Wouldn’t it be nice to go on vacation and never look at your bank account balance or credit card limits? But that’s not practical for most people. Whether we have saved all year for the vacation (or the wedding at its destination), are using some of the tax refunds to fund the vacation, or are allocating a travel budget Regardless of what we do, most of us travel.
Otherwise, you may run into a trap that Vadim Verdyan, Head of Advice for the “Genius” team of personal finance app Albert, calls “bottomless spending.” If you don’t think about your budget when planning your vacation, you risk credit card debt and can incur high monthly payments.
In addition, after a limited trip of two years, people are more likely to waste than ever, he said. “Historically, summer has always been the second most expensive season after winter vacation,” he said in an email interview. “This summer can be the most expensive ever.”
He attributed the increase in costs this year to the overall rise in travel prices due to rising gas prices, significant inflation, and rising demand. Travelers will spend more to get the same facilities, services and experiences as before the pandemic.
However, recent figures from American Express Travel also show that people are up a bit more this year. Audrey Hendley, president of American Express Travel, told Forbes that 2022 bookings have increased by 35% compared to 2019. .. Survey respondents reported that they earn more than $ 70,000 a year.
Of course, if there is a way to do that, there is no reason not to do everything this year. However, for many, careful planning may be required to realize that dream vacation.
Decide if you can travel at all
Verdyan emphasized that travel should never come at the expense of retirement savings, repayment of high-interest credit card debt, or building an emergency savings account with 3-6 months of living expenses. .. If you can meet these three criteria every month, Verdyan says, “You may have a budget.”
However, even short trips can help you stay sane and reach your financial goals. It’s time to create a budget.
“Most people receive a fixed amount each month, so to spend more on travel, etc., we need to reduce spending in another category,” Verdyan said. “Usually the easiest places to cut are shopping and eating out.”
You can also consider earning extra income by undertaking gigwork, selling unwanted items on the Facebook Marketplace, or cashing out credit card benefits to help you pay for your trip.
“Many credit cards provide a multiplier for redeeming travel points, which provides the required value gain and is a bit more affordable,” Verdyan said.
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Determine how much you can spend on your trip
“As travel costs increase, people may have to cut or shorten their trips,” Verdyan told GO Banking Rates. “For example, if you spend a year saving $ 2,000 on a trip that currently costs $ 2,500, you’ll need to make some changes, but if you book your flight or hotel in advance, you’ll miss all the price increases. It’s possible that booking long ago is always a good idea to save money. “
If you didn’t book in advance, or if you want to make sure you have the money you need for your discretionary travel spending, you’ll need to research the average cost of your destination and budget for various advertising information. I have. Travel from sightseeing to food and drinks.
“Inflation affects everyone, but that doesn’t mean people can no longer afford what they want,” Verdyan said. “They need to be a little smarter about how they use it.”
Consider an all-inclusive resort when booking a vacation
If you don’t want to worry about counting all your dollars while you’re away, consider booking a vacation at an all-inclusive resort. However, some resorts may not include certain attractions or alcoholic beverages, so be sure to know exactly what they do before signing your final earnings.
Protect your trip with travel insurance
Finally, in today’s uncertain times, travel with a credit card that offers travel insurance in case you need to cancel or postpone your trip, or if your excursion is canceled for reasons beyond your control. It is wise to book.
Even if you choose to use a travel award credit card for your awards, try to stay within your travel budget. “Please do not use credit card Every month, about points, benefits, or benefits if you haven’t repaid the full amount of your statement, “Verdyan warned. “Interest costs much more than you get from your rewards.”
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