If you’re like most Americans, you’re looking forward to a well-earned vacation, especially as travel continues to come back from the pandemic. The percentage of Americans planning to travel at least once in summer 2023 rose to nearly 85%, compared to 80% in summer 2022, according to the Vacationer Summer Travel Survey.
That’s despite the fact that our travel dollars don’t go as far as they used to: Inflation has added significantly to travel costs. What’s more, many Americans are relying on credit card debt to make ends meet, and that can mean adding vacation expenses to their balances. So how can we weigh our desire for travel versus the need to stay on track with our finances, including savings?
“Logically, people know when they can’t afford something,” says Brian Walsh, senior manager of financial planning at SoFi. “But they still don’t always make the best decisions. The key is, how do you limit your spending?”
One answer: careful planning. If you approach your vacation strategically, you may be able to enjoy a getaway without jeopardizing your finances. Here, we’ll look at creative ways to fund your travel, along with plenty of cost-saving tips that can help you combat the urge to overspend.
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How Much Does the Average Vacation Cost?
Travel can mean anything from a budget road trip to a grand tour around the world, so vacation costs naturally vary widely. According to Destination Analysts’ State of American Travel survey of more than 4,000 American adults, heading into spring 2023, the average annual travel budget among respondents was expected to be $4,677.
The survey also found that respondents planned to prioritize travel in the coming months over home improvements, clothing, entertainment, and dining out.
Of course, averages don’t necessarily tell your story. How much you’ll spend on your next vacation depends on where you’re going, how you’re getting there, and for families, how many people are traveling.
Recommended: How Families Can Afford to Travel
How Much Should You Be Saving?
As you try to balance the urge to get away and your need to save, “you’ll want to assess your total financial picture to determine how much flexibility you have for travel,” Walsh says.
Ask yourself the following questions:
• Do I have enough in my emergency fund? (Ideally, three to six months of living expenses in case of a job loss or other sudden event.)
• Do I have high-interest debt that’s weighing me down?
• Am I saving enough for retirement?
These are the three areas that should be a savings priority before you budget for travel. When you can check off these boxes, you’re likely ready to hit the road, says Walsh. That is, he adds, if you have enough in your savings to pay for a vacation without going into massive credit card debt.
Recommended: Where to Find Book Now, Pay Later Vacations
6 Ways to Pay for Travel Without Sabotaging Your Savings
Finding ways to pay for airfares, hotels, and other costs that won’t deplete your savings or rack up credit card debt can help you keep your finances intact. Here are some ideas to consider.
1. Rent or Swap Your Space
If you can rent your apartment or home to other vacationers, you can use that money to pay for your lodging elsewhere. Or consider swapping homes with someone in your desired destination who’s planning on visiting your hometown.
Check with friends or family in or near your destination for the easiest swaps. Exchange sites such as Homestay and Home Exchanges can facilitate swaps, but may also list homes to rent, usually at much lower rates than hotels. Either way, it can mean saving a huge amount on lodging.
If you find someone to rent or swap and they don’t mind feeding your cat, picking up your mail, or watering your plants, you’ll save on the cost of a local pet or house sitter too.
2. Housesit or Pet Sit
By the same token, you may be able to find free or low-cost lodging by offering your services as a pet sitter or house sitter. Again, you’ll want to check with friends, family, and acquaintances. For a fee, you may also find opportunities in the U.S. and abroad on sites like Nomador and Mind My House.
Recommended: 25 Tips to Cut Costs When Traveling With Pets
3. Pick Up a Side Gig
Consider freelance professional work, rideshare driving, handyperson jobs, or other side gigs that can help fund your family vacation. This takes advance planning, but can be well worth the financial peace of mind. Consider offering your services through your neighborhood online classifieds, which are often free, or on for-fee platforms like Upwork.
You may want to put the extra cash in a designated savings account earmarked specifically for travel. That way you won’t inadvertently spend the money on other things.
4. Declutter and Earn Extra Money
How can spring cleaning benefit your summer vacation? Declutter your garage, basement, and attic by selling unwanted items and put that money toward your next vacation. You may be surprised at how much you can earn this way. Plus, you get a cleaner house!
5. Extend a Business Trip
If you can stay a few days extra after a conference or other business trip in an attractive destination, you’ll be reimbursed for at least one airfare and partial lodging costs, depending on the circumstances. In many cases, that can tip the scales so you can afford your getaway without financial stress.
6. Cut Back on Other Spending
Rejiggering your discretionary spending priorities may be all you need to take a debt-free vacation. Look closely at your spending on entertainment, meals out, hobbies, and other nonessential expenses. Are there places you can cut back to make room for travel expenses?
After your trip, you can reinstate your original budgets. Then again, you might discover you’ll enjoy a weekend getaway more than a new pair of boots.
4 Ways to Save on Travel Costs
Budget travel can be just as relaxing and reviving as a luxury trip. But it helps to learn a few tricks for reining in costs.
1. Be Flexible
Flexible plans can save you a bundle on travel expenses. Avoid peak travel times such as holidays, spring break, and high summer to save money on lodging, airfare, and more. Keep in mind, off season doesn’t have to mean the Bahamas in the heart of hurricane season. Traveling just a few days or weeks on either side of the rush can translate to significantly lower costs.
If you live near multiple airports, being flexible about where you fly from can also pay off. Walsh, who lives in Grand Rapids, MI, is about a two-hour drive from both Chicago and Detroit airports. For a recent vacation, he was able to save $1,000 on airfare by flying out of Chicago, a savings that more than made up for the gas and parking fees he paid to drive there.
You’ll also want to evaluate your departure times. Flying or driving early in the morning means you’ll likely have the better part of the day at your destination and save yourself a night’s hotel stay. With airlines, first and last flights of the day are often sold at a discount compared to late morning or afternoon flights.
Being willing to commute a bit on your trip is another good way to save, especially if you have a car or you’re in a spot with good mass transit. Hotels located on the outskirts of town or in the suburbs are often much less expensive than their downtown counterparts.
2. Compare Prices at Discount Travel Sites
Online travel agents and travel websites like Priceline, Expedia, Kayak, and Orbitz offer discounted airfares, hotels, and rental cars for thousands of locations. But rates vary widely among the sites, so you’ll want to look at several of them to find the lowest price. And restrictions may apply, such as no refunds or no date changes.
3. Track Prices
If you’re in the beginning stages of planning your trip and choosing between destinations, consider using apps such as Hopper, Skyscanner, or FareDrop to monitor airfares. Just plug in your departure airport(s) and the dates you want to travel, and the apps will send notifications when flight prices to those destinations drop.
Rebookey works the same way for hotels. It will periodically check to see if specific hotel rates fall. If you book a refundable hotel rate that allows you to cancel at any time, and the rate you book drops, you can rebook your reservation at the lower rate, then cancel the original.
4. Use Rewards and Cash Back
If you have an airline credit card or travel credit card, you already know that using points for airfares, hotels, and car rentals is one of the best ways to cut the cost of your trip. Plus, your card may provide valuable trip insurance to protect you from losing money if your plans go sideways.
Don’t forget any hotel loyalty programs you may belong to. Check for member discounts at properties in or near your destination.
If you have a cash-back credit card, you may have enough in the “bank” to cover some of your travel costs. At the very least, if you use your cash-back card to pay for all or part of your trip, you can start earning money toward your next vacation.
Recommended: Guide to Choosing Between Cash Back and Travel Rewards
Indulging the urge to travel while honoring the need to save can be a challenge. It’s important to assess your total financial picture in order to determine how much discretionary income you have to spend on travel. Finding ways to pay for travel that won’t jeopardize your savings — like home swapping — can also help balance these two priorities. Finally, being flexible so you can find the best deals on airfare, lodging, and other travel costs can help make your trip more affordable.
SoFi Travel is a new service exclusively for SoFi members. Through a partnership with Expedia, we make it easy to find the lowest rates and book your reservations — for flights, hotel rooms, car rentals, and more — all in one place. Earn 2x rewards when booking with your SoFi Mastercard or debit card. And when you redeem your SoFi rewards for travel, you get a 25% bonus: $100 of reward points are worth $125.
How can I balance travel with saving?
If you have three important financial building blocks in place — emergency savings, no or low credit card debt, and regular retirement savings contributions — you likely will find you have the discretionary funds to travel, especially if you plan your trip strategically to find the best deals.
Should I pay for my vacation with my credit card?
Paying for at least some of your travel costs with a credit card is just about inevitable. And paying with a cash-back or travel-rewards card can help you earn money or rewards for your next trip. What you want to avoid, however, is racking up massive credit card debt that will jeopardize your financial stability.
What are some good ways to save on travel costs?
Avoiding travel during peak times such as holidays, major events, and school vacations can be a great way to find deals. Renting or swapping your home, lodging off the beaten path, and using credit card and loyalty program rewards also help. Careful shopping, including using discount travel sites and fare tracking apps can take some time, but often pays off in big savings.
Photo credit: iStock/AndreyPopov
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