Friday, June 7th, 2019
Taking a trip is a great way to get away from the hustle of everyday life, and refresh your mind and your body. What isn't quite as refreshing is the credit card bill that rolls in once you return.
To keep your finances in check when you're planning a trip, there are things you can plan ahead, and parts you can leave out until you're there, adding a little spontaneity without going over budget.
Choosing when to book your flights can be a huge cost saver according to this airfare study: "The price of a flight changes on average every 4.5 days, and each change averages $33 up or down." The same study explains that the "prime booking window" to get the lowest price is 3 weeks to 3.5 months in advance of your trip. If you're unable to book within that window of time, a great money-saving tool is the Google Flights tracker. Google will send you notifications on whether the date and destination you're looking at is going up or down in price.
When it comes to accommodations, there are many options for travellers. If you're looking at staying in a hotel, prices typically go up if you're booking from Monday to Wednesday, but go down as it gets closer to the weekend.
If you're more interested in booking an Airbnb, I recently learned that you can get a custom price for your stay from the host of the property, especially if you're looking to stay at the property for an extended period of time.
Recently, a friend of mine decided to do a scuba diving course while she was on vacation. She booked the course through her hotel the day before she was set to start. This significantly ate into her budget, because the hotel was charging a premium rate.
After doing some research, she realized that if she had booked the course online ahead of time, she could have saved 10%. If you know what kind of activities you want to do on your trip, it's worth checking to see whether booking something ahead of time will save you money.
I find that if I don't create a budget for a trip, I tend to overspend.
To avoid this, I spend time researching my destination to figure out the average costs. Some things you may want to consider for your own budget are food, transportation, accommodation and activities.
When thinking about food costs, consider whether you're going to cook some of your meals or you're planning to always eat out. When researching transportation, it helps to know the cost of public buses, trains, taxis and ride-shares ahead of time.
I also have a personal "other" category as a catch-all: anything from a missed flight to souvenirs. Decide how much you think you need to set aside and have some wiggle room in your budget. Having a daily, weekly or monthly budget for your trip will be invaluable to keep you in control of your finances.
Trips are supposed to be about fun and exploring, so by over-planning you might miss out on something special.
Some of the best days I've had while travelling are the ones that just happened unexpectedly. Maybe you meet a like-minded traveler who suggests a great free hike, or recommends a walking trail you can't miss.
If you create an airtight itinerary for each day of your trip, you might not have any time for something more spontaneous. From a financial perspective, if you overbook, you might miss a train or event because you didn't give yourself enough time to travel, and that's money going down the drain. Book a few things you really want to do, but leave some free time as well to explore.
Most of all, do what feels right for you, because a trip is supposed to be about creating memories you'll never forget.
This article is provided for information purposes only. It isn’t meant to be relied upon as financial, tax or investment advice, makes no guarantees about future financial conditions or performance, and shouldn’t be considered a recommendation to buy or sell investments or financial products....Information contained in this article, including information related to interest rates, market conditions, tax rules, and other investment factors is subject to change without notice, and Tangerine Bank isn’t responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication, and Tangerine Bank doesn’t guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.