How to fight the urge to waste on a summer trip

Car rental information research firm AutoSlash says car rental prices have increased by up to 300% in popular destinations nationwide. Accommodation costs are also high. On vacation rental site HomeToGo, the average price of rental accommodation booked between this year and September is up 70% from last year.

It’s no surprise that people want to go out, but staying home for a year and combining the idea that “I deserve it” can lead to budget issues down the road.

If you’re planning a big trip this summer, here are some tips.

Realistic and consider compromises

For those who boosted their savings by checking out the stimulus or staying home last year, it makes sense to spend some of that money on travel. Instead of estimating how much money you’ve saved, take a close look and decide on your budget.

For non-fixed costs like airline tickets and accommodation, think realistically to get a clearer picture. Also, consider the tradeoffs at this price.

“I think people run into problems when they don’t know what to sacrifice when making decisions,” said Derek Hagen, financial behavior expert and founder of Money Health Solutions. Said.

For example, do you choose to take that trip or have a weekly date night for two months, or are you going on a longer vacation next year?

According to AutoSlash, car rental prices have increased 300% in popular destinations in the United States.

Photo:
Joe Radle / Getty Images

Avoid impulse bookings

When it comes to travel, it’s important not to make impulse purchases, Hagen said.

One of his recommended tactics is the “night test”. The more you participate in this night test, the better your results. Add something to your cart and come back a few days later to see if that desire still exists. If you still want it (hotels, plane tickets, all-inclusive resort deals), you can buy it, Hagen said.

Accept it a bit before you pull the trigger so your vacation doesn’t become an impulse buy. “It’s not a game of deprivation, it’s just a deliberate game,” he said.

Think about the payment method

If you have a Travel Rewards card, it’s time to use those points while you can pay off your balance.

“Travel points and credit cards can be a very smart strategy. If they can use the points system, use it, ”said Jacqueline, financial advisor for Wilkinson Wealth Management in Virginia. Nasca said. But Nasca, a certified financial advisor, warns that if you don’t have the money to pay for your trip at the end of the month, all of those points aren’t worth it.

Some might want to spend their emergency savings on a summer trip, but Nasca disagrees. The pandemic may slow down, but unemployment and other life changes can still occur. Instead, she recommends planning to leave the bottoms intact for a rainy day of three to six months.

Please wait

Some people predict that the prices will come down over time, so it might be worth the wait.

Share your thoughts

How do you usually plan your summer budget? Join the conversation below.

“Currently the average value of summer bookings made through HomeToGo is high, but we expect this value to change over the year with more last minute bookings for short trips,” the door said. -speak. Caroline Burns, who is in charge, said. Home to take away.

Think about why you want to travel and if this is a really important destination.

Part of the value of planning a trip is purely psychological, says Dan Ariely, professor of psychology and behavioral economics at Duke University, for a vacation, despite the cost of people. He said he was prepared to pay a heavy price. He also said that much of the value of booking a trip lies in the expectations and subsequent memories of the trip, which often outlast the actual trip. Mentionned.

“It’s very hard to tell if it’s rational or irrational,” Ariely said. “The novel coronavirus has robbed us of our planning capacity. There are many psychological benefits to planning, including vacation planning.

Summer travel season

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Write to Amber Burton ([email protected])

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