Last year, Americans spent $101.1 billion on vacations — that’s 12.5 percent more than what they spent in 2016. According to the Vacation Confidence Index, this is the first time travel spending has exceeded $100 billion in eight years. Experts anticipate this upward trend will continue this year, suggesting the country’s preparing to drop a historic amount on their summer holidays.
While Generation Xers typically spend the most on their vacations—averaging $2,628 per person — Millennials spend the least — just $1,373. How much you end up spending on your vacation will depend on how savvy you are when organizing your trip. If you want to travel without compromising your finances, check in with these sensible tips to keep your costs low.
Know your capabilities
Your financial reach is personal. While your friend or neighbour may be able to book a month-long trip to Italy, you may not have the financial freedom to take a similar trip. How you travel will depend on a lot of factors, including the length of time you can book off from work, how many paid vacation days you have, your budget, and your savings.
Before you book your trip, your task is to find the answers to these questions. Speak with your boss to figure out how many days you can take off. Then spend some time reviewing your finances and creating a budget to determine how much you can spend on your trip.
Find extra savings
If your budget reveals you have less money to spend than you first thought, you can use this financial document to scrape together some extra savings. Most people make small purchases throughout the week that can add up, limiting how much they can afford to spend on their vacation. A budget exposes them.
Before you start planning your trip, review your budget to break any bad habits. Some small things that can have a big impact on your vacation include:
- Relying on takeout: Whether you buy coffee every morning or a burrito for every workday lunch, these prepared treats can eat into your paycheck and reduce what you can save. Start bringing coffee from home and making homemade lunches to save big.
- Paying for things late: Though this may be an honest mistake, this habit can add significant late fees to your bills every month. Try a free money management app that notifies you of upcoming bills, so you can avoid these penalties.
- Overusing credit cards: The latest data suggests people unintentionally spend as much as 20 percent more when they’re shopping with credit. Credit cards are like lines of credit and payday advance loans; though they’re strategic financial tools when facing a large purchase or emergency, they aren’t meant for small, unnecessaryitems. Stick with cash whenever you can and see how much you can save.
Be prepared for the unexpected
When you’re dreaming of working on your tan or sightseeing, the last thing you want to think about is an emergency. A vacation is supposed to be your time to unwind and experience something new—not stress over the unknown. However, it’s important to know how you can recover from the worst-case scenario while you’re abroad.
- Get travel insurance: Travel experts recommend taking out travel insurance when leaving the country, as this is the best way to protect yourself from the unknown while abroad. Most packages cover trip cancellations and delays, lost luggage, and medical treatment should you hurt yourself on your trip.
- Protect your finances when you return: You should also research ways you can prepare yourself should an emergency happen when you first return home when your savingsare depleted. It can be difficult to cover an unexpected bill or household repair after you travelled extensively.
A personal loan can help bridge the gap between your responsibilities and your bank account, but they don’t always work fast enough for urgent bills. If you face a time-sensitive repair, like a broken air conditioner in the summer heat, research fast installment loans online. Online lenders usually issue these advance loans on a faster timeline than traditional alternatives, so you don’t have to wait for assistancewhen paying pressing bills.
Find the right destination
Alexandra Talty, a contributor to Forbes, asked a panel of travel experts for their best budget travel destinations. While the average Joe would supply a list of nearby cities or cross-state trips, these professionals offered a list stocked with cities and islands that belie their budget label. With such destinations as Zanzibar, Tanzania, Xian, China, and Montreal, Canada, there’s a place for every travel style — proving that even money-conscious travellers can expect more out of their holiday than a cheap staycation.
A summer vacation should leave you relaxed and refreshed. It shouldn’t leave you stressed out over your finances. Keep money-related anxiety out of your plans this summer by following these simple tips. When you follow a sensible plan for your upcoming trip, you can explore a new part of the world without going broke.