Working through your bucket list costs money, but some people spend more than others. In fact, a good number of the 1.2 million international tourists worldwide have made grave financial mistakes while planning a holiday. This includes not getting travel insurance, applying for the wrong credit card, making large currency exchanges before traveling, not turning off cellular data, not booking enough time between flights, and not setting a realistic budget from the beginning. While some mistakes have a minimal effect on finances, others can haunt you for a long time and may even ruin your financial stability.
The Right Budget
Not having the right budget or realising that you don’t have enough money for food or accommodation once you arrive at your destination can ruin your holiday. It can also cause a certain amount of anxiety and lead to more money being drawn out of your savings or emergency funds because the current budget just isn’t enough. Budgeting early is essential and travellers are advised to start with a spreadsheet that details expenses and the total budget. This will help you work out costs for airfare, train tickets, public transport, tours, accommodation, food, drink, shopping, and travel insurance and adjust the budget as needed. Once you have an overview of the total projected cost, you can either find ways to get better prices or settle with the current total.
Useful Credit Card Tips
Choosing the right card can be difficult but experts note that consumers have to be honest about their financial habits and needs for them to find the right card. A Barclaycard Arrival Plus World Elite Mastercard, for example, is a good choice for frequent travellers because it comes with a lucrative signup bonus of 40,000 miles when you spend $3,000 the next 90 days upon opening the account. A good credit card goes a long way, according to finance professionals because it can open doors to luxury hotels and resorts, provide access to a personal travel advisor, and offer trip cancellation insurance. Cards such as American Express or Chase offer amazing rewards for travellers. This can include zero fees for the first year and bonus miles. One of the best American Express credit cards for travellers is the Starwood Preferred Guest Credit Card where you can earn up to 5 points per dollar when you check in to SPG hotels, 2 points per dollar spent in any Marriott property and 1 point per dollar for all purchases. What is great about this AMEX card is that you can transfer your points to buy plane tickets from over 30 airline partners.
Chase’s Sapphire Preferred Card is also a good choice especially for travellers on a budget. It offers $300 worth of annual travel credit, 50,000 bonus points after spending $4,000 for the first three months, and transferable points to participating hotels and airlines.
Aside from applying for the right credit card, card flipping is also a good idea as this allows travellers to take advantage of promotional rewards. Rotating balances is also a smart move if you want to whittle down debt. However, finance experts encourage consumers to pay off their balances promptly to avoid heavy penalties.
Things to Do Before You Travel
Traveling abroad is exciting but often, travellers forget crucial details that can cause a dent on the budget. One of the things many forget is to notify their bank about their plans. Banks go the extra mile to protect your identity and if they see your card being used in an unfamiliar location, they will assume the worst. To prevent temporary cancellation of your card while abroad, it is best to tell your bank about your travel plans. Talk to them about transaction fees as well so that you know how much you will be truly spending while away from home.
You should also call your network provider, according to experts so you can get an idea about the costs of using data abroad. It can get ugly if you don’t ask because by the time you come home, you might be welcomed by a hefty bill. For some travellers, cell phone bills have amounted to $10,000 or more after using their data abroad. This can be scary and will definitely threaten your economic stability. Call your network provider as soon as possible or turn off roaming services altogether.
When booking flights, it is advisable to get a bit of buffer between them. Connecting flights can be a nightmare especially when there are delays. To ensure that you are never late for a flight or be forced to rebook, don’t book flights too close together.
Before you leave, bring just the right amount of money in the currency of the place you’re going to. This money should cover your cab ride and food. It is important to avoid a currency exchange while you are still in your home country because exchange rates at home are usually higher. By the time you reach your destination, you can withdraw from an ATM right at the airport to get better rates.
The Importance of Travel Insurance
It is tempting to not get travel insurance when you’re going on holiday. After all, nothing is likely to go wrong. However, mishaps happen. You can get food poisoning from the tasty local fare or lose your luggage in your connecting flight. Your trip may even get cancelled or your trip cut short. All of these need to be covered so that you have peace of mind during your trip because if you don’t have coverage, you will be spending a lot of money out of pocket. This can set you back thousands of dollars or more.
Getting a comprehensive travel insurance policy is recommended by experts. It covers unexpected medical costs while abroad, offers coverage for having to cut your trip short, covers stolen or lost luggage, and even has personal liability, death, and disability coverage. While there are many things that you need to prepare for before you travel abroad, it is important to remember that you need to take precaution when it comes to your finances before you fly to your destination. Enjoying the now without being responsible for what is ahead will be a decision you might regret.