If you are hoping to travel in 2023, you are in good company: the U.S. Travel Association is forecasting that Americans will be taking more trips and spending more on them than in 2022. But amazing adventures to sip wine in Porto, Portugal or to hang out on the beaches of Puerto Viejo in Costa Rica don’t just happen, you have to prepare for them.
How to Plan for Travel
Assess your schedule
Unless you have total time freedom, your ability to travel is likely restricted by your work schedule or other obligations. Start by assessing your vacation days and time off for holidays. Also, consider whether there are certain times of the year when you can or cannot travel (think school vacations and busy times at work).
Dream up trips & locations
Write down all of the places you are already planning to travel to such as heading home for the holidays, weddings you’ve RSVP’d yes to, your 10-year college reunion, and so on. Then, make a list of the places you might want to travel to in the remainder of your free time. You’re just brainstorming so feel free to dream big.
Estimate the costs
Now comes the reality check. Research flight prices, accommodation rates, and the cost of dining out in the locations you identified in the previous steps. Google Flights and Google Travel hotels search are effective tools for getting a rough estimate of costs for flights and accommodations. For restaurants, search for a few places that you could envision yourself eating at and look at the menu. Alternatively, check out Nomad List for the average cost of dinner in your desired location. The point of this exercise is to have a rough idea of how much a trip might cost. To be safe, add another 20%-30% to your estimate.
Assess points & vouchers
If you have a travel rewards credit card, you likely have points that you can redeem for some of your travel to reduce your out-of-pocket costs. Assess how many points you currently have (or are expecting to have later in the year based on your regular spending). Vouchers for canceled flights will also reduce the impact on your wallet. Just make sure you know when the vouchers expire so you can plan to use them before then.
How to Save for Travel
Set up a monthly transfer
Once you have an estimate of your travel costs, it’s time to start saving. Create a separate travel fund at your bank or a new high yield savings account and set up a recurring monthly transfer in an amount that will allow you to have the cash you need for your planned trips.
Consider windfalls
Bonuses, tax refunds, and birthday gifts can all help boost your travel fund. Just make sure not to spend the money booking a vacation before you have the cash in hand!
Side hustle
If you can’t save enough from your regular monthly income and don’t expect any windfalls to come your way, consider a side hustle or second job to make up the gap.
How to Manage Expenses While Traveling
Split costs
If you are traveling with friends or a partner, set up Splitwise to easily and transparently track shared expenses and exchange money without interrupting the fun.
Withdraw cash
Depending on where you are traveling, cash may still be the preferred form of payment. This gives you the opportunity to keep your spending in check by sticking to a cash budget. Only withdraw the amount of cash that you want to spend for the day or week and limit yourself to that. To save even more, consider using Schwab Investor checking which does not charge foreign transaction fees and will also reimburse you for ATM fees.
