Travel is one of the most amazing gifts you can give yourself. There is just something so exciting about booking a ticket and planning a vacation to some exotic faraway location. But before you buy that dream trip, it is important to do some financial pre-planning so you don’t end up regretting your holiday when you get home to the credit card bills. As such, we’ve sat down with Elisabeth Dawson, the founder of COPIA Wealth Management & Insurance Services and the author of the new book, to get the scoop on saving before and then spending wisely while traveling. Dawson’s company provides financial and insurance advising with education to help her clients achieve their desired wealth goals using a macroeconomic approach that starts with a “Wish List.” Here are her five top tips.
Tip #1: Budget in Advance
Start by budgeting to save monthly so that you are not using credit to pay for your “Great Experience.”
“Be mindful of exactly what you are going to give yourself as a budget to spend on your trip prior to going so that you do not regress to using credit cards,” Dawson says.
Tip #2: Change Currency Before Departing
Always call your bank prior to traveling outside the country to make an appointment to exchange your money into the currency that you will use in that country.
“It is better to do this in advance so that you save money on bank ATM international transaction fees, airport currency exchanges that charge you a fee on your exchange (you lose money), or not being able to find a bank that will exchange currency for you. Be prepared and work with all of your money not just a portion of it,” say says.
Tip #3: Don’t Overspend
Here Dawson says it is important to create a daily budget and stick to it:
“Give yourself a daily budget that you are allowing yourself to spend each day. Again, save for that freedom while you are on the road. Breakfast, lunch, and dinner, plus activities and shopping that you want to do should all be allocated. I have a cousin, who when she travels with her husband, creates a budget that she allows them to spend per day for the entire trip. They never go over budget when they travel and allow themselves to splurge at the end from not overspending on the days that they didn’t spend as much as they budgeted. This makes sense for everyone. Having cash along the way or a specific account that allows you the freedom to only spend what you have set aside for your vacation experience is critical. Know your limitations.”
Tip #4: Know Your Bank
If you need to change money on the road you can save on fees by using banks with reciprocal agreements to yours at home while traveling.
“If you bank with sister banks while traveling you are not going to be charged fees and or even international exchange rate fees, which can add up quickly,” Dawson says.
Tip #5: Have Fun!
And finally, Dawson suggests to not forget to enjoy yourself.
“There are so many free things in every city that you go to any country you visit. Remember traveling is all about the experience. Check out the area prior to going and see what you can get to do on a discount or for free. You will be surprised.”