Can you really afford it?

First, assess honestly whether you can afford the vacation you're thinking about. If you have to borrow most of the money to pay for it, then you probably can't afford it. If you do borrow to pay for your trip, you might find yourself financially strapped later on if the roof starts leaking or one of the kids needs braces. At the very least, you'll inherit the stress that comes with trying to pay off that debt.

Think outside the vacation box

Not being able to take a dream vacation doesn't mean you can't take a vacation at all. Everyone needs time away from their job and normal family responsibilities to recharge. If you simply don't have the budget for the vacation you want, think of other creative ways to spend your time off. Here are some ideas:

• Try a few long weekends instead of one or two consecutive weeks. Perhaps you can afford a couple of nights at a hotel or bed and breakfast instead of all week. Or maybe you can camp for a few nights at a state or national park, where rates are very reasonable.
• Vacation from home. Take day trips into a nearby city and visit museums, restaurants, and other attractions. Or head out to the country for a hike, swim, and picnic. Doing things out of the ordinary, like eating breakfast three times a day or setting up a tent in the living room to play games and sleep in, can be a big hit with kids. Young kids usually just like being with their parents and are mostly happy to go along with what you have planned.
• Let older kids pick an activity. It might not be Disney World®, but what about a trip to an amusement or water park, a day or two at the beach, an afternoon canoeing or fishing, a movie and dinner outing, or a ballgame? Instead of lamenting the fact that you can't take an exotic vacation, focus on what you can do and enjoy the time with your family.
• Consider house swapping. If you're willing to trade houses with other like-minded families to save on room-and-board costs, there are several websites where you can find more information.

Plan now for next year (or the year after)

It's never too early to start thinking about next year, or the year after that. Start saving now for that future getaway by making a budget and seeing where you might be able to squeeze a few dollars. Then consider opening a separate vacation account for those funds; otherwise, the money may get "lost" in your regular savings account and used for other purposes. Where you put your money will depend on your time horizon and other factors. A financial professional can help you examine your options.

If you can contribute monthly to your vacation fund, great. If you can't, consider adding small windfalls like your tax refund, year-end bonus, or cash from birthdays and holidays. Knowing that you're setting aside money for a planned "dream" vacation can go a long way to making you feel less deprived in the years you can only afford to stay close to home.

And when it comes time to actually planning your big vacation, keep cost-cutting tips in mind. For example, you might consider less convenient flights or a night or two at a less fancy hotel.

Forget about the Joneses

It's tempting to want to take grand vacations every year when everyone else seems to be doing so. But don't fall into the trap of thinking that you or your family will somehow be scarred if you can't. The important thing is to relax in a way that you can afford, and then enjoy that time with your family. You will have taught your children an important lesson--how to live a financially sound life, without worrying about what the Joneses are doing.