Money Advice While on Vacation (6 Traps to Avoid!)

by Jason on August 2, 2010

Before you set off on a memorable vacation you will probably read up on the cultural differences of your destination, and other local information to avoid falling into traps of offending locals by dressing inappropriately, or being taken advantage of when you don’t know which street vendors are legitimate.

However, there are also plenty of traps when travelling which are harder to spot.  You’ll need some good money advice to help you avoid money traps while away from home, because you can find yourself over budget, out of cash and struggling to get out.

So here is some money advice for you while vacationing – avoid these traps:

Trap 1 – Expensive Tourist Restaurants

When you are traveling it is easy to be caught up in the tourist spots. You are probably staying in a hotel, in the heart of the city or near main attractions, you will find yourself in the heart of the tourist district, where restaurants and cafe are often more expensive than in other areas.

Instead of falling into the tourist trap of expensive essentials such as going out to eat:

  • Have breakfast included in your hotel room. Many hotels will offer breakfast specials included with your room charge for much less than you would spend if you went out – that’s one meal you don’t have to fork out for.
  • Eat at a fancy local restaurant for lunch. It is great to discover the local cuisine of the region so book a table for lunch in a local restaurant, where meals are often cheaper.
  • Ask the locals, or the hotel staff. Find out where the tourist trap isn’t set and ask the locals about good, affordable restaurants, you may have to travel a bit further, but the walk can mean you experience more of your holiday destination.
  • Go to the supermarket. Going to the supermarket while on holiday can be an adventure in itself and you’ll be up close and personal with the locals, their food and their customs while you stock up on snacks, drinks and even the makings of dinner.

Trap 2 – Expensive souvenirs

You want some sort of memento from your trip and of course gifts for friends and family back home, but to avoid the trap of spending your holiday budget on expensive souvenirs:

  • Know the exchange rate. This will help you calculate whether your purchase is good value for what it is, based on its true cost to you.
  • Is it really a souvenir? Before you purchase an item, consider whether it is really indicative of your trip, or whether it is something you could get at home cheaper, or even worse – if it is a cheap and poorly made souvenir which is aimed at targeting tourists making impulse purchases. Instead, make your souvenirs count, and look for something which really represents your trip.
  • Limit the number – and the weight – of souvenirs. Remember that you will have to pay to take your purchases home again if they exceed your baggage weight limits so even a souvenir which seemed affordable when you bought it, could cost you later on.
  • Shop duty free. Don’t forget about the duty free shop at the airport where you can shop tax free and buy great gifts of pampering skin care, perfume or alcohol, for family and friends.

Trap 3 – Add Ons

When you travel it is always good to have a plan, but you don’t need to plan every day and every minute of your trip. Therefore, be aware of travel agents who will encourage you to add tours and excursions on your travel package because these can add thousands of dollars to your travel budget, and may not be the best value.

Consider whether the add-on excursions are things you want to be doing, and things which are unique to the area you are travelling to, for example look for cooking classes or tours which are not normally open to the public.

Also consider whether you need to join (and pay for) a tour to enjoy the experience, for example you don’t need to be part of a group to do a walking tour of the city, or hire a vesper to see the sights.

Trap 4 – Not Budgeting

When you travel you need to make sure you have budgeted for every part of your trip from the time you leave home to the time you arrive back.

Knowing how much you have to spend before you leave can help you avoid overspending when you arrive at your destination, and can help you avoid a spending hangover when you return home, and back to the real world of bills and responsibilities.

Deduct your necessities such as flights, accommodation and insurance from your travel savings and then stick to spending only what you have left. Also be sure to have an emergency fund so you know you have enough money for a taxi to the airport or for the insurance excess if you need emergency treatments or have your bag stolen.

To make budgeting easier while you are away, use your credit or debit card because you will be able to view your transactions online with Internet banking at an Internet cafe or on your smart phone, and using a card is cheaper than using travellers’ cheques in most cases.

Plus, with your credit card, if you purchase your flights and accommodation on the card, you and your whole family can often be covered by international and domestic travel insurance.

Trap 5 – Being Unprepared

When you travel you want to relax, and enjoy going with the flow away from your everyday life, however you can still be prepared, and this will save you money.

When you are prepared, you can plan your spending more easily because you will know where you are staying, which meals are included, and therefore how many meals you will need to pay for over the course of the trip.

You can then look at where your hotel is in relation to restaurants and supermarkets to research local meal prices and inclusions.

In pinpointing your location on a map you can also plan where you are going and when you need to be there to meet tour times or general admission times to attractions. This is your chance to learn about the public transport system so you can avoid expensive taxi rides.

Trap 6 – Being too spontaneous

It is fun to be spontaneous sometimes, but it is a common travel trap which many people fall into, because if you leave your flights, accommodation and tour books to the last minute, you could be paying a premium.

When you book in advance you also have more flexibility with dates which can save you money too. For example, if you are travelling to Monza in September but are not interested in the Grand Prix, you can avoid those dates and therefore avoid the highly inflated accommodation and travel costs which surround such a big event.

At the same time, be prepared to negotiate prices closer to your departure date to save you more money, because things like hire cars are often cheaper at the last minute, and don’t charge cancellation fees.

Also aim to book online if you can to save even more, and it’s also easier to find inclusive packages, but make sure the inclusions are ones you actually want and need.

Travelling can be dangerous and it can be expensive, but if you know the common traps which ensnare the unwary tourist, you can make your way through any travel destination with money in your pocket for the trip home.

This has been a guest post by Alban, who is a personal finance writer.

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