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Financial Considerations When Planning an Extended Vacation

| May 23, 2018
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Many people have a “bucket list” of destinations they would like to visit in their lifetime. Some of these trips may require more than a few days or a week to fully experience. Whether you want to spend a month traveling across Asia or take a few weeks off to visit U.S. national parks, it can be critical to take extra financial precautions so you relax while you’re out – and return free of additional money hassles. Consider these tips before planning your next extended trip.

Choose On- or Off-Season Destinations

The first step is a fun one: Where do you want to go and when? Conduct some online research about a few “dream” destinations to get a general idea of costs for different times of year. Popular spots often offer discounts during “off-season” for cost-conscious travelers. If your schedule and desired activities will place you in the high season, be sure to budget accordingly.

Create a Budget

After selecting your destination, estimate costs for airfare, travel insurance, transportation, lodging, food, day tours and attractions for your selected timeframe, and create a savings goal. Depending on the location and how long you choose to stay, expenses can vary drastically.

Depending on where you choose to go and for how long, you will mostly likely incur additional miscellaneous expenses. Vaccinations, new luggage, passport renewals, childcare, housesitting, pet sitting, and more could be required. Build these costs into your budget so you aren’t surprised if they come up. 

And perhaps most important, don’t attempt to keep track of your travel budget in your head. There are simply too many moving parts. Write down your projected expenses and monthly savings goals as far in advance as possible. Add to these lists as more ideas and costs pop up. A comprehensive tally of all expenses – ahead of time – will help you determine what you can and can’t afford while traveling.   

A financial planner can also help you map out a realistic plan to pay for the trip in your chosen timeline, or help you rework your goals if needed.

Consider the Foreign Exchange Rate

When creating your budget, remember that the currency conversion rate may vary. You may need to increase your budget if the U.S. dollar is worth less than the local currency in your destination. Our team is well-versed in international travel planning and can provide insight into exchange rates and saving for vacations all over the world.

While you are on your trip, it may be helpful to install a currency conversion app on your phone to help you figure out how much things cost in U.S. dollars.

Avoid ATM and Credit Card Fees

While small fees for international transactions don’t seem like much, they can add up quickly. Consider opening a bank account with an institution that does not charge fees for using out of network ATMs, especially for international travel. Doing so will allow you to conveniently withdraw the local currency while you are out and about.

It’s also a good idea to have a travel credit card, as they often provide a variety of protections and services, and don’t charge fees for foreign exchange conversions. A financial planner may be able to recommend a travel credit card for you.

Be sure to let the credit card company know about your trip so they do not freeze your card when you make purchases in a location you don’t typically visit. 

Book Your Trip and Enjoy the Journey

Once you’ve met your financial goal and you have all necessary documentation for international travel, book your trip and enjoy the adventure! Working with a financial planner can help you maximize your time off and experience the trip of a lifetime while keeping your other financial goals in mind.

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