Don’t Take a Vacation from Your Budget
There are certain times of the year when people seem to ignore even the basic personal finance rules. People overspend during the holidays (averaging $1,000 a year for gifts, food and decorations). The other? Vacations. The average American spends nearly $4,000 a week for a vacation for two. That includes nearly $1,000 in travel costs for a domestic vacation; double that for international travel.
Vacation Finance Tips
If you don’t want to end up paying off credit card debt for the next five years after that two-week European vacation, have a plan. Financial experts have some suggestions.
Set a Budget
Set a budget. Determine how much you plan to spend on various aspects of your trip (food, activities, souvenirs). Use budgeting apps to track your expenses in real time.
Carry cash. A savvy traveler knows that it’s always a good idea to bring cash with you on a vacation, regardless of destination. There are some countries where you’ll be hard-pressed to use a card or other digital payment. In Germany and Japan, for example, you’ll want to have Euro and Yen with you since credit cards may not be accepted at some hotels, restaurants, or rail travel.
Have Emergency Funds
Set aside emergency funds. Keep an emergency fund accessible in case of unexpected costs. Store it in a separate account or in a secure location. Adding a small ‘unexpected costs’ fund to your budget can help avoid any mishaps. Divide your unexpected costs into a per-day allowance to make sure you’re ready for anything at any time.
Notify Your Bank
Notify Your Bank. Before you travel contact your bank to let them know your travel plans. This will help you avoid your cards being flagged for unusual activity. Charges overseas many times are flagged by your credit card company.
When you’re away from home, the risk of fraudulent transactions increases
Download your Credit Card App
Download your credit card app. Pretty much all the credit card issuers today have an app, and that allows you to monitor transactions in real time. When you’re away from home, the risk of fraudulent transactions increases, and you want to make sure you’re on top of any activity that’s happening on your credit card.
Carry more than One Credit Card
Carry more than one credit card. Carry at least two different credit cards in case on card is compromised or is not accepted.
Have a Payback Plan When You Return
Have a plan for how you will pay off your credit card expenses after a trip. In an ideal world, you should pay off the entire outstanding balance, but if you can't, then you should consider what the appropriate time period is for payoff. Sometimes taking a personal loan to refinance the outstanding balance can be done at a lower rate and fixed term.
Now Enjoy the Vacay
Taking these additional steps can provide peace of mind and protect your finances while you enjoy your vacation. Being proactive about your financial security allows you to focus on creating wonderful memories and enjoying your time away without unnecessary stress. A little preparation beforehand really does go a long way.
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