Top Tips to Keep Spending in Check:
As the economy continues its climb out of recession, many families might be thinking twice about what they spend on the annual summer vacation. But there are ways to preserve the tradition by being smart about spending. Some ideas:
Get on the mailing list:
For any possible destination you can think of, go to their Web sites early and get on their mailing list. You might get plenty of endless chatter from the hotels, amusement parks and other destinations you’re interested in, but you might also find coupons to those locations and other linked businesses that could save you money. Also go to travel magazines to see whether signing up might deliver similar money-saving offers. Most important, go to the tourism Web sites of the states you’re planning to visit to take advantage of coupons and specials – you might also find events and activities to attend that aren’t publicized anywhere else.
Weigh the value of driving vs. flying:
Even though energy prices might not approach the stratospheric levels of 2008 this summer, you might find that driving vacations aren’t necessarily the cheapest alternative. If you haven’t measured the gas mileage lately on your car, do so after your next fill-up and see what it would really cost you to drive to your desired destination – and don’t forget wear and tear on the car (roughly 10 to 20 cents a mile), meals or hotels on the road. If you plan significantly ahead of time, traveling by air might not only get you there faster – but cheaper. At the same time, if you fly and need a rental car, don ’t forget to figure in that cost. Also, go to the Web sites of the airlines you fly the most and sign up to get advance notice of cheap fares.
Make your reservations online:
Tourism businesses save money when you reserve online – that’s one less human they have to pay to handle your call. So chances are good you might get a slight discount for using that option. If you’re not a regular user of the Internet, you should know that airlines and hotels particularly have migrated more of their deals for rooms and meals to their websites because visitors can complete the whole reservation process themselves. That saves airlines, hotels and rental car companies considerable labor cost.
Go for the package deal:
Online travel sites make it easy to combine hotel, airfare and rental car at a cheaper rate. And remember the days and times that are typically cheaper to fly – Tuesdays, Wednesdays and Saturdays if you’re willing to fly early in the morning or late in the evening.
Know when to use travel agents:
A good travel agent can be a great money saver, particularly for lengthy or complex trips. It’s OK to compare prices yourself, but consult a travel agent if you are going to remote destinations – they’ ll know the territory, and if you have to make changes, they might be able to help you do so without paying a lot of extra money. Don’t be afraid to consult the company travel agent since their corporate status may make them a destination for specific deals that non-affiliated travelers wouldn’t get.
If you’re going abroad:
Do a review of currency rates before you go to see how much money you’ll really have to spend on the trip. Also, see if there are specific ways you can save money for dining, lodging and shopping in that country. Also, check in with your credit card company before you go – some might charge high currency conversion fees, and you can either negotiate them downward or apply for a card with a lower conversion rate that you’ll use only for this kind of travel.
Make sure phoning home is affordable:
Make sure you can use your cell phone affordably wherever you go. Check with your wireless provider to make sure your destination has adequate network strength for your phone, and particularly check what it will cost to call home or other destinations abroad if you’re overseas. There’s nothing like the shock of a wireless bill with unchecked charges. You might also check with your arriving airport to see if local stores rent cell phones or disposable cell phones at a significant savings.
Check on car insurance:
We’ve all heard how buying rental car insurance is a bad deal, but not so fast. For domestic trips, double check whether your own car insurance policy is likely to pick up the bill if you crash your rental car. For overseas trips, check with your rental agencies, as well as your credit card company, to see what insurance options you have. Don’t think only in terms of accidents. Think about blown transmissions in small towns with only one mechanic who doesn’t speak English. Also, if you’re driving to Canada or Latin America in your own car, be very sure you have adequate coverage required in every country. You might have to buy supplemental coverage.
Consider travel insurance:
There is insurance coverage available for travelers who face sudden cancellations as well as medical needs. Trip cancellation can reimburse you for non-refundable costs in the event of things like an illness for you or a family member that causes you to cancel your trip. Look into what your current health insurance covers at your destination, so that you can understand your risk exposure and weigh it against the cost of supplemental insurance. It’s important to realize that health insurance issues crop up on domestic trips as well as those overseas – for instance, your health insurer may not cover claims in other parts of the country. Always check. Also, if you’re on a business trip, make sure your company health plan will cover you in an emergency, and if your work takes you to a dangerous country, ask if your employer carries kidnapping and ransom insurance. Don’t laugh. According to the Insurance Information Institute, kidnapping is on the rise internationally.
Prevent theft at home and abroad:
Photocopy your driver’s license and passports and keep the originals with your valuables in the hotel safe. Also, don’t forget to hold your mail and pay all your bills before leaving town so identity thieves aren’t attracted.
May 2009 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Troy Daum, Certified Financial Planner™, a local member of FPA.
Troy Daum, CFP®
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