Vacation Like a Boss (On a Budget)

Whether there’s snow on the ground or school’s out for the summer, there always seem to be signs pointing you towards your next trip. While it would be great just to pick up and fly off to an exotic place and forget about all of your worries back home unless you have a surplus of money sitting somewhere, you have to do what most people do: plan, save, and budget for your trip. When channeling your inner jet-setter, there are some things you need to do before you can hop on a plane, get to your vacation spot, and enjoy yourself. Let’s explore strategies, tips, and tricks to help you, and also highlight the common mistakes to avoid so you can vacation like a boss without breaking the bank.

Saving and Budgeting for your Vacation

Before embarking on your vacation, it’s important to get organized from a financial standpoint. You can do this through basic savings strategies you would use for any other goals: (1) create a budget for your current expenses and future trip and (2) determine how much you’ll need to save for the trip, how much you can manage to save each month and automate those savings into a separate account. When you begin saving for your excursion, you should have a timeline in mind and determine whether it will be a short-, mid- or long-term saving plan. Are you planning a trip in a month? 6 months or next year? Once you have that figured out, then you need to choose a savings vehicle meant for vacation funds and vacation funds only.

Tip #1: The “bigger” the trip, the larger the savings time period.

How Can I Vacation on a Budget? 

To properly budget for your trip and keep from becoming overwhelmed, you need to break down the different costs of the trip. You can do this by doing a thorough research and asking yourself simple questions about your trip. You want to think about things such as:

• “How do I plan to get around during my vacation? Will I use the public transit system, a rideshare (like Uber), or rent a car?”
• “Will accommodations include local taxes, resort fees, and gratuity? What about excursions or other activities?”
• “Is my priority to eat at 4-star restaurants or hit local hole-in-wall spots?”
• “Am I going to be shopping a lot?”
• “What is the exchange rate where I’m traveling? Is the cost of living higher or lower than what I’m used to?”

Those are just a few examples, but it’s extremely important to cover all of your bases so you’re not caught off guard. Little things can add up (especially if you’re using credit cards and can’t pay off the balance when you return from your trip), so try your best to consider all costs and unforeseen circumstances before you finalize how much you need to be saving. 

Tip #2: Ask yourself the right questions.

Automating Savings

Setting up a savings account to receive automatic pre-determined transfers takes the guesswork out of saving for a goal like vacation planning. Most people have easy access to this type of account through their bank or credit union, which safely houses your money and allows it to grow at a low-interest rate. You can even open multiple savings accounts dedicated to specific goals. For instance, the CapitalOne 360 Savings Account allows you to name each of your savings accounts so you can organize and keep up with your goals more efficiently. These types of accounts allow you to direct a specified amount of money you can access easily for unplanned purchases and emergencies. If it is challenging for you to “not touch” your savings, we would recommend opening your new savings account through a bank not linked to your checking account so as not to be tempted to spend hard-earned savings meant for travel.

Travel Rewards Credit Cards: Friend or Foe?

Credit cards can be a great tool when it comes to travel hacks – but only when used correctly. They work in the same manner as a traditional credit card, and in return, you will accumulate points or cashback, which can be used for travel rewards like:

• Booking hotel rooms and rental cars
• Access to exclusive airport lounges and free flights 
  
• Cashback on expenses like gas and dining
• No annual fees (depending on the credit card provider)
  

Taking advantage of these benefits can help fund your trip and save money since traditional credit cards usually don’t come with any additional perks. To help you get started, we’ve rounded up the top three best travel credit cards of the year courtesy of NerdWallet.

Tip #3: Make sure your travel credit card works for you and not the other way around.  

Caution: Watch Out for Pitfalls

Credit cards can be a lifesaver when it comes to saving on travel; however, if you misuse them, they can have a negative effect and detract from all the work you did to save and budget for your trip. You have to remember to hold yourself accountable when using this piece of plastic or you can go overboard with purchases, rack up interest payments, and have difficulty paying down your balance, therefore negating any benefits you would have been receiving from using the cards in the first place. To avoid those pitfalls when swiping your card, here are some action steps that will help you:

• Go over your monthly statements so you can keep track of all of your purchases.
• Ideally, you will pay your card off in full every month, but if for some reason you can’t, keep your credit card utilization under 30%. For example, if your credit limit is $10,000, try not to carry a balance of more than $3,000.
• Make sure you use your card with credible and reliable merchants and vendors.
• When embarking on international travel, do your research on the foreign fees associated with the destination and integrate these into your initial budget. 

Travel Hacks and Tips

You’re already saving and budgeting, but who doesn’t want to find more ways to save a couple more dollars? There are some basic guidelines to keep in mind to avoid making your vacation more expensive than it needs to be. Here are some basic questions to ask yourself before the planning begins:

1. Do you choose your destination based on when you plan on traveling?

Certain months, weeks, and days of the year can be cheaper than others, and it varies on the location. For example, if you want to go to Cancun during Spring Break expect to spend a pretty penny since that is a popular place during that time of year. However, if you decide to go in the Fall or Summer, the flight, hotel, and even entertainment and dining may drop dramatically in costs.

 2. Do you tend to book everything last minute?

Sometimes things slip through the cracks and we forget, it’s a part of human nature. However, that’s not an “oops” you want to do when planning your trip. Last-minute booking can have you paying far more than you originally planned, or even worse canceling your trip altogether. Avoid this mistake by organizing your research, scheduling, and planning reminders for yourself. On the other hand, sometimes a spontaneous, last-minute trip can create savings…

3. Are you flexible when it comes to your plans?

Detailed and firm planning is important, but flexibility can be even more so because it can give you access to more discounts and price cuts. Simple changes like switching the date of your flight, or extending your hotel stay might be what you need to keep your trip on a budget. Being flexible may go against those of you who are type A personalities, but if you remember the benefits of point number two, you can get more bang for your buck. Also, don’t forget the art of negotiation, it’s easier to go the digital route, but sometimes talking to a real person can help more than any automation tool.

In addition to these habits, check out some of these free sites and resources that find you deals to help make the most of your travel budget:

• Secret Flying: This site can save you up to 80% in-flight deals and hotel deals. They pride themselves in finding “the deals nobody else knows about.” Also, check out their blog, which helps you stay informed on the latest travel news. 

• The Flight Deal: Flight Deal, as the name would suggest, finds impressive flight deals, but it also provides deals for your hotel stay and car rental. They also provide articles discussing credit card deals, mile discounts, and their “Practical Travel Tips” on various destinations and general flying tips.

• Hopper: Hopper is an app that books flights from your phone and finds the best times to buy tickets. This app is available for Apple and Android. 

• Rome2Rio: Rome2Rio is a platform that works to find the best and economical way to travel from point A to point B. Also, it also matches you with “best price guarantee” accommodations and car rentals, as well as the local attractions.

• Skiplagged: This site uses various travel methods to get you to your destination and back, which are efficiently and logistically priced. When you search for your flight, they also pair you with a hotel and show you chronologically, how the prices fluctuate depending on the departure and return date. If you like to travel while on the go, you can use their app available for Apple and Android systems.

• Groupon/LivingSocial/Yelp: These widely known sites work with vendors and consumers who want to provide greatly reduced deals or “coupons” and authentic reviews. These reviews and deals vary from food & drinks to getaways to entertainment and assist in helping you get more out of your trip for a lower price. These deals exist in cities everywhere so no matter where you’re going, you can use these tools to help you. Just be careful: Most deals are only eligible during certain dates and may require reservations as well. 

• Airbnb/HomeAway: These short-term rental sites have become increasingly popular over the past few years, and with good reason. Airbnb and HomeAway each pair you with homeowners who are renting out their homes all across the world. They typically can be cheaper than hotels and also allow you the benefit of being able to cook some meals at home so you aren’t forced to eat out for every meal. Just be sure to check the reviews before booking and make sure your host is reputable. 

• Hostelworld: Hostelworld connects travelers with hostels reviewed worldwide. While hostels may not be lavish and posh, they definitely provide the essentials and are incredibly affordable. These days, most hostels aren’t the grungy and scary last resort, but someplace where you can have an incredible vacation while making new friends. Many hostels even over free activities or excursions at a lower group rate!

Vacation planning can be stressful and costly, but it doesn’t have to be. With this basic set of tools, you are equipped to keep vacation planning fun and exciting. Creating the ideal vacation on a budget is not an easy task, but if you remember to do the following actions: save, budget, research, and organize then you won’t go wrong. So, ready to vacation like a boss?