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Summer is full of simple pleasures: baseball games, barbecues, beach reads, and that great American classic, the road trip. Whether you are heading to a national park or a local lake, on a wine-tasting getaway, an antiquing jaunt, or just to hang with your college roommate, a road trip can be exciting, easily wrangled, and spontaneous.

But if you’re wondering how to save money on a road trip, a little bit of planning can go a long way to keep costs under control.

Learn how to minimize expenses when you head out on a summer road trip, from deciding which vehicle to use, where to get gas, how to eat on the road, and more. Here, 25 easy ideas for road tripping on the cheap.

1. Choose a Fuel-Efficient Car

If you have a choice of cars to take, you may want to go with one that is large enough to be comfortable but also gives you the best gas mileage. This is true whether you are using your own wheels or renting a car.

You can use FuelEconomy.gov’s Trip Calculator to determine which car will cost you the least in gas. This tool helps estimate fuel consumption and how much it will cost for a particular route using a specific car.

2. Drive at or Below the Speed Limit

This cautionary measure can help you save money in two ways. For one, you’ll be less likely to get pulled over and slapped with an expensive speeding ticket.

For another, observing the speed limit can actually reduce your gas consumption. In fact, according to the U.S. Department of Energy, you can save 18 cents a gallon on highways for every five miles per hour you slow down.

3. Pack Your Car Wisely

You can also cut your gas costs by placing items inside the car or trunk rather than piling them on your roof. By reducing drag, this tactic can increase your fuel economy by as much as 25% on highways according to one benchmark study.

If you’re out of room in the car, using a rear-mounted cargo box or tray instead of a roof rack can improve your fuel economy by up to 9%.

4. Set a Road Trip Budget

When you first start talking about the road trip, you may want to roughly map out where you want to go, how long it’ll take to get there, and if you’ll need hotels or motels. From there, you can calculate the approximate cost of gas (FuelEconomy.gov can help) and tolls (try Tollsmart ), as well as food and fun.

Once you’ve established an overall budget for the trip, you start creating a travel fund.

5. Bring Your Own Food and Supplies

Packing a cooler with water bottles, drinks, hand-held snacks, and sandwiches before leaving home is a proven frugal traveler trick. You can end up saving a sizable chunk of cash by not having to buy drinks and snacks at rest stops, vending machines, and drive-throughs.

You’ll also have a quick solution the next time someone in the car wants to pull over because they’re hungry.

6. Sign up for an Electronic Toll Account

Depending on which state(s) you are traveling through, you may be able to save a fair amount of money on tolls by getting the region-appropriate quick pass (or transponder) for your car. In New York, for example, drivers with EZ-Pass can save about 30% on tolls.

7. Avoid Tolls Altogether

When your road trip isn’t on any set schedule, you may want to take the scenic route and completely avoid tolls. You can do this by setting your GPS app to “avoid tolls.”

If you’re in a location with pricey bridges and highways, your savings could really add up. You may want to make sure, however, that avoiding tolls doesn’t take you so far out of your way that you’re spending a lot more on gas.

8. Look for Hotels that Offer Free Breakfasts

If you’re comparing lodging options in a similar price and quality range, one way to save on hotel costs and on road trip expenses in general is to choose the hotel with a free breakfast.

Not only will you probably get a large, filling meal, but you might even be able to take a piece of fruit or cereal box as a snack for later on in the trip.

9. Pack Reusable Water Bottles for Everyone

You’ll no doubt get thirsty while driving and sightseeing, especially in summer, and buying water or drinks can put a major dent in your road trip budget.

Making sure everyone in the car has a large reusable water bottle (or two) to fill up at rest stops and in restaurants can help you avoid spending money on drinks, and also create less plastic waste.

10. Buy a National Park Pass

If you’re going to be road-tripping across the U.S. and visiting a few national parks, you may want to consider getting an America the Beautiful pass.

The pass (which costs $80 per year and $20 for seniors) covers entrance, standard amenity, and day use fees for a driver and all passengers in a personal vehicle (up to 4 adults) at more than 2,000 federal recreation sites.

Just remember that summer is primetime for many parks, from Yosemite in California to Acadia in Maine. If you need lodging, book early.

11. Hit the Grocery Store

Once you’ve run out of your cooler meals and snacks, consider re-stocking at a local grocery store while en route so you don’t have to resort to fast food or a pricey local restaurant for the rest of your trip.

This is also a good strategy if you’re going to be staying at a hotel for a few nights. Making good use of a hotel kitchenette and fridge can help you avoid having to eat out for every single meal.

12. Pre-Book Your Hotels

Spontaneity is great, but if you’re looking to save money on accommodations, it can be wiser to book ahead of time and stick to your plan. You can often secure a better rate by booking in advance (and online), than by showing up without a reservation or booking last minute.

13. Look Beyond Hotels

Your first thought when looking for roadside accommodation may be cheap hotels or motels. But you sometimes find a better deal (or a nicer option for the same price) using a home rental site, such as Airbnb, VRBO, or FlipKey, especially if you’re staying for more than one night.

When booking lodging, it can be smart to use a travel credit card or a cash back rewards credit card, since every swipe can help you earn points, miles, or cash back that you might apply to future trips.

14. Plan to Visit Free Attractions

Part of the fun of a road trip is to enjoy the journey and scenery while en route to your final destination.

As you travel (or before you go), you may want to research free attractions, such as a hike, walk on a beach, or a free museum, on your route for times when you need to stretch and take a driving break.

You can also look for festivals and local events by checking out the online events calendar for the towns you’ll be visiting that day. You might also check out Meetup.com and see what kinds of local groups are gathering for experiences and outings.

15. Plan Gas Stops in Advance

Getting stuck in a big city with the tank close to empty can be costly (and driving in circles looking for a gas station when you’re en route to the beach is no fun either). To avoid overpriced gas, you may want to use a gas app like Gas Guru or GasBuddy, which can help you compare prices and find affordable gas no matter where you are. This hack is an easy way to lower your gas costs.

16. Set a Daily Spending Limit

You can use your overall budget to get a rough idea of how much you can spend on the road trip each day. This can help you avoid blowing the money you’ve saved, wherever you may keep your travel fund, before the end of the trip.

A spending plan can also let you know when you can splurge a bit and when you’ll have to reign it in with a meal, activity, or lodging. You may also want to set aside some of your budget for the unexpected, such as the car getting a flat and needing to be towed, or discovering the cheap hotel you planned to stay in is actually a total dump. Also factor in some summer road-trip treats: You’re likely to be stopping for ice cream here and there and maybe even a lobster roll.

17. Entertain the Kids on the Cheap

Road trips can help you afford a family vacation since you sidestep pricey plane tickets. But remember that kids have a tendency to get bored, tired, and antsy on a road trip. To avoid giving in to impulse toy purchases, you may want to bring along their favorite toys and also pick up a variety of new ones at the dollar store before you leave.

Good choices include coloring books and games they can play in the car that won’t create a mess. You might also consider borrowing audio books or DVDs from the library to give yourself an hour or so of peace and quiet.

18. Search Online for Local Coupons and Passes

It can be worthwhile to research online coupons and discount codes for local attractions and restaurants at some of your scheduled stops.

Consider checking Groupon or LivingSocial for deals and steals. Sometimes booking online ahead of time saves you money, and it’ll give you a reason to try to reach a specific destination by a certain day.

19. Save on Alcohol

Sipping a cold beer or glass of wine at a local bar at the end of your long drive might sound like the perfect way to unwind.

But alcohol costs can quickly add up on a road trip vacation. Consider buying a few local beers or a small bottle of wine that’s native to that area to enjoy in your hotel room. You’ll save money on tipping too.

20. Volunteer at a Festival

Yes, you read that correctly. Some festivals and special events offer discounts or free admission to volunteers. You can look up events taking place in the town you’ll be visiting and reach out to the event organizer to see if they need help. Summer is full of events like these, from concerts to craft fairs to food festivals.

21. Sign up for a AAA Membership

An auto club like AAA can save you time, money, and hassle should you run into car trouble during your trip. What’s more, a membership (often starting at around $5 a month) gives you access to discounts at loads of hotels, restaurants, and many retailers nationwide.

22. Travel During the Off-Season

Yes, summer can be the most welcoming time of the year to hop behind the wheel. But visiting national parks when kids are back in school can often help save money on lodging and activities. Planning a road trip to a destination like Disney World or Disneyland? You’ll likely find better deals if it’s not during a spring break or other school vacation.

You can often also save money by visiting warm weather locations during “shoulder seasons.” This is the period in between a destination’s low and high seasons of tourism, when prices for hotels tend to be lower, and crowds tend to be smaller, at popular attractions.

23. Do Some Camping

Outdoorsy road trippers might enjoy setting up a tent at a free or low-cost public campsite. You can find out more on the Bureau of Land Management site.

This can end up saving you a lot of money on hotel costs, provided you don’t go out and buy a lot of expensive camping equipment.

If you don’t have any camping gear, you may want to consider renting equipment from an outdoor specialty store or asking a friend who regularly goes camping if you can borrow their equipment. As noted above, summer can be prime time for basking in some of America’s natural beauty, so book your campsite early.

24. Eat Out for Lunch Instead of Dinner

If there are special restaurants you want to try without breaking the bank, consider going there for lunch. You might get a slightly smaller portion than you would if you ordered it off the dinner menu, but the price will likely be more affordable.

25. Take Advantage of Loyalty Programs

Booking with the same hotel chain as often as possible and signing up for their member loyalty (or “points”) program may net you a free night after a few stays.

Travel booking services, such as Expedia, Travelocity, or Hotels.com, may also offer discounted rates and free nights for loyal customers.

Recommended: Getting the Most Out of Credit Card Rewards

The Takeaway

Planning a summer vacation? A car trip might sound much more affordable than traveling by plane. However, gas, food, and accommodations can add up.

One of the best ways to cut road trip expenses is to plan out your trip and research deals, coupons, and discounts ahead of time. Packing wisely and loading up on drinks, snacks, toys, and activities can also help cut costs once you’re out on the road.

Ready to start planning and saving for your next road trip? Consider signing up for a SoFi Checking and Savings® account.

SoFi Checking and Savings has a special “vaults” feature that allows you to separate your savings from your spending, while earning competitive annual percentage yield (APY) on all of your money and paying no account fees. You can even set up a separate vault for your travel fund.

SoFi Checking and Savings: The smart, simple way to save for your next trip.

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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

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Trying to sleep on an overnight flight can feel like a mission impossible, what with the noise, cramped quarters, uncomfortable seats, plus all those meal and beverage service interruptions. Lack of sleep on an all-night flight can leave you feeling drowsy, irritable, and lethargic upon arrival at your destination, which is not the way you want to start your trip.

Despite the inherent obstacles, you shouldn’t resign yourself to spending a long flight wide awake. There are hacks that can help you get some quality slumber on an overnight flight. Read on to learn:

•   The importance of getting sleep on an overnight flight

•   How to sleep well by choosing the right flight and seat

•   What you can do to prepare ahead of your flight

•   Things you can do to wind down and relax on your flight

Why It’s Important to Get Sleep on an Overnight Flight

When you get adequate sleep during the night, your brain and body rest and recover, allowing you to feel energized the next day. Without enough shut-eye, you’ll likely feel more physically, emotionally, and mentally tired.

In addition, lack of sleep on an overnight flight can contribute to jet lag, which typically happens when an individual travels east or west across three or more time zones.

•   Besides fatigue, symptoms of jet lag can include trouble processing information clearly, difficulty coping with change, having slower reaction times, and experiencing problems with balance and coordination.

•   Jet lag can impair your alertness, which can be dangerous if, for instance, you’re renting a car and will be driving right after your flight. It can also make you more vulnerable to pickpockets and scammers.

Recommended: Guide to Saving Money on Hotels for Your Next Vacation

Choosing the Best Flight and Seat

The timing of your flights and where you sit on the plane can play a key role in how well you sleep overnight. Certain departure times sync better with your body clock to make sleep come on a little easier. And some seats and areas of the plane work better for sleeping.

Here, consider these suggestions for when to take off and how to pick the prime seat for snoozing.

Timing Your Flight for Optimal Sleep

Our bodies have an internal clock, or “circadian rhythm,” that tells us when it’s time to sleep and wake up. Taking an overnight flight can disrupt your body’s natural cycle of wakefulness and sleep. For example, if you’re flying from New York City to Paris, which is six hours ahead, you’ll land when it’s already morning, but your body is telling you it’s still nighttime. Two points to keep in mind:

•   When it comes to taking an overnight flight, you’re working with your natural body clock instead of fighting against it. So go ahead and book that 9am vs. 4pm flight. At some point, you’re bound to get sleepy around your usual bedtime. Overnight flights can be better if you’re traveling with babies and children, since the flight coincides with their bedtime too.

•   You can also get more uninterrupted sleep by choosing a direct flight. Yes, it can be pricier, but having to switch flights in the middle of the night results in broken sleep, plus layovers can further mess up your internal clock.

Picking A Seat

Many airlines offer first class and business class red-eye passengers the most sleep-focused perks, such as extra leg room, more privacy, and seats that convert into beds. However, buying seats in these sections can be very expensive — thousands of dollars more than a seat in coach. If you don’t have that much money socked away in your travel fund, consider the following:

•   Do you have unused miles you’ve accrued by using an airline credit card? Now might be the time to cash in and use them for a first or business class seat or upgrade.

•   Consider if it’s worthwhile to charge an expensive and more comfortable seat and then have the credit card reward points to use as you see fit. Or you might opt for cash back.

•   If you purchase your ticket with a travel credit card or cash back rewards credit card, you might earn miles that you can use on future travel, which can help offset the expense.

If you choose to fly coach, there are ways to snagging the best type of seat in which you can doze off. Some tips:

•   Window seats tend to be best for sleeping. You can rest your head against the window or wall, and don’t have to deal with passengers waking you up as they climb over you to move around the cabin. Window seats also provide the most privacy and give you control of the window shade. Book early, as window seats are popular and tend to disappear quickly.

•   Your next choice might be to opt for an aisle, which can give you more room to stretch your legs. Beware of falling asleep that way, though; you’ll likely be woken up by flight attendants or fellow passengers who need to get by you.

•   Seats closer to the front of the plane are often quieter and make for a smoother ride. Sitting in the back of the plane doesn’t bode well for sleeping, especially if you’re in the last row in a seat with limited to no recline.

•   Another reason the rear of an aircraft is best avoided: It’s usually the location for the restroom, which can be noisy and have frequent passenger traffic.

•   Steer clear of a seat near the galley areas where flight attendants may be moving around at all hours.
Once you’re safely in the air and the seatbelt sign is turned off, look around to see if there are any free rows where three empty seats could give you the opportunity to lie down. Check in with the flight attendants to make sure it’s allowed and the seats don’t belong to anyone else.

Recommended: Credit Card Miles vs. Cash Back: Guide to Choosing

How to Prepare

Here’s some advice to help you fall and stay asleep on a long-haul overnight flight.

•   Adjust your sleep schedule before you leave. Begin to reset your body clock several days prior to your voyage. The Mayo Clinic suggests if you’re traveling east, go to bed one hour earlier each night for a few days before your trip. When heading west, hit the hay one hour later than usual for a couple of days.

•   Eat lightly and clean. Eating spicy, fatty, fried, or high-carb foods before the flight can leave you feeling too full and uncomfortable to sleep.

•   Make sure your seatbelt is visible. This will avoid sleep interruptions by flight attendants who may need passengers to put on their seatbelts during the flight. If you’re covering yourself with a blanket, fasten your seatbelt over it so there’s no need for flight staff to rouse you.

•   Skip caffeine and alcohol. Caffeinated and alcoholic beverages can interrupt sleep and dehydrate you. Instead, keep yourself hydrated by drinking H2O or herbal tea , such as chamomile, valerian root, or passionflower. Research has shown these can help you feel sleepy and improve sleep quality. (You might bring your own teabags and ask the flight attendants for hot water.)

•   Get some exercise that day. Physical activity can help improve sleep quality. Even walking around the airport before your flight counts.

•   Dress in comfortable layers. You never know what the cabin temperature might be, so it’s a good idea to layer up in case you get too hot or cold. Wearing cozy lounge-wear, versus skinny jeans, will up your comfort level so you can sleep better.

•   Take a sleep aid. Many people find taking a prescription or over-the-counter sleeping medication helps them sleep on a plane. One caveat: Both nonprescription and prescription sleeping pills can cause daytime grogginess. A safer option? Try taking melatonin supplements, a synthetic version of the natural hormone your body makes to produce sleepiness .

•   Use your tray table as a head rest. Some people find leaning over and resting their head on their tray table with a pillow makes it easier to get some sleep. This can be especially helpful if you’re in a middle or an aisle seat.

What to Bring for an Overnight Flight

Some airlines may give you a complimentary kit with toiletries and other items to make your night flight more comfortable. You might, however, want to put together your own in case you don’t get one or the airline’s kit doesn’t have everything you might need. Here are some suggested sleep-better items to pack in your carry-on:

•   Neck or travel pillow

•   Noise-canceling headphones or ear plugs

•   Eye mask

•   Cozy warm socks and slipon shoes

•   Blanket or wrap

•   Snacks in case you sleep through meal service or get hungry in between

When and How to Wind Down in the Air

Your pre-bed routine doesn’t have to fall to the wayside just because you’re flying. There are some things you can do during your journey to relax and encourage sleepiness:

•   Listen to calming music or a podcast

•   Engage in a relaxing activity such as reading a book, knitting, or breaking out a mini deck of cards to play Solitaire.

•   Avoid looking at screens and skip the inflight entertainment since exposure to blue light can interfere with sleep.

•   Don’t stress if sleep doesn’t happen. It can be difficult to sleep when you can’t get comfortable. Anxiety around traveling with pets and/or small children or just flying in general, can prevent you from relaxing. Instead, try to at least rest your eyes and do some deep breathing.

Recommended: How Families Can Afford to Travel

The Takeaway

No doubt about it, trying to snooze on an overnight flight can be downright challenging. Lack of sleep on a redeye can result in physical and mental exhaustion, which isn’t the best way to kick off your travels. Fortunately, by booking certain seats and following a few steps, you can likely get the in-flight rest you need to help make you feel alert and ready to roll once you touch down.

Whether you want to travel more or get a better ROI for your travel dollar, SoFi can help. SoFi Travel is a new service exclusively for SoFi members that lets you budget, plan, and book your next trip in a convenient one-stop shop. SoFi takes the guessing game out of how much you can afford for that honeymoon, family vacation, or quick getaway — and we help you save too.

SoFi Travel can take you farther.

FAQ

Should I pull an all-nighter to sleep on a plane?

No. Getting on a night flight already sleep-deprived doesn’t guarantee you’re going to sleep well on the plane. It’s also counterproductive. If you haven’t slept the night before, you’ll most likely be struggling to stay awake when you need to get things done on your travel day.

How many hours should you wake up before you land?

Plan to set your alarm so you can wake up somewhere between 45 minutes to an hour before landing. Since waking up on a plane can be disorienting, it’s important to have some time to become fully alert before you disembark.

Is jet lag easier flying east or west?

It’s easier to deal with jet lag when you’re flying west than east. When you fly east, you “lose” time as opposed to flying west when you “gain” time. It’s believed your body can adapt more quickly to staying up late than going to sleep earlier.

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Photo credit: iStock/Meinzahn

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You have likely heard the term “all-inclusive resort” when researching vacation ideas and know that some of the most popular ones are located in the Caribbean. And for good reason: Stunning turquoise water, miles of sandy beaches, brilliant sunshine, and loads of fresh-caught fish are big draws.

But are all-inclusives all they’re cracked up to be? Some people prefer a more authentic experience when traveling, and more upscale cuisine. Pools, parties, and group activities can be fun in moderation, but sometimes you just want peace and quiet.

Here, you’ll learn more about staying at an all-inclusive Caribbean resort, including such factors as:

•   What do all-inclusive resorts actually include?

•   How much do all-inclusive resorts cost?

•   What are the pros and cons of all-inclusive Caribbean resorts?

What Do All-Inclusive Resorts Include?

What all-inclusive resorts include varies by property, but they generally include:

•   The price of the hotel room

•   All food, snacks, and beverages

•   Most likely alcoholic beverages, though they may include only certain brands of alcohol

•   Possibly room-service meals

•   Entertainment, activities (including water sports like kayaking), and kids’ camp, depending on the resort

•   Taxes and tips

•   Possibly airport transfers

All-inclusive resorts usually don’t include the cost of excursions, but some may have activities included for free. They don’t include extras like renting a car for a day trip.

How Much Do All-Inclusive Resorts Cost?

You pay for an all-inclusive vacation upfront based on the number of nights you’re staying and the number of people in your party. Prices usually start at about $200 a night per person, with some properties costing much more, especially during peak time like winter (in the hot Caribbean, summer travel is considered off-season).

You may want to bring extra cash to tip staff, like bartenders, waiters, and housekeeping. Even if gratuities are included in the price of your stay, there may be times that you want to thank a staff member for helping you out.

Types of All-Inclusive Resorts

There are many different types of all-inclusive resorts. There are all-inclusive resorts that are meant for singles, couples, couples on their honeymoon, adults-only, families, and groups. There are even some pet-friendly all-inclusive resorts, if you like traveling with pets.

Some of the brands you may hear mentioned are Beaches, Breezes, Riu Palace, and Sandals, among others. The best all-inclusive Caribbean resorts for you will depend on the location you’re seeking, the kind of accommodations, and amenities that suit you, and of course the price tag.

Pros of All-Inclusive Caribbean Resorts

All-inclusive Caribbean resorts definitely have their advantages. Here are a few of the upsides:

Good Value

If you typically spend a lot on food and beverages on vacations, an all-inclusive resort can actually provide good value. Drinks in particular can add up quickly. So if you like to indulge in big meals and lots of cocktails while on vacay, you can really “get your money’s worth” (though it may not be the best for your health).

Live the Caribbean Dream

If you have always dreamed of relaxing on a beach in the Caribbean, an all-inclusive Caribbean resort can be an easy way to achieve that dream. All-inclusive Caribbean resorts are engineered to please tourists’ every whim, so they likely have almost anything you want on your vacation.

Low Stress

All-inclusive vacations can be appealing to those who want a relaxing vacation without having to do much planning. You don’t have to search out restaurants, beaches, or activities; everything is ready and waiting for you.

24-Hour Service

At an all-inclusive resort, you usually have staff on call 24/7 to assist you. Plenty of staff members are available to bring you a drink or room service, answer any questions, and help with special requests.

Cost Is Predetermined

When you book an all-inclusive vacation, you typically have to pay ahead of time. You will know exactly how much your vacation will cost you, unlike a typical vacation, where you may not know the cost of food, drinks, attractions, and more until your credit card bill arrives. Plus, since you have already paid for the vacation, it may make you more relaxed on the actual vacation, since you don’t have to worry about how much you’re spending.

Recommended: Where to Find Book Now, Pay Later Vacations

Cons of All-Inclusive Caribbean Resorts

All-inclusive Caribbean resorts may not be the best option for everyone. Some of the cons to consider before booking include the following:

Inauthentic Version of Local Culture

When you stay at an all-inclusive resort, you may rarely or never leave the resort. Because of this, you won’t experience the true local culture or cuisine of wherever you’re staying. Appreciating other cultures is a major component of travel for many people, which is why they may dislike all-inclusive resorts.

Food Can Be Mediocre

The food at all-inclusive resorts can vary. Some guests may find it to be mediocre, depending on the particular property. Since these resorts have to feed a lot of people (who are not paying extra for food), the food options may be cheaper, blander, and less distinctive than you would find at a local restaurant. You also may not get to experience a variety of options, since you have the same restaurants to choose from every day.

Potential Crowds

All-inclusive Caribbean resorts can get crowded. You may have trouble finding a chair by the pool or beach. Activities could be at capacity. If you go to the restaurants during the popular mealtimes, you may have to wait for a table or have slower service. (One hack for that: Consider booking dinner reservations ahead of time.)

You Can’t Cut Costs

All-inclusive resorts are like a package: You pay one price for everything. With other types of vacations, you can cut costs by eating at less expensive restaurants, cooking meals, or picnicking. You might also opt for less pricey lodging (if you know how to save money on hotels) or skip renting a car and use public transportation instead.

These are some examples of how families afford to travel. However, with an all-inclusive vacation, you have to pay the price they quote you.

Tips for Staying at an All-Inclusive Resort

If you do plan to stay at an all-inclusive Caribbean resort, here are some tips to make your vacation as enjoyable and affordable as possible:

•   When booking an all-inclusive resort, the dates will have an impact on the nightly rate. If you’re able to, travel during the off-season, like fall or spring, to save money.

•   Some all-inclusive resorts are bookable using credit card rewards. If you have a travel credit card that lets you transfer points to hotel chains with all-inclusive resorts, this could be a way to save money and use points instead.

•   Before booking a vacation, including an all-inclusive resort, you may want to consider travel insurance to protect your investment in your vacation in case something goes wrong. If you have a travel credit card, make sure you understand how credit card travel insurance works. That could be a way to get coverage.

Recommended: How to Choose Between Credit Card Miles vs. Cash Back

The Takeaway

All-inclusive Caribbean resorts have their pros and cons. Some people love them: These destinations can be relaxing and low-stress and provide good value. Others may find them crowded, with mediocre food, and they don’t allow you to cut costs. Weighing the upsides vs. the downsides should allow you to decide if an all-inclusive resort is the right way for you to make your Caribbean dream come true.

Whether you want to travel more or get a better ROI for your travel dollar, SoFi can help. SoFi Travel is a new service exclusively for SoFi members that lets you budget, plan, and book your next trip in a convenient one-stop shop. SoFi takes the guessing game out of how much you can afford for that honeymoon, family vacation, or quick getaway — and we help you save too.

SoFi Travel can take you farther.

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Employee stock options (ESOs) and restricted stock units (RSUs) are two different types of equity compensation. An employee stock option gives an employee the option to buy company stock at a certain price, by a certain date. By contrast, an RSU is the promise that on a future date the employee will receive actual company stock.

Sometimes, employees get a choice between ESOs and RSUs. Understanding how each stock plan works, how they differ — particularly when it comes to vesting schedules and taxes — can help you make a decision that best aligns with your financial goals.

What Are Employee Stock Options (ESOs)?

Employee stock options (ESOs) give an employee the right to purchase their company’s stock at a set price — called the exercise, grant, or strike price — by a certain date, assuming certain terms are met, usually according to a vesting schedule.

If the employee doesn’t exercise their options within that period, they expire.

Companies may offer stock options to employees as part of a compensation plan, in addition to salary, 401(k) matching funds, and other benefits. ESOs are considered an incentive to help the company succeed, so that (ideally) the stock options are worth more when the employee chooses to exercise them.

In an ideal scenario, exercising stock options allows an employee to purchase shares of their company’s stock at an exercise price lower than the current market price — and realize a profit.

Note that while some of the terminology used with regard to employee stock options may sound similar to standard stock options, don’t get the two confused. Options are derivatives traded based on the value of underlying securities, e.g. stocks, bonds, ETFs.

How do ESOs Work?

Generally, ESOs operate in four stages — starting with the grant date and ending with the exercise date, i.e. actually buying the stock.

1. The grant date

This is the official start date of an ESO contract. You receive information about how many shares you’ll be issued, the strike price (or exercise price) for those shares, the vesting schedule, and any requirements that must be met along the way.

2. The cliff

If a compensation package includes ESOs, they’re generally not available on day one. Contracts often include requirements that must be met first, such as working full time for at least a year.

Those 12 months when you are not yet eligible to exercise your employee stock options is called the cliff. If you remain an employee past the cliff date, you get to level up to the vesting period.

Some companies include a 12-month cliff to incentivize employees to stay at least a year. Other companies may have a vesting schedule.

3. The vest

The vesting period is when you start to take ownership of your options and the right to exercise them. Vesting can either happen all at once or take place after a cliff (as noted above), or gradually over several years, depending on your company’s plan.

One common vesting schedule is a one-year cliff followed by a four-year vest. On this timeline, you’re 0% vested the first year (meaning you aren’t eligible for any options), 25% vested at the two-year mark (you can exercise up to 25% of the total options granted), and so on until you own 100% of your options. At that point, you’re considered fully vested.

4. The exercise

This is when you pull the financial trigger and actually purchase some or all of your vested shares.

ESO’s Expiration Date

While the expiration date of stock options isn’t always front and center, it’s important to bear in mind. The strike price you’re given as part of your options package expires on a certain date if you don’t exercise your shares.

One common timeline is 10 years from grant date to expiration date, but specific terms will be in the contract, and it’s important to vet the timing of your ESOs — as part of your career as well as your tax and your long-term financial plan. Again, if you let your stock options expire, you lose the right to buy shares at that price.

Pros and Cons of Employee Stock Options (ESOs)

If you land a job with the right company and stay until you’re fully vested, exercising your employee stock options could potentially lead to gains.

For example, if your strike price is $30 per share, and at the time of vesting the stock is trading at $100 or more per share, you’re getting a great deal on shares.

On the other hand, if your strike price is $30 per share and the company is trading at $10 per share, you might be better off not exercising your employee stock options until the price goes up (when and if it does; there are no guarantees).

That’s why ESOs are considered a form of employee incentive: You may work harder to help the company grow, if you know your efforts could translate to a bigger stock price.

Tax Implications of Employee Stock Options

Given that stock options can generate gains, it’s important to know how they are taxed so you can plan accordingly.

Generally speaking, employers offer two types of stock options: nonqualified stock options (NSOs or NQSOs) and incentive stock options (ISOs).

Nonqualified Stock Options

NSOs are the most common and often the type offered to the general workforce. NSOs have a less favorable tax treatment, because they’re subject to ordinary income tax on the difference between the exercise price and the market price at the time you exercise your options and purchase the stock.

NSOs are then taxed again at the capital gains rate when you sell the shares.

Your individual circumstances, tax filing status, and the terms of your stock options may also play into how you’re taxed, so you may want to consult a professional.

Incentive Stock Options

ISOs are “qualified,” meaning you don’t pay any taxes when you exercise the options — unless you’re subject to the alternative minimum tax (AMT).

You will owe taxes, however, if you sell them at a profit later on. (If you don’t sell, and if the stocks gain or lose value, those are considered unrealized gains and losses.) Any money you make when you sell your shares later would be subject to capital gains tax. If you hold your shares less than a year, the short-term capital gains tax rate equals your ordinary income tax rate, which could be up to 37% for the highest tax bracket.

For assets held longer than a year, the long-term rate is lower: 0%, 15%, or 20%, depending on your taxable income and filing status.

What Are Restricted Stock Units (RSUs)?

Restricted stock units, or RSUs, simply grant employees a certain number of shares stock by a certain date. When employees are granted RSUs, the company holds onto the shares until they’re fully vested.

The company determines the vesting criteria — it can be a time period of several years, a key revenue milestone, and/or personal performance goals. Like ESOs, RSUs can vest gradually or all at once. When the employee gets their shares, they own them outright; employees don’t have to buy RSUs.

How Do Restricted Stock Units (RSUs) Work?

RSUs are priced based on the fair market value of the stock on the day they vest, or the settlement date. The company stocks you receive from your company will be worth just as much as they would be if you purchased them on your own that same day.

If the stock is worth $40 per share, and you have 100 shares, you would get $4,000 worth of shares (assuming you’re fully vested and have met other terms).

Again, the main difference between stock options and restricted stock units is that you don’t have to purchase RSUs.

As long as the company’s common stock holds value, so do your RSUs. Upon vesting, you can either keep your RSUs in the form of actual shares, or sell them immediately to take the cash equivalent. Either way, the RSUs you receive will be taxed as income.

And, of course, if you later sell your shares you may realize a gain or a loss and there will be tax implications accordingly.

Pros and Cons of Restricted Stock Units (RSUs)

One good thing about RSUs, similar to ESOs, is the incentive to stay with the company for a longer period of time. If your company grows during your vesting period, you could see a substantial windfall when your settlement date rolls around.

But even if the stock falls to a penny per share, the shares still awarded to you on your settlement date. Since you don’t have to pay for them, it’s still money in your pocket.

In fact, you may only lose out on money with RSUs if you leave the company and have to forfeit any units that aren’t already vested, or if the company goes out of business.

Tax Implications of RSUs

When your RSU shares or cash equivalent are automatically delivered to you on your settlement date(s), they’re considered ordinary income and are taxed accordingly. In fact, your RSU distributions are actually added to your W-2.

For some people, the additional RSU income may bump them up a tax bracket (or two). In those cases, if you’ve been withholding at a lower tax bracket before your vesting period, you could owe the IRS more money.

As with ESOs, if you sell your shares at a later date and make a profit, you’ll be subject to capital gains taxes.

	ESOs	RSUs
Definition	An employee can buy company stock at a set price at a certain date in the future.	An employee receives stock at a date in the future (does not have to purchase them).
Pricing	The strike price is set when ESOs are offered to an employee, and they pay that price when they exercise their shares.	The share price is based on the fair market value of the stock on the day the shares vest, and employees get the full-value shares.
Tax implications	The difference between the strike price and the stock’s value on exercise is considered earned income and added to your W-2, where it’s taxed as income. If you sell your shares later at a profit, you may also be subject to capital gains tax.	RSU shares (or cash equivalent) are considered ordinary income as soon as they are vested, and are taxed accordingly. If you sell the shares later, capital gains tax rules would apply.

The Takeaway

Employee stock options (ESOs) and restricted stock units (RSUs) are two different types of equity or share-based compensation, and they each have their pros and cons.

An employee stock option gives an employee the option to buy company stock at a certain price, by a certain date. An RSU is the promise that on a future date the employee will receive actual company stock (without having to purchase the shares).

Because these types of compensation are often considered incentives, they’re designed to encourage employees to stay with the company for a certain amount of time. As such, employees often don’t get their options (in the case of ESOs) or the actual shares (in the case of RSUs) until certain terms are met. There may be a vesting schedule or company benchmarks or other terms.

Having the option to own stock in your employer company has the potential to provide attractive financial benefits, especially if you believe in the company and its future. This belief in a company’s growth potential is what may drive investors to buy a company’s stock, even if they don’t work there.

If you’re interested in owning and trading stock, it’s easy when you set up an Active Invest account with SoFi Invest®. Members can trade stocks and ETFs.

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

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