Planning a vacation and avoiding the debt
Saving up for adventures in advance a smart strategy to fund travel expenses
Question: I want to travel this summer, but I don’t have a ton of money. How can I go on an adventure without piling on credit card debt?
Answer: We all need time to recharge (while making our friends jealous with artfully filtered Instagram photos). But travel can be pricey: An American Express survey found respondents expected to spend, on average, $941 (U.S.) per person on summer trips in 2016.
Here’s how to save and spend wisely when you’re ready to get out of Dodge. Start a travel fund If you have the luxury of several months to plan, set up a savings account specifically for travel. You can schedule recurring transfers from your chequing account or set up direct deposit from your paycheque.
John Schneider, who runs the blog Debt Free Guys with his husband, David Auten, says they each save $50 per pay period in a travel “slush fund.” They didn’t set up online access to the account, so they must withdraw money from it in person at their credit union. That discourages the couple from dipping into the fund to cover daily expenses, Schneider says.
Of course, make sure to save at least $500 for home emergencies before shifting your resources to a travel fund. Just starting to save for summer vacation now? You won’t have much time, so if you put some ex- penses on a credit card, set a spending limit and make a realistic plan to pay off the balance. Pick destinations according to airfare Getting to your destination will often be the biggest drag on your wallet. According to the U.S. Bureau of La- bor Statistics, for domestic trips of at least one night, transportation accounted for 39 per cent of the total cost in 2013, followed by food and alcohol (27 per cent) and lodging (26 per cent). For global trips, transportation was more than half of the cost.
There’s always camping or driving to your destination, which is often cheaper than flying. But for destinations farther afield, websites like Airfarewatchdog, Google Flights and Skyscanner will let you compare airfares to your preferred destination. They’ll also show you what locations fit your budget.
If you’re loyal to a specific airline, use any miles you’ve earned; check the airline’s fare calendar and pick a vacation spot that way. Live large beyond hotels Steer clear of pricey hotels and choose lower-cost options like hostels, Airbnb, staying with local hosts for free on Couchsurfing and renting vacation homes on VRBO and HomeAway. If you have your own kitchen, you can cook and make drinks at home to cut down on food and alcohol costs.
Schneider also recommends house swapping, especially if you’re travelling internationally. For a monthly or annual fee, services like HomeExchange and Love Home Swap will let you list your place and swap it with other members. Home Exchange says swapping saves members “up to 58 per cent on typical vacation costs.”
You can also save money on housing — and airfare, for that matter — by travelling to less popular summer destinations. Costa Rica between May and November is one option; it’s the rainy season, which locals call the green season.