Summer is here and the travel season is in full swing. If you’re planning to vacation abroad and explore other countries, now’s the time to determine how to get the most out of your experience without blowing your budget. Before you jet off, consider some ways you can save money!
According to the National Travel and Tourism Office, in 2016 a record number of Americans traveled abroad – 66,960,943 to be exact. And that trend is anticipated to continue in 2017.
Transportation costs are usually the biggest expense when traveling abroad. Most people are aware of this and seek out the lowest airfares. But that’s not the only way to save a bundle!
Ditch the Hotel
Housing will be another significant chunk of your costs. Instead of scouring the Web for cheap hotel deals, consider renting from locals. Renting can be unbelievably reasonable. An added bonus: It can improve the quality of your experience. The landlord can give you some tips on authentic dining places and the unheralded "must see" spots in the city not included in the tour guides.
The most popular website for finding rentals is AirBnB, but there are many others. Check them out. Before booking, ask questions to see if a specific rental will meet your needs. Consider it a red flag if a host isn’t forthcoming with details. Move on to the next one!
Tip: The first time you search, don’t include dates. This will give you a better feel for the city, listings, and prices. Then play around with your travel dates. With date-specific searches you can sometimes find amazing deals by simply changing your trip dates by one or two days.
Finally, read the reviews! Reviews from fellow travelers can provide you with valuable insights.
Call Your Mobile Carrier
The costs of texting, calling, and using your data services abroad can quickly add up. And we all know how addictive our Smart Phones are! Selecting the optimal mobile plan can save you big bucks. Most large carriers offer several options depending on your wireless and data needs as well as the length of your trip. For example, T-Mobile’s new Simple Choice plan offers talk, text, and data in 140-plus countries at no extra charge. See what your carrier offers.
Another option is to purchase a SIM card in the country you’re visiting. Typically they’re available for purchase at the airport – the information desk will point you to the right direction. If you only need to use your mobile for calls, this can be the most cost-effective approach. The new SIM card will have a local phone number, but will allow you to make calls and utilize the data services for social media, email, FaceTime, WhatsApp, and Skype calls.
Use Only Foreign-Friendly Cards
Call your bank and credit card company before you leave to see if your cards are accepted where you’ll be traveling. You don’t want any surprises! In Cuba, for example, debit and credit cards issued by U.S. banks are worthless.
- Credit cards. For countries that do accept U.S. credit and debit cards, ask about potential bank fees. Banks are notorious for charging foreign transaction fees. Even small fees can add up quickly. If your bank charges foreign transaction fees, there are others that don’t such as Chase Sapphire Preferred Card or BankAmericard Travel Rewards Credit Card, which also has no annual fee. Caution: Some foreign transaction fees can be as low as 3 percent ($30 per $1,000 of activity). If you plan on charging only $500 or less, signing up for another card might not be worth the $15 in savings! And one last tip: Avoid cash advances at all costs!
- Debit cards. You probably already know that the majority of ATMs charge a fee for withdrawing cash per transaction. But did you know that many banks also charge international fees? Often it’s not obvious because the ATM transaction doesn’t alert you about the international fee. To save money, consider opening a bank account and using a card that waives international fees such as the Charles Schwab debit card. Schwab offers not only to waive your foreign ATM withdrawal fees, but also refunds any fees foreign ATMs may charge.
International traveling can be an exciting adventure. But it can also be very expensive if you don’t plan wisely. Prior to your trip, do your homework and consider some of the tips shared above. You’ll be surprised at how much money you can save during your travels. Bon voyage!
Anthony Bykovsky, CFA, is a Portfolio Manager at Bedel Financial Consulting, Inc., a wealth management firm located in Indianapolis. For more information, visit their website at BedelFinancial.com or email Anthony.