It’s summer! And that means you’re probably picturing yourself with a cool drink and your toes in the sand, taking those hard-earned vacation days. While we usually feel carefree on vacation, there is still the matter of remaining financially responsible. It’s important to stay on track with future goals, like retirement or sending your kids to college, while also having fun and enjoying vacations in the present. Here are some financial tips to help you maximize your travel budget and manage your finances effectively while on the move.
1. Assess Your Spending Goals
One of the most important steps in preparing for travel is assessing your budget. Think about what you’re comfortable spending for transportation, accommodations, meals, and excursions vs. your ideal plans for the vacation. Be sure to factor in potential fluctuations in currency exchange rates if you’re traveling internationally. And don’t forget to budget renewing your passport at least 9 months before you travel! Travel costs can add up quickly, so assessing your spending goals and staying on top of your budget can help prevent overspending.
2. Avoid Foreign Transaction Fees
Foreign transaction fees can add up quickly when you’re traveling internationally. These fees, often around 3% of each transaction, are charged by credit card companies for purchases made in foreign currencies. To avoid these extra costs, use credit cards that do not charge foreign transaction fees. For example, our partner, Charles Schwab, does not charge foreign transaction fees to debit card holders for purchases or ATM withdrawals.
And be sure to always carry some local currency, just in case. For example, in some European countries it’s not uncommon to need €0.5 or €1 to use public restrooms.
3. Leverage Travel Rewards and Points
Maximizing travel rewards and points is a great way to reduce travel costs. Many credit card companies offer travel-specific rewards cards that provide points or airline miles for purchases. These points can be redeemed for flights, hotel stays, and other travel-related expenses.
Before you choose a travel rewards card, compare the benefits of different cards. Look for those with no foreign transaction fees, significant sign-up bonuses, and ongoing rewards that match your spending habits. And remember to use your credit card responsibly – ensure you can pay off the balance each month to avoid incurring interest.
4. Save on Accommodations and Transportation
Accommodations and transportation are often the most significant expenses in travel. To save on these, consider booking a vacation rental through a company like VRBO or Airbnb. Rentals often provide affordable rates and more unique experiences. If you’re considering a hotel, check with the hotel directly before booking through a third-party site. Oftentimes they can provide a better rate and, if you need to make changes to your reservation, you’re not at the mercy of a third party.
For transportation, look for train passes or even consider car rentals for road trips. If thinking about using a budget airline, seriously explore their reliability for the type of trip you are planning. Booking in advance can also lead to savings.
5. Consider Using a Travel Advisor
Using a travel advisor offers several benefits, including expertise, time savings, and access to exclusive deals. Travel advisors can provide personalized recommendations, handle logistical details, and secure perks such as room upgrades and special packages. They can also offer support in addressing unexpected issues like flight cancellations or lost luggage. Additionally, they can create customized itineraries that align with your specific interests and needs, ensuring a seamless and enriched travel experience.
However, there are some drawbacks to consider. Travel advisors often charge service fees, which can add to your trip’s overall cost. You might also have less control over the planning process and potentially face limited options due to working with the advisor’s preferred partners. Furthermore, their suggestions might not always align with your budget goals and finding a reputable advisor who understands your preferences can take time. Weighing these pros and cons will help you decide if using a travel advisor is the right choice for your next vacation.
6. Stay Insured
Travel insurance is an essential component of your travel budget. It can help protect you against unforeseen events such as medical emergencies, trip cancellations, and lost luggage. Investing in comprehensive travel insurance can help prevent significant financial losses. Marshall CFP® professionals often work with clients to help them find the right travel insurance for their needs.
7. Keep Your Data Safe
Avoid using public Wi-Fi for financial transactions while traveling. Public networks are often unsecured and can expose your sensitive information to hackers. You’re better off using your phone’s cellular network than public Wi-Fi.; however, for a safer option, consider a virtual private network (VPN) when handling financial transactions on your mobile device.
By following these financial tips, you can enjoy your travels without worrying about finances. Proper planning, responsible spending, and leveraging rewards will help you make the most of your adventures while maintaining a healthy financial standing. Safe travels!
