Financial and other considerations for travelers By Colton Dooley • Guest Columnist
Whether you want to take a dream
trip around the world or simply want to visit your cousin in Indianapolis for a few days , you can benefit from some pretrip planning . If you plan far enough in advance of your departure , you ’ ll usually get better rates on airline fares , lodging , and packages than if you wait until the last minute , particularly if your travel plans are flexible . If you ’ re traveling to a foreign country , you may need time to obtain a passport or a visa or to research your itinerary . In addition , you ’ ll reduce the inevitable stress that accompanies traveling by preparing yourself as thoroughly as possible .
Dooley
Tip : If you believe a great trip is a spontaneous one , look into last-minute travel deals offered by some airlines , travel agents , and travel websites . You usually can book them only a few days in advance of your departure , and your choice of destinations is limited . However , these last-minute trips are usually a bargain , because airlines , hotels , and tour groups are trying to sell their unreserved spaces .
Financial considerations for travelers
Paying for your trip with cash vs . paying with a credit card
The main advantage to paying for your trip with cash is that you ’ ll be less likely to overspend , because you can clearly see how much you ’ re spending , and you won ’ t have to pay your trip off little by little , long after your vacation has ended . Even if you pay for most of your travel arrangements with cash , make sure that you don ’ t carry large amounts of cash with you on your trip . It ’ s safer to take traveler ’ s checks or use an ATM card .
One advantage to paying for a trip with a credit card is that you ’ re better protected if something goes wrong . If you use a credit card to pay for refundable airline tickets , the airline must forward a credit to your credit card company within seven days of receiving your application for a refund . You can also use a credit card to guarantee a hotel reservation , which can be useful if you plan on arriving late .
The hotel will hold your reservation until midnight instead of canceling it if you don ’ t arrive by late afternoon or early evening . However , you must cancel your reservation if you decide not to come at all ; otherwise , the hotel may bill your credit card for one night ’ s stay and cancel the rest of your reservation , if any . If you pay for your trip with a credit card , you may also receive free travel insurance , such as travel assistance , baggage protection , and / or travel accident insurance .
Tip : Even if you use a credit card to pay for much of your trip , you ’ ll want to carry some cash with you . For instance , in Europe , credit cards are not as widely accepted as they are here , so you may find that some restaurants , stores , and hotels don ’ t accept them at all . Even if you take the bulk of your money in traveler ’ s checks , you should take with you a small amount of foreign currency for each country you plan on visiting . You may want to pay for a cab , a phone call , or a meal before you have a chance to find an open bank or exchange desk .
Tip : If you do decide to carry a large amount of money with you ( including traveler ’ s checks ), be aware that if you leave or enter the United States with more than $ 10,000 , you must file a report with United States customs or else be subject to civil and criminal proceedings .
Getting your money back when you can ’ t travel
Before making travel arrangements , find out what will happen if you have to cancel your trip . In most cases , you ’ ll pay some penalty if you cancel . For instance , if you purchase nonrefundable airline tickets ( many tickets issued at a low fare are nonrefundable ), you can ’ t get a refund if you cancel your trip . But you can rebook your trip later ( usually within one year ), although you ’ ll generally have to pay a fee to do so . If you have to cancel a group tour or cruise , expect to pay part or all of the cost of the trip , depending on how early you cancel . Since the cancellation policies vary widely , make sure you understand how and when you will be charged if you cancel . Some companies offer optional trip-cancellation insurance that costs approximately 5 to 7 percent of the cost of the trip . These policies reimburse you if you have paid for a trip and then can ’ t go due to illness , natural disaster , or accident or for another reason out of your control ( e . g ., the tour operator went out of business , or you are called to serve on a jury ).
Preparing a daily budget Have you ever returned from a trip happy because you spent less than you anticipated ? If you ’ re like most travelers , the answer is no . You usually return from trips feeling overextended or even guilty because you spent more money than you wanted to . If you want to avoid this , plan a daily budget before you leave on your trip . This can mean simply deciding how much you want to spend each day , or it can mean breaking down how much you want to spend on certain items on your trip .
Budgeting is particularly important if you are traveling overseas . You may underestimate how much you will spend overseas because food , gas , and other items often cost more than you are used to paying in the United States . If you ’ re on a group tour or have purchased an all-inclusive package , you may be better protected than someone traveling solo . However , you need to make sure you understand what your tour or package covers and what it does not . In addition , it ’ s a good idea to use a guidebook as a reference or talk to a travel agent about how much you can expect to spend for necessary items overseas . This will ensure that you aren ’ t skipping meals or running up huge debts on your credit card that you didn ’ t anticipate .
Example ( s ): Bridget took a tour of Europe , stopping in Germany , Czechoslovakia , and Denmark . She planned to spend $ 25 a day on food , $ 60 a night on lodging , and $ 15 a day on other items , such as transportation . She found that she was easily able to stick to her budget in Czechoslovakia , where food , lodging , and other items were much less than she expected . In Germany , however , she had to look hard to find lodging for $ 60 a night and was barely able to stay within her food budget . In Denmark , she was unable to find lodging for less than $ 80 a night , and she couldn ’ t eat for less than $ 40 a day , unless she stuck to street vendor ’ s fare . She was forced to pay for her hotel room with her credit card so that she would have enough money to eat three meals a day and travel around the country as she planned .
Tip : If you ’ re traveling overseas and plan on bringing your cell phone , plan ahead . International service charges are often very high , and service is not always available , so check with your carrier before you leave home . Consider purchasing an international calling plan , or look into mobile Internet calling or mobile applications that can help you save money .
• Colton Dooley is Portfolio Manager for Citizens National Bank Wealth Management . www . meridianstar . com
• 29