Why are you taking a vacation and what do you hope to achieve?
Cost: The amount of money required to purchase something (a good or a service.)
Value: The usefulness or desirability of a good or service, "what it is worth to me".
Vacations seem be one of the few things folks plan for a cost without much consideration to value.
When you buy a car, you generally don't say, "it just needs to be cheap". Ok, but does it need to run? fit your family? have tires that won't blow?
So, first decide what value you place on your vacation. What's the purpose? Family time? Special activities? wonderful food? Then take that budget, the cost you can afford, and make that work together to make it the value you want.
A quick example using Disney, since it's no surprise Disney has a special place in my heart.
We have a semi average family of 2 adults and 2 small children who want to experience a theme park. In my opinion Disney should be on the top of the list. So let's decide that a Disney experience (value) is worth the price (cost).
Let's use Disneyland where a minimum visit should be three days. Why? With 2 parks and tons of attractions, experiences and events you need at least this long. It's a poor value of your time to be in a frantic mess trying to do too much in too short of a time. You want Park Hopper tickets. The two parks are so very close to each other, it would be aggravating to look across that small esplanade and realize today was not a day you could go there, so it's a good value for a bit higher cost to make that happen.
Where should you stay? You could stay far away and either drive to the park (cost) or take local transit (cost + timing) but have a much less per night cost. Are your children young enough or yourself old enough to maybe want a mid day break and some pool time? For better value, stay closer.
What about those incidentals? Like food and drink? If cost is an issue, feel free to bring in some eats and drinks (in non breakable bottles). If food is part of the value you're looking for plan on some special treats (Dole Whip or Churro anyone?) and some nice meals (Flo's Diner? Blue Bayou?)
For this imaginary Disney trip, your base cost would be around $2,000 for a nice off site property within easy walking distance. If you don't mind staying further out in a more standard type of chain hotel, your cost is closer to $1,700. If staying onsite for the experience of a themed hotel and pool, immersed in the 'magic' 24/7, then you're looking at closer to $3,000.
There is no right of wrong answer. What's important is that you get the best value for cost experience for you. Let me help!