There are plenty of ways to go on vacation and still manage to keep your spending in check when it comes to holiday travel. If you’re worried about overspending while heading out this holiday season, here are five simple ways you can have fun and stay frugal.
1. Pay with cash when you can
A new study shows that those who use cash for holiday travel spend an average of $7.50 less per $100 than those who use credit and debit cards. Having a tight leash on your spending by using cash will go a long way in keeping you from overspending and getting into debt. During travel, those who rely on credit may come home to a staggeringly high credit card bill caused by impulse purchases and currency exchange fees.
That doesn’t mean you should keep your cards at home, though. It’s a good idea to have one widely-accepted credit card with you during your travels for emergencies. Just be sure you can practice good spending habits by defaulting to cash first so that you don’t end up needing things such as debt consolidation loans to get out from under your financial missteps.
2. Set your budget ahead of time
Whether you’re planning to visit an exotic location or simply head home for the holidays, it’s essential to set a budget and stick to it. Your expenses may be minimal if you’re just visiting family, but there are often surprise costs that can add up, such as rental cars, gas, going out to eat, etc. If you’re not sure exactly what you’ll be spending money on during your trip, allot an “umbrella” sum of money that will cover most costs while still providing a ceiling for how much you can spend.
3. Exchange currency before leaving
Currency exchanges at airports and tourist-heavy locations charge hefty fees, so it’s a good idea to switch your currency ahead of time. Many banks and credit unions will offer this service for a lower fee if you’re already a customer. Smaller banks may need a few days to switch your money, so plan to request the exchange at least a week before traveling.
4. Use vacation packages when it makes sense
Vacation packages can afford you a bundle discount on things you plan to spend money on anyway, like hotels, rental cars, flights, and sightseeing. However, these packages are only beneficial if they include things you’ll use or give your trip added protection, such as travel insurance or easier refunds. Don’t let yourself get talked into a vacation bundle that will go unused or could end up costing you more in the long run.
Also, check the fine print on your vacation deal before signing up. Know what will be included (mileage, accommodations, amenities, etc.) and if any parts are non-refundable or have a minimum requirement for how much you’ll need to spend to get the “discount.”
5. Plan your itinerary before arriving
It’s much easier to be frugal with your finances on vacation when you have a plan. Don’t leave it up to chance; create an itinerary of how you’ll spend your time away. Setting an itinerary ahead of time has a positive ripple effect on your finances, time, and travel experience. You can also probably find deals and discounts before leaving that wouldn’t be available once you’re already there.
The bottom line
While holiday travel can get expensive, there are some simple ways to keep it manageable. By being financially disciplined and practicing these simple travel tips, you can enjoy a memorable holiday without going into debt.