Spending on vacation can quickly get out of control especially if you are not monitoring the cash leaping out of your wallet for meals, souvenirs, ground transportation, etc.  And if you are anything like me, then the last thing you want to think about while relaxing on vacation is active budget management.  That’s why this week, I am sharing some simple strategies to avoid overspending on vacation.

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Let’s get into it!  Here is a list of 3 strategies that you can put in place to help you avoid overspending on your future trips.

RESOURCES MENTIONED IN THIS BLOG POST

• Travel Becomes Me One Week Guide to Travel Budgeting
• Prepaid Travel Cards: The Good, the Bad and the Ugly
• VACATION OVERSPENDING STRATEGY # 1:  Set-Up Spending Alerts/Notifications  

  Saving in a Separate Travel Account is not only good for making sure you have specific funds allocated for vacation.  One of the greatest gifts that your travel account can give you is being able to keep track of your spending of funds designated specifically for vacations.  My favorite way to do this is to set up alerts or notifications when certain events occur.  For example, if you want to know when you have used 50% of your budget, then you set an alert for when your account has dropped below 50% of the vacation starting point.  Many banks will allow you to set multiple alerts so you can keep track of spending at multiple levels (50%, 75%, 80%, etc).

  PRO TRAVELER TIP: Don’t forget that if you are going to use a debit card overseas.  Try to use one that reimburses you for ATM charges and charges no foreign transaction fees (like the Schwab Bank High Yield Investor Checking^® Account from Charles Schwab.)

  One last thing before we move to the next topic, some credit card companies allow you to set up spending alerts too. So if you tend to spend with credits cards (to get those travel rewards points), this strategy will work for you too!  If you want to be about that traveling on points life too, you should check the Points Earning Projection Mini-Course. Use the coupon code “OVERSPEND” to get 50% off.
  
  

  

  VACATION OVERSPENDING STRATEGY # 2: Prepaid Travel Cards

  Prepaid travel cards can be the perfect tool for those who like to avoid accessing their bank accounts while overseas and like the structure of having a hard limit rather than a warning that a budget is about to be exhausted.  With a prepaid travel card, you load your entire trip budget on your card and use that card for your travel related spending.  There are some things that you should consider and be mindful of when using prepaid travel cards.  You can read all about them in blog post on that topic here.

  VACATION OVERSPENDING STRATEGY # 3:  Have a travel budget and a contingency fund

  Before boarding your plane you should have a sense of how much you want to spend on flights, hotels, ground transport, food, tours and souvenirs.  A good way to determine what is a good budget is to see how much you generally spend on trips by reviewing your trip expenses from the last 2 or 3 trips.  Alternatively, you can calculate your budget by calculating the cost of your hotel and flight and then adding an additional 20% of that amount to your budget to cover ground transportation, food, tours and souvenirs. 

  In any event, after calculating your base budget, you should always add a 15% contingency fund.  A contingency fund is extra funds for your vacation that should only be used if you have an emergency while on vacation or if there is a once in a lifetime experience or souvenir that is way too good to pass up.  

  Need more help putting together a travel budget (including learning how to factor in non-cash Resources into your budget)?  Check out the Travel Becomes Me One-Week Guide to Travel Budgeting.

  RECAP:  Here is a quick recap of 3 strategies you can use to avoid overspending:

  1. Set-Up Alerts/Notifications with your Bank or Credit Card Company so you can monitor when you have crossed the threshold
  2. Use a Prepaid Travel Card to set limits on how much you are able to spend.
  3. Have a Travel Budget and a Contingency Fund to put a limit of expected and unexpected expenses

  What about you? How do you avoid overspending while on vacation?

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