Travel is one of life’s great pleasures, but can be a major barrier to building long term wealth. There’s a lot to get excited about in new destinations, exotic foods, and breathtaking sights. But if you’re not careful, travel can quickly become an obstacle to reaching your financial goals. There are many travel related mistakes made by many people that can derail their efforts of wealth building without them even knowing it.
If you can recognize common travel mistakes that most people make and take a few simple steps to avoid them, you can do something to mitigate the risk of enjoyment of the world and fulfilling your financial future.
Not Having a Plan in Place for Travel Costs
Spontaneous getaways can be a lot of fun, but they generally have a hefty price attached. It’s easy to blow through your flight, accommodation, and activities budget without a clear budget or plan, making travel expensive. Book when you see a deal but instead of traveling on a whim, research deals, set a budget and book in advance. Careful planning of your trips means you can save up first, and not have to worry about the financial blow that comes with unexpected expenses.
Ignoring Travel Rewards and Loyalty Programs
Airlines, hotels and credit cards offer many travelers the benefits of loyalty programs that are often overlooked. If you don’t sign up for these programs, you’re missing out on money. Loyalty programs can save you money whether it’s points that can be redeemed for free flights or hotel stays, or cashback bonuses for everyday spending. Take full advantage of them and watch how your savings grow over time.
Underestimating the Importance of Travel Insurance
Travel insurance might seem a little too unnecessary, but if something does go wrong, it could save you thousands of dollars. These medical emergencies, or flight cancellations, or lost luggage can be costly. Travel insurance protects you, so you don’t have to worry about financial setbacks. Without it, even a small hiccup can cost you financially for the rest of your trip.
Expensive Accommodation
Luxury hotels can be awfully tempting but they’re also awfully pricey. Instead of the most expensive accommodation, you can book other options for example Airbnb, hostels or house sitting. With these options, you can actually live comfortably and not have to kill your budget traveling just for you to be able to enjoy your travels.
Skipping the Local Costs Research
Before you go on a trip, find out how much it costs to live at your destination. Often, many travelers are surprised at the high costs of food, transportation, or activities in some places. Being prepared will help you stretch your travel dollars whether it’s knowing where to get a cheap local meal or how to use public transportation effectively.
Overindulging in Souvenirs
Travel souvenirs are part of the experience, but additionally are also able to incur unnecessary expenditure upon your wallet. It’s tempting to buy something from every destination, but these purchases can quickly add up. Instead, try to think of things that are experiences, or that can be photos of, or things that are tangible in a small, meaningful way that won’t break the bank. Not only will you save money but you will also prevent clutter when you come back home.
Failing to Consider a Frequent Traveler’s Long Term Cost
Travel is wonderful, but constantly flying off on a plane and visiting new places starts getting expensive in the end. Trips that are frequent (especially if they’re luxurious) can drain your savings. You should make a calculation to see if or not your travels are frequent enough to match to your longer term financial objectives. If you want to stay on track for long term wealth, then limiting your trips or choosing more budget friendly travel options will do the trick.
Not Setting a Travel Fund
The mistake many people make is that they dip into their regular savings or emergency fund to pay for travel. It can actually make it harder for you to deal with unexpected financial situations. Instead, make a separate travel fund, to which you keep contributing regularly. That way, when it’s time for your next trip, you won’t have to give up your financial security or your long term goals.
Expensive Destinations Without Considering Alternatives
Popular cities, remote islands, or whatever other destination you choose to go to can come at a high price. These places may be beautiful, but they can be expensive. Rather than choosing the most prominent, much sought out places as your next holiday destination, look into something off the beaten path for a similar experience at a much lower cost. Quite often you can find a less well known spot where you can have a more authentic, less expensive travel experience.
Travel Deals Missed During Seasons
Getting your travel timing right can save you money big time. Costs skyrocket during the holidays and high season. Consider traveling during the shoulder seasons or off peak months when flights and accommodations aren’t quite as expensive. During these seasonal discounts, if you take advantage, you’d be closer to getting the right of making the most out of your travels while not exceeding your budget too much.
Activities and Tours Over Booking
When you travel, it’s easy to get excited and book a bunch of activities in advance. But overbooking gets you into a really, really heavy jam; a really packed schedule that causes extra stress and cost too. Rather than attempting to do everything at once, learn to enjoy every experience and learn to make decisions on the fly. This gives you more flexibility and can save you money if you don’t like the activity.
Not Having a Plan for Getting Back to Work
Jumping back into work after a great vacation without a clear plan is financially draining. If you end up paying for extra days off, or you come back to work feeling burnt out, that’s going to impact your productivity and your future earnings. By planning ahead, you check in with your worklife before you go, so you aren’t starting back from too far behind and you are not giving up opportunities to earn by taking too many days off in a bunch.
Traveling Too Much on Credit Cards
Credit cards may be convenient and rewarding, but if you use them too much during travel, you can rack up high interest debt when you come home. If you’re not paying off your credit card balance right after hand, your entire trip can quickly become much more expensive than it had to be with all the interest charges added in. If possible, use cash or a debit card for spending, not credit to keep a better eye on how much you are spending while away, and save credit cards for emergency situations or for use when otherwise needed.
Disclaimer: This list is solely the author’s opinion based on research and publicly available information.
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