As the summer months quickly approach, travel bookings are back on the rise. Recent reports by the World Travel & Tourism Council (WTTC) indicate that this sector of the global economy could reach contributions of $8.6 trillion in 2022, nearly 94% of pre-pandemic figures.
Assuming there’s a good chance that you’ve caught the travel bug like many others, it’s important to be aware of the financial impact of your plans and be proactive before taking that financial step.
Whether you’re already navigating struggles with debt or just looking to plan ahead, here are four actionable steps you can take to make traveling more financially friendly.
Track Your Spending & Make a Budget
The first thing you should do is take inventory of any outstanding debts to better assess where you currently stand financially. Make note of how much debt you’ve incurred across the various types: credit cards, mortgage payments, student loans, etc.
Creating a comprehensive budget that takes into account your everyday expenses and outstanding debts, in addition to cutting down on unnecessary spending, will help you put more money towards your monthly payments. This affords you more breathing room for your vacation planning.
A firm grasp of your finances allows you to make conscious travel decisions. It’s crucial that you factor these expenses into your budget to ensure you don’t fall deeper into debt.
Breaking down the costs into categories like transportation, lodging, food and drink, and planned activities makes a budget more easily understandable and will help you stay within your limits.
Be Realistic About Your Destination
Along with the increasing demand for travel comes increased prices for accommodations in many popular destinations. Although a vacation may be a much-needed escape from the problems of everyday life and the stresses of the past few years, breaking the bank to afford it can be extremely counterproductive.
If you’re dealing with considerable debt, it’s essential to weigh your options rationally and make travel decisions based on what you can afford. There’s no sense in creating a mountain of debt for a getaway just to have to face the reality of it when you return.
After calculating your finances, if you decide to go an a vacation, you can choose a destination that is affordable and have cheaper accommodation facilities. For instance, if you decide to go to Israel, you can look for a hostel Tel Aviv or tube hotels which can cost considerably less than generic hotels. Similarly, you can also save money on flight bookings by looking for discounts or trying local eateries and street food instead of spending on luxurious restaurants.
In some cases, you may also have to consider putting off travel for a period of time. This will give you time to improve your financial health and set yourself up for a better experience down the road.
When looking to travel internationally, pay attention to exchange rates as they can assist you in destination decisions and offer the potential for extraordinary vacations at a fraction of the price.
Check for Travel Rewards Before Booking
If you regularly use credit cards, hopefully you’ve accumulated some points along the way that you can put towards your travel.
Many credit card companies differentiate their products through various perks and points earned through purchases, some of which you may have and be unaware of. Before you charge your credit cards to book, you should check to see if you may have any points or travel perks available to put towards your stay.
On the other hand, if you plan on opening a new credit card account to pay for your travel plans, make sure you do the research and consider certain cards that may offer perks or free accommodations incentives. In doing this, you can reduce overall expenses toward the credit you were already planning on using.
Be Smart About How You Fund Your Trip
The final step is to remain open-minded to all of the financial options that may be available for your travel funding. While credit cards are useful for their perks and ease of use, adding more liabilities along with additional interest rates can only further your debt especially if you have existing accounts open.
An alternative that may be more financially feasible is to use a personal loan to fund your trip. Individuals may take out personal loans for any number of reasons, but a common motive is vacation financing.
This option offers more reasonable interest rates with only a single installment each month, as opposed to the higher rates and multiple payments required when dealing with credit cards. A singular interest rate and payment to adhere to can ease the stress and confusion that comes with paying your bills.
If you’re itching for a getaway but are unsure how to make it work because of debt, there’s no need to panic or miss out. Utilize these steps and it’s more than possible to turn your travel aspirations into reality.