Tips to save on travel
Planning out fixed and variable costs keeps you on track during vacation, expert says
Play now, pay later is how many funseekers approach their summer holidays.
More than a third of Canadians take a mental vacation from money worries, according to a Bank of Montreal survey in 2015.
And in Amie Burke’s experience, more than half of consumers don’t draw up a realistic vacation budget. That easygoing attitude can turn up the financial heat, warns the retail business devel- opment manager for Meridian, Ontario’s largest credit union.
“It can be very stressful if you overspend and end up paying it off for months,” Burke says. “Planning is key.”
A realistic budget, she explains, is one that covers both fixed costs, such as airfare, and variable costs such as food, as well as being affordable and within your ability to save in advance.
Whether you’re heading out of town or taking day trips as part of a staycation, Burke recommends creating a “financial GPS” to map out expenses. After deciding where and when you’re going, how you’ll get there and what you’ll do when you arrive, calculate those costs of travel, accommodation, food and entertainment.
For an accurate tally, you’ll need to consider a list of possible expenses: flights, bus or train fare, rental cars, cabs or Uber, hotels, Airbnb, B&Bs, meals, snacks, nights out, attractions, tours, admission fees, souvenirs, gifts … and surprises.
There are unforeseen costs, such as overweight luggage fees ($25 per bag and up, depending on the airline), WiFi or roaming charges and spontaneous activities.
In BMO’s 2015 survey, Canadians said they expected to spend more than $2,000 on summer vacations and weekend trips.
Financial services company Capital One Canada found that costs were all over the map when they analyzed the data of anonymous cardholders who holidayed in 11 Canadian cities two summers ago.
The data covered what people spent each day on average for hotel, taxis, dining and nightlife. (The analysis couldn’t determine if the expenses were for one person or a whole family.)
Quebec City was the most expensive at $354, Winnipeg the cheapest at $244 and Toronto was right in the middle at $304. Travellers spent big bucks on a night out in Hogtown bars, however: $78 on average compared to $46 in Halifax and $65 in Vancouver.
Attractions added about $92 a day in Toronto, $45 in Ottawa and $109 in Edmonton.
According to BMO, credit cards are the most popular payment method for summer fun expenses. That’s fine if you pay off the full balance before interest charges kick in, Burke says. And you may benefit from whatever rewards program comes with the card.
But using plastic makes impulse buys easy, she cautions, suggesting that cash might be a better option for some activities or outings.
One of her key recommendations is to set up a separate savings account with no fee and high interest.
Then divide your vacation budget by the number of weeks until your holiday rolls around and put that amount of money aside each week. (It’s not too soon to do this for a winter getaway.)
“Every dollar is earmarked for your trip,” Burke says.
The pros offer these tips to cut costs and save stress:
Look for last-minute travel deals and cheaper days, or times.
Research free or low-cost outings such as festivals, entertainment in parks and self-guided tours of eclectic neighbourhoods, suggests Capital One Canada.
For day trips, try packing a lunch along with your own drinks and snacks to avoid pricier restaurant and takeout food.
Learn about the travel benefits offered on your credit card, advises Capital One. For example, it may provide insurance on a rental car.
Consider walking, cycling or taking public transit to save on urban transportation costs.
Notify your credit card company about upcoming travel plans so they don’t deactivate your card if it’s used in ways that are atypical of your normal pattern.
Track your spending so you don’t exceed your budget and can adjust if needed.