Whether you’re looking to take a quick weekend getaway to the Grand Canyon, splurge on a luxury trip to Greece or take a one-month sabbatical in Japan, knowing how to properly plan and budget is crucial.
Though travel prices are expected to be high in 2018 – research from the GBTA Foundation predicted airfare would increase by 3.5 percent this year, while hotel prices would increase by 3.7 percent – you can plan the perfect budget-friendly trip with these strategies.
From tips on which debit cards have no foreign transaction fees to data on the cheapest days of the week to travel, here’s everything you need to know at every stage of the planning, budgeting and traveling process.
Picking a destination
Look at the average airfare cost where you want to travel. The U.S. Department of Transportation allows you to search major cities across the U.S. to see the average cost of airfare. Looking through these numbers will help you find a destination that won’t leave a hole in your wallet. For example, the average airfare for all cities in the U.S. in the third quarter of 2017 was $335.83. Austin had an average of $331.26, while Chicago had an average of $284.79. If you were deciding between those two cities, selecting Chicago might be a more affordable option (depending on your home base).
Forgo the “EuroTrip”/multi-destination mentality. If you’re planning a big trip, it can be tempting to try to visit several countries, or even a handful of cities within one country. Nora Dunn, an author and blogger, ran her own financial planning practice in Toronto, which she sold in 2006 to travel. She has since been to 55 countries.
Dunn advises shying away from the multi-stop trip mentality – both for your experience, which will be less immersive, and your wallet. “When you’re planning a trip, it’s easy to want to conquer the country and to move around a lot,” she says. “But the more planes, trains and automobiles you’re getting on, the more money you’re inherently going to spend.”
Consider flying to a neighboring country or city and taking a short road trip. If you’re itching to go to Austin, for example, but the fares are too steep, consider flying to Dallas and going on a three-hour road trip. Smaller cities often have pricier airfare, so check the closest major cities to see if there’s a significantly cheaper fare.
Check conversion rates if traveling internationally. Conversion rates fluctuate, and it’s wise to check the current rate in the country you intend to travel to. If it’s high or has been steadily increasing, consider choosing a different destination.
Book your flight at the optimal time. How far ahead to book a flight is heavily debated, but research conducted by CheapAir.com in May 2017 found that for flights in the U.S., it’s anywhere between three weeks and 3 ½ months ahead of time. For international travel, the optimal time to book is typically two to four months before your departure date. The research study looked at 350 million airfares in the U.S. and in 3,000 other cities.
Planning & budgeting
Research in advance. Dunn advises figuring out what everything will cost – from big things like airfare and lodging, to small things like breakfast and souvenirs. “Get an estimate for what you think the trip will cost, and then backtrack,” she says. “Say you want to take that trip in eight months and you need to save X amount of dollars. Backtrack and make sure you have the ability to save that amount of money for your trip.”
Allocate funds into a specific travel account. Andrea Woroch, a personal finance and consumer savings expert, recommends having an automatic savings account for travel. By creating an account that you automatically allocate funds into each month, you can better track your progress and also know exactly how much you’ve saved for your trip.
“You can picture yourself taking that dream vacation when you see the money in that fund growing,” Woroch says. “Plus, when you have it all mixed together, it’s hard to see how much you’re actually putting away toward the vacation, or it’s easy to dip in when other things come up that you need money for.”
Sign up for travel credit cards under one condition: That you pay them off in full each month. Travel credit cards that allow you to accumulate miles can be great, so long as you can afford to meet the sign-up minimums and regularly pay your balances off. “No frequent-flyer mile strategy is a good one if you have to carry a balance on your card in order to do it,” Dunn says. Her secret strategy is having frequent flyer membership in one airline from each major Alliance.
If traveling internationally, use an ATM for exchanges. “No matter how you slice it, you’re going to end up paying to exchange money,” Dunn says. Even though banks charge fees to use ATMs to withdraw cash, you’re less likely to lose money in a scam or pay a commission that’s too high.
Consider a no-fee card. If you’re an avid international traveler, consider using a checking account that doesn’t charge or at least reimburses for ATM fees. Kristin Addis, founder of Be My Travel Muse and a former investment banker, says this is her secret weapon when traveling internationally. “They refund all ATM fees, so they are giving me back around $70 per month when I’m traveling,” Addis says, adding that they also don’t charge any foreign transaction fees. “I never use a money changer because I’m able to do an almost apples-to-apples transaction with them at an ATM.”
Don’t travel from Friday to Friday. The cheapest flights in the U.S. are on Tuesdays, Wednesdays and Saturdays, while the cheapest flights to Europe are typically during the week, according to FareCompare, a fare-comparison website.
Woroch advises avoiding Fridays in particular. “Fridays are busy days for business travelers,” she says. “So prices are always higher because airlines know that business travelers are willing to spend more because it usually goes toward the company. Leisure travel prices go down on Saturdays.”
Enjoying your trip (and not overspending)
Consider using a prepaid debit card. Erica Sandberg, a consumer finance expert, says she loves the advice someone recently gave her to go on a trip with a prepaid debit card you use for all of your transactions. “Almost no money management is necessary,” she says. “You use those funds. It’s a really cool instrument that doesn’t cost much – it’s a couple of bucks – and if it’s stolen or you lose it, you can replace it.”
Be mindful of small expenses, and prepare for them. Woroch advises planning ahead for all of the small expenses that will pop up during your travel. For example, airport parking. She recommends AirportParkingReservations.com, which offers private parking and a shuttle to the airport.
In addition, Addis recommends researching the average cost of a taxi (or public transportation) to your hotel or Airbnb once you land at your destination. “You’re going to get off the flight and be tired, and it’s going to be confusing because it’s not in your currency,” she says. “Something will seem like it’s reasonable price-wise when it’s not.”
Don’t go over on your cell phone data. If you’re abroad, consider downloading key items from your phone, such as maps, ahead of time. Woroch does this to avoid using too much data and paying penalty fees. “You can also download your maps before you leave your hotel if you’re using their free Wi-Fi connection,” she says.
Prepare for any in-country activities. Though spontaneity can be wonderful when traveling, researching what you’d like to do ahead of time will allow you to save a few bucks here and there. Woroch recommends finding free walking tours and paying for any attraction, activity and museum tickets ahead of time, because it’s typically cheaper to pre-purchase them online.
Now that you know all of the best tricks and tips for booking a budget-friendly vacation in 2018, get to planning!
