and have fun at the same time – and it’s all about planning.

Here are some financial planning tips that work just as well for vacations as they do for the “big stuff” like investments or retirement:

  • Spend time now to save money later.  Get as much information as possible before you travel to your destination.  Do your homework about the weather, geography, food, customs, and currency, particularly if you’ll be traveling abroad. Check out phone and Internet services and their cost.  While this advice may be so obvious as to seem unnecessary, just think back to other vacations where you found you had to make unplanned expenditures – such as extra clothing or medical items – because you were not fully prepared for the conditions you encountered.
  • Dress-rehearse your trip.  I often ask individuals thinking about retirement to spend a day “in their minds” as a retiree and walk through every hour of that day: whom they will see, how they’ll spend time, where they’ll go. If they come up blank during this exercise, I know they are not only not ready for retirement, but also they are likely to do a lot of unplanned spending to fill the gaps. The same applies to vacations. Not knowing what to do and when to do it can get expensive when you are away from home.
  • “Unpack” your options. Everything travel-related comes packaged these days: airline and car, hotel and entertainment, a three-course meal for one fixed price. But a love affair with apparent freebies can cloud good financial sense. If you’re considering a deal that includes something you would otherwise not use or consume, the package probably is not the right choice.
  • Pay close attention when it comes to travel-related insurance. Among the many items offered when you rent a car is coverage for vehicle damage. You may be told that this will cover any liability exposure as a result of a deductible on your own auto policy. And since it doesn’t cost much, why not throw that into the deal? But this may be coverage you already have through a major credit card. The same may be true of a travel insurance policy covering both the costs of cancellation and medical costs incurred during travel. Be sure to check your underlying health insurance to see if you already have any needed medical coverage in place.
  • Plan unconventionally. Smart investors are often contrarians, avoiding the herd instincts of other investors. It also pays to go off the beaten track when traveling.  Avoiding the usual tourist places or traveling off-season often results in significant savings, as well as enriching the travel experience.
  • For family travel, get everyone involved in the planning, even young kids. Spend time talking about where you’ll go and what you’ll see and do. Talk openly about your budget and challenge everyone to find ways to cut costs. Plan a reward or special treat for whomever has the best cost-cutting idea. By engaging everyone ahead of time, you will avoid those moments of indecision and disagreement that inevitably cost extra money to resolve.

There’s no reason to wait until your vacation to have fun. Start planning now and enjoy the anticipation of what’s to come. And here’s the best part: The planning is completely free!