October 12, 2020
Financial Planning Tips for the Idyllic Winter Vacation
Guest Author: Alicia Rennoll
With summer coming to an end and the first autumn breeze being felt, many people will begin to look forward to the upcoming holidays and for some, holiday travel. Winter vacations are becoming increasingly popular thanks to lower costs and less crowded destinations. In fact, 23 percent of Americans said they prefer winter vacations instead of summer vacations, according to a study by JetCost. For those that plan on heading away for some relaxation this winter, a top concern is budget. After all, recent data suggest that Millennial Americans can spend as much as $4,400 on travel, though an alarming amount of them cannot afford to. So how can you plan for your winter trip without your wallet feeling the burden? It all starts with planning early and adopting small money-saving habits throughout the planning process.
1. START YOUR WINTER TRAVEL BUDGET EARLY
Recent research by Bankrate estimates that Americans spend $1,979 on their summer vacations. While the general idea is that a winter vacation can be cheaper thanks to lower airfare and hotel prices, this is not necessarily the case if you are not mindful of how you spend. To begin with, you need to figure out how much your budget can comfortably afford early on. If you are planning on using your savings, following budgeting rules like the 50/30/20 rule can help you set aside money in the months leading up to your winter travel. Using your monthly paycheck, you could dedicate a set percentage of your surplus income to your winter vacation.
Other alternatives are using a credit card or installment plans. However, keep in mind that credit cards come with an average interest rate of 20.21% (according to estimates in July 2020). Finally, it is important to remember: fit your travel plans to your budget, not the other way around.
2. FLEXIBILITY IS KING WHEN BOOKING TRAVEL DATES AND FLIGHT OPTIONS
With the increasing popularity of winter vacations, there is a possibility that many other consumers may be thinking the same thing. Flights and accommodation can quickly get expensive. To get the most value when booking your flight and accommodation arrangements, always tick the flexible dates options. Speaking of being flexible, don’t rule out all accommodation options like hostels, independent bed, and breakfasts or rentals for those looking for family-friendly options. Many of the smaller, family-run B&Bs can offer great personalized service, great freedom, smaller crowds, and cheaper prices. Similarly, many hotels already baby-proof their rooms, but you can easily make a hotel room child-friendly with simple tools like safety latches and electrical covers.
Another way you can get the best deals on your winter vacation is to change your approach when booking your flights and winter destinations. Instead of settling on a winter vacation destination before booking a flight and date, make a shortlist of potential destinations, and using one of the comparison flight platforms, check for the destination that has the most favorable prices around the time you want to travel. A final tip: set a Google Alert when you begin researching flights and destinations. This allows you to capitalize on any deals or discounts.
3. CHECK WITH YOUR CREDIT CARD PROVIDER FOR OVERSEAS TRANSACTION FEES
If you are planning on taking an international winter vacation, you need to account for all the counts including transport, food, and miscellaneous costs like transaction credit or debit card fees. Most foreign transaction fees are 1 to 3 percent. When budgeting for your winter trip, check with your specific credit card lender or your card’s terms and conditions for their foreign transaction fees. The same goes for foreign withdrawal fees while you’re abroad. For instance, Bank of America charges a 3 percent withdrawal fee unless you use an ATM at one of their partner banks. If you want to avoid these fees, there is also an increasing list of banks that are scrapping foreign transaction fees like Capital One and Discover.
A final tip to save you some money: buck the trend and opt for a low key travel destination instead. Small cities like Colmar, France, and Breckenridge, Colorado are nestled among beautiful scenery and bustling with winter activities for you to try and yet to be discovered by the masses. Not only does this mean you avoid the crowds but you may also be able to get a great deal.