by Barry Choi
Traveling is one of my favourite things to do. The experiences I’ve had while abroad are worth more to me than any material possession ever will. However, traveling isn’t exactly cheap (although it can be). So how do you see the world without breaking the bank? These are some of the top tips I’ve picked up over the years to help you travel on a budget.
Create a Budget
Traveling is just another expense so that means we need to budget for it. However, creating the right budget can be tricky. There are two ways I recommend people budget for travel. First, set aside a set amount every month for travel: Say $200 a month or $2,400 a year. With that amount, you can travel to a number of places without going over your yearly travel budget.
Another way to budget for your travel is to work backwards. Let’s say you plan on traveling to Europe in a year and a half, and you estimate the trip will cost you $5,850. That means you’ll need to save $325 a month for the next 18 months to stay on track.
Go Where You Can Stay for “Free”
During my high school days, my aunt in London offered to put me up for free. I turned her down every year because I was much more interested in hanging out at the mall instead of seeing the world. What a huge mistake!
After airfare, accommodations are usually your largest expensive so why wouldn’t you want to visit places where you have free accommodations?
This should be obvious but it’s incredible how much money you can save by traveling during non-peak seasons. The summer is often the most expensive time to travel so I prefer to vacation during the spring or fall when prices seem to be 25% lower.
The other advantage of traveling during the off-season is that there are fewer crowds. The first time I visited Paris was in October and I could stroll into any tourist attraction without having to wait. I returned to the city a few years during August and had to stand in line for two hours to see the Catacombs and one hour to get inside Notre Dame Cathedral.
Use Travel Credit Cards
One way to offset travel costs is to use a travel rewards credit card. The sign-up bonus you get will usually be enough points to claim a free flight right away, but it does require to spend a set amount within a period of time. Another benefit of using a travel credit card is that most of them come with free travel insurance (for a set period of time), which could save you a few hundred dollars in case there’s a delay or you lose your baggage.
One more trick to reduce your travel costs when traveling is to use a credit card with no foreign transaction fees. The majority of credit cards charge a 2.5% fee on top of the spot rate when you make a purchase in a foreign currency, but there are some cards that waive the fee completely.
Remember, no rewards or benefits are ever worth it if you’re not using credit responsibly. Always pay your bills in full and on time so you avoid having to pay interest.
Eat Local Food
Many first-time travelers opt to go for many familiar chain restaurants. They think local food is scary, right? Not at all. Eating local food is one of the best travel experiences. Over the years I’ve stepped outside of my comfort zone and now I’ll try any food that the locals eat.
Not only is eating local food a unique experience, it’s incredibly cheap! When I was in Bangkok, fried rice from street vendors was just $1. And in Hong Kong, I had dim sum from the cheapest Michelin-starred restaurant in the world.
The Final Word
Remember, traveling on a budget doesn’t mean visiting places for as cheap as possible. Create a realistic budget and plan accordingly. More importantly, don’t be afraid don’t splurge on something while you’re abroad. Trust me, you don’t want to regret not spending on experiences later in life.
Barry Choi is a personal finance and budget travel expert at moneywehave.com.