Penny-Pincher Vacations

Are high gas prices and the economic downturn putting a damper on your summer travel plans?

We polled readers on Kiplinger.com, and more than half of you said the current situation has forced you to change plans -- with a full third of you saying you'll have to stay home altogether.

Costs may be up and money may be tight, but you don't have to spend a lot to get away. Below, we list five smart tips to travel on a budget this season and still have a great time.

Five money-saving tips

1. Vacation close to home. The average domestic airfare reached $331 at the end of 2007, according to the U.S. Department of Transportation. That's the highest pricing in six years. Yes, gas prices for your car are at record highs, too. But if you choose a destination within short driving distance, you can save a lot of money -- especially if you're traveling with other people.

For example, we searched Kayak.com for two round-trip tickets from Houston to New Orleans in mid-June. The cheapest price we found was $169 -- or $338 for two people. Drive the 700 mile round-trip journey instead, getting 25 miles per gallon and spending $3.50 per gallon, and you'd spend only $98 to get there and back. That's a savings of $240 (plus, you won't have to spring for a rental car).

Staying super close to home could save you money on transportation and help you forgo lodging expenses. Seek out day-trip possibilities and return home to the comfort of your own bed each night. Or play tourist in your home town. Grab a guide book for your city, bring your camera and go explore those sites that you never seem to have time for, even though they're practically in your backyard.

2. Seek inexpensive lodging. Where you stay has a huge impact on your vacation budget. Use Kayak.com to search for the lowest hotel prices on the Web. Or consider these budget-friendly alternatives:

• Hostels. Hostels are a poor traveler's best friend. Most are safe, clean and in spectacular locations, whether right in the middle of the action in big cities or tucked away as quiet retreats in the mountains or by the ocean. Dorm-style rooms typically cost $15 to $35 a night depending on the locale. (They usually allow drop-ins, or you can make a reservation at Hostels.com.) Plus, they aren't just for solo travelers. Several offer private rooms for couples and families at a higher price that's still less than the rate at nearby hotels. Most hostels come with communal laundries and kitchens, and some even offer high-speed Internet access, game rooms, TV rooms, hot tubs and organized activities for kids.
• College dorm rooms. Some small colleges rent out their dorm rooms during the summer. Sure, you'll probably have to share a bathroom, but you can often stay in hot locales at incredible discounts. For example, the Hawaiian Mission Academy in Honolulu offers up rooms for just $55 a night. The University College London dorm rates start at $52 a night. Call the schools in your destination and ask.
• Campgrounds. From beaches to mountain tops, you can find a campsite nearly anywhere. And the price is right -- usually about $5 to about $25 a night, depending on the location. If money is particularly tight, borrow camping gear from a friend or family member, or simply convert the back of your SUV into a bed. Some parks also have primitive cabins with beds if you want to rough it without getting too rough. Bare-boned log cabins or canvas tents that'll sleep your whole family run $35 to $75 a night.
• Trade spaces. It's tough to beat a free place to stay. Hospitality exchange Web sites are growing in popularity. You can network to trade homes with someone who wants to visit your town, or even take turns hosting each other. Some popular sites that specialize in connecting members with free places to stay include CouchSurfing.com, HomeExchange.com, IntervacUS.com and HospitalityClub.com.

3. Hold down food costs. You'll save a lot of money if you can cook your own meals (or, at least, most of them). That way, you can work your food costs into your regular weekly grocery budget. And the same goes for dining out. For example, if you usually eat out twice a week, save up those meals for when you're on vacation.

You can cook your own meals at a campsite. And most hostels have communal kitchens. But even if you're staying in a budget motel, try to get one with a refrigerator and a microwave in-room. You can store milk for your cold cereal in the morning and sandwich meats and drinks for lunch, and you can warm up pre-made entrées from the local grocery store for dinner. If you're feeding a crowd, bring your crockpot and a few cans of food, like chili or beef stew, and have it cooking while you're out sightseeing.

4. Choose destinations with cheap entertainment. It doesn't matter what a good deal you get on transportation or lodging if you're going to blow your budget when you get there. For example, hotel rooms in Orlando, Fla., are incredibly cheap (we found about a dozen in the $30 to $40 range in June). But tickets to the attractions are incredibly pricey. Universal Studios: $70; Disney World: $71; Sea World: $68. Yikes.

Stick to locations off the beaten path, or that offer plenty of free or inexpensive things to do. Nearly all the main attractions are free in Washington, D.C., for example, including the Smithsonian museums, monuments and the Capitol building tour. And you can't beat Mother Nature. National parks, forests and state parks are close to home and provide miles of hiking trails, beautiful vistas, biking trails, fishing holes and rafting runs for nothing -- or next-to-nothing.

5. Time your trip right. Because the kids are out of school, summer is considered peak season at most destinations, especially in the U.S. But traveling to winter havens can save you some cash. This is a prime time to relax at a ski resort or in parts of Florida. If you want to head out of the country, the Caribbean and Mexican Riviera are on sale this time of year.

Plus, try to plan your visit on weekdays to avoid paying higher weekend lodging rates.