If you’ve been bitten by the travel bug, you know there’s no cure.
A serious case of wanderlust isn’t a bad thing, as long as you don’t let your travels break the bank.
For a majority of Americans, however, sticking to a vacation budget is easier said than done. According to a 2017 report by LearnVest, 74% of Americans surveyed have gone into debt from a trip, at an average of more than $1,100.
What causes people to go into debt, even when they’ve planned for the traveling expenses? Here are eight common money mistakes people make on vacation — and tips on how to avoid them.
1. Buying food at the airport or on the plane
Airport restaurants know you have few options for buying food once you’ve gone through security. That’s why they’re able to mark up prices as much as they want.
“The markup on airport and airplane food is astronomical,” said Shannon Ullman, the traveler behind the Lives Abroad blog.
Avoid blowing through your food budget for the trip by carrying your own food and drinks.
“Instead of paying double or triple the price, come prepared with snacks,” Ullman said. “Make sandwiches or salads and keep them in a cooler or a lunch bag.”
Chances are, the snacks you bring will be better than anything you’ll find in an airport or on the plane. Ullman also recommends carrying a water bottle.
“Since you can’t bring liquids through security, try bringing an empty, reusable bottle,” Ullman said. “This way, you can fill it up at the water fountains before you get on the plane. Snack packs and reusable water bottles can save you between $20 and $100 dollars on both legs of your trip.”
If you’re craving something more than water, Ullman suggests bringing iced tea or lemonade packets to add to the bottle.
2. Paying extra baggage fees
With airlines increasingly offering budget fares and charging fees for amenities, a checked bag is often an extra expense. But it also might be an unnecessary expense, especially for a short trip.
“Learn to pack light,” said Katelyn Michaud, who runs the travel blog Diaries of a Wandering Lobster.
“Chances are you don’t need three pairs of shoes and five pairs of pants,” Michaud explained. “Pack smart and light and bring carry-on only. Not only does it save you money, but you’ll save time not having to wait for your baggage at baggage claim.”
Adopting a minimalist mindset while packing could save you money on baggage fees. Plus, you’ll never have to worry about the airline losing your luggage.
“Baggage fees are the worst,” Ullman said. “By packing only the essentials and choosing versatile outfits with layers, it’s easy to fit everything in one bag. Don’t pack anything you can buy once you reach your destination.”
3. Splurging on private shuttles
At a tourist-heavy destination, shuttle companies are happy to drive you from the airport to your hotel while charging an arm and a leg.
Instead of taking a private car, consider public transportation. When I traveled recently in Mexico from Cancun to Tulum, for instance, the price for a private shuttle was $100 while a bus cost just $9.
Of course, a shuttle might be worth it if you’re traveling with a group or reaching your destination late at night. But if you feel safe and arrive during the day, public transport will be more affordable.
4. Getting slammed with foreign transaction fees
Another unnecessary expense comes in the form of foreign transaction fees on purchases made by credit card. If you’re shopping during your overseas trip, try to use a credit card with no foreign transaction fees, such as a Chase Sapphire card or Capital One’s VentureOne card. Note that some travel cards have an annual fee, so you’ll need to earn enough travel points to offset the cost.
“Many of the airline and travel credit cards offer no foreign transaction fees as a benefit,” said Michaud. “If you’re American, Charles Schwab offers [a checking account debit card with] no ATM or foreign transaction fees around the world.”
Opening a credit card or bank account with no foreign transaction fees could be a smart money move if you travel abroad frequently.
5. Opting for a pricey hotel over a cheaper option
Your travel accommodations can be as expensive or cheap as you want. If the cost of a hotel is steep, consider cheaper alternatives, such as a room or apartment through Airbnb or a hostel.
Emily Gallagher, the community relations manager for Hostelling International NYC, recommends hostels as a way to save money and meet like-minded travelers.
“Hostels are a great option for the frugal traveler,” Gallagher said. “If a communal room makes you uncomfortable, most hostels also have discounted private rooms available that still give you access to kitchen facilities and other free or low-cost amenities.”
Although hostels might not be a convenient choice for everyone, comparing your options could help you find the type of accommodation that fits your budget.
6. Forgetting to pay your bills at home
Vacation is all about letting go of routines, but you don’t want to forget to pay your bills at home.
Whether it’s your electric bill or paying your student loans, make sure to set up automatic payments in advance so you don’t miss a payment while traveling.
Otherwise, your vacation could cost a lot in late fees or interest. Plus, you don’t want to come home and find that your lights won’t turn on.
When you’re on vacation, it’s easy to want to buy all the things you see. You might push past your spending limits because of the “You only live once” or “When in Rome” sentiment.
But this kind of mentality will get you in trouble, and many of those souvenirs will probably clutter your home.
“Sometimes it is worth it to splurge on something meaningful and a once-in-a-lifetime experience,” said Michaud. “When I was traveling in Southeast Asia, I splurged on a five-day package of trekking with orangutans in Sumatra. It was expensive, but the highlight of my trip.”
Splurging can occasionally be worth it, but you also have to know when to draw the line on spending.
8. Not prioritizing travel goals for your trip
For Jennifer Li, the founder of travel company Map&Move, budgeting doesn’t have to do with the cost of food or baggage fees. Instead, she encourages travelers to think about what they want to get out of their trip, and then to spend their money accordingly.
“When I first started traveling solo, the biggest consideration I had was what I wanted to get out of my experience in the long run,” Li said. “The things that I put money into were interesting experiences and places where I could meet like-minded people and locals. Everything else was negotiable.”
That’s why Li thinks the key financial error people make on vacation is not reflecting on their priorities.
“The biggest money mistake is not considering what you want to get out of your travels and throwing money into things that might not achieve the experience you actually want, like expensive accommodations or going to attractions for the sake of fattening up your Instagram feed,” said Li.
By deciding your travel priorities and setting a budget accordingly, you can avoid spending too much or going into debt on your trip. The less you spend on your current vacation, the more you can save for your next travel adventure!
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.36% APR (with Auto Pay) to 7.82% APR (with Auto Pay). Variable rate loan rates range from 2.41% APR (with Auto Pay) to 6.99% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
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2 Important Disclosures for SoFi.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.45% effective May 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.41% – 6.99%1||Undergrad & Graduate|
|2.41% – 7.89%2||Undergrad & Graduate|
|2.43% – 6.65%3||Undergrad & Graduate|
|2.38% – 6.81%4||Undergrad & Graduate|
|2.41% – 8.19%5||Undergrad & Graduate|
|2.60% – 9.60%6||Undergrad & Graduate|