There are tons of websites that focus on all aspects of the travel experience. Many focus on reward cards and booking bonuses, while others such as The Points Guy devote their spaces to maximizing the points benefits of various rewards programs. This article will not act as any substitute for those blogs and articles, and many of them are certainly worth checking out.
What this article will do is help you align your travel plans with your values and goals. The travel industry is armed with data that can help it push and pull your behaviors. – if you let them. This article will help you evaluate how you spend on travel while maintaining your goals, finding opportunities to save some money while not compromising your experience.
The First Question When It Comes to Travel: How Does It Fit You?
When speaking with clients about travel, the conversation often begins as the result of the consideration if not outright acquisition of a travel credit card/rewards card. I am often asked open questions like “how do I feel about travel cards and points and bonuses” (which I will talk about more a bit later in this article). I tend to pull the conversation in a different direction by first trying to understand how travel fits into their lifestyle.
How travel fits you is a really important question to answer, because it ultimately sets an expectation for what sort of footprint it will have on your expenses and how you live life. Are you planning to vacation a couple of times a year, and that’s it? Do you travel as a combination of work and for pleasure? Do you travel frequently? Do you prefer to travel domestically (within the United States) or are your aspirations for traveling internationally/globally? Depending on how travel fits into your lifestyle, your expenses and modes of travel, lodging, meals, and entertainment can vary significantly. Getting at least a reasonable baseline of what this means for you will inform how you will need to budget and where savings may be possible.
Are You Being Rational or Aspirational?
When you think about travel, it is likely that you are reading articles, blogs, and perhaps receiving advertising about different travel opportunities and promotions available. It is easy, and can frankly be a bit intoxicating to think about a life of jet setting, infinity pools, and complimentary everything. Think about the answer to the first question. Is it realistic? From a logistical standpoint, from a financial standpoint, and most importantly from a values perspective, are you being rational or are you being hopeful? It is okay to be hopeful, but you need to know that that’s what you are being. The danger that can happen here is when people believe they are being rational but in reality are being aspirational to the point of being drunk on hopium. The latter can result in serious consequences, such as being stuck in a timeshare, taking on credit card debt, or forgoing saving for important goals such as kids’ education and retirement. Much like creating SMART goals, it is important to acknowledge whether you are being realistic in how you want to travel, and adjust your goals accordingly.
Pros and Cons of The Points Guy et. al.
Gamification is a common force for promotion in virtually every industry, and the travel industry is one of the most prolific at it. From points and multipliers to rewards and perks, it might feel like traveling is a bit of a game . . . like a Vegas slot machine. This is where I insert a sobering reminder:
People do not build wealth on travel rewards. You will not meaningfully build toward savings and retirement goals by reaching Diamond Platinum Star Spangled Awesome tier.
This does not mean don’t take advantage of programs and deals. It does mean don’t get wrapped up in them to the point of sacrificing pursuing long-term goals and values by becoming enamored with the glamour of perks and incentives.
That being said, bloggers such as Frequent Miler, The Points Guy, One Mile at a Time, and Nerdwallet do an excellent job of detailing travel tips, tricks, hacks, and ways to make your miles/points/free nights go as far as possible. They can highlight ideas for adventures you might not have otherwise considered, and they’ll likely have thoughts on how you can make that experience an 11/10. What you have to keep in mind though when reading these blogs is that while they may be very insightful and helpful, they have to make money, and the ways they tend to make money are through partner/advertiser clicks and commissions from readers taking advantage of deals and promotions. This in itself isn’t necessarily a bad thing – they may have access to promotions offered nowhere else – but they also can be pushing very consequential instruments such as credit cards, which can and likely will affect your credit score. This is why before you ever begin researching potential destinations and opportunities to save, having a clear sense of what you can and cannot afford will help you stay inbounds when it comes to your vacay finances.
Flight Rewards Are For the Frequent
When it comes to air travel, you really need to fly with relative frequency or distance before the various cards make much sense. Most of the more lucrative offers also carry large annual fees ($500+/yr), where cards at lower tiers fail to offer as much value as more generic rewards cards offering points and/or cashback. Additionally, airlines can and do manipulate points schedules and blackout dates. Relying on your purchases alone to fuel your air travel desires is likely to fall short of your expectations. That all said, if flying is a regular part of your modes of travel, travel cards can offer bonus miles, potential discounts on flights with points, and even airport lounge access that can make the journey much more enjoyable. It all comes down to whether or not you will fly a bunch; if not, then stick with a card that will pay out straight cash back or points that you can use in a variety of ways besides flight.
Hotel Rewards Are About Brand Loyalty
Unlike the airlines, which tend to be more time sensitive about their rewards programs, hotel platforms play the long game when it comes to rewarding travelers. Points tend to expire only after multiple years of inactivity, allowing you considerable dormancy if you habitually have lodging already provided where you go. A big consideration when it comes to selecting a hotel chain is to look carefully at where you plan to go, what hotels are actually in those places, and stick with a single chain that can meet most or all of your lodging needs. It does not do any good to find a financially lucrative hotel rewards program when their properties aren’t where you want to travel. Establishing loyalty with a brand that is both rewarding and is located in places you want to be can help ensure that you’re truly getting the most out of each stay.
Timing Is Everything – Sort Of . . .
When it comes to booking various aspects of travel, timing can play an important role in how much you pay and what experiences are available. For key destinations with lots of demand, booking hotels and experiences may require you to plan ahead an entire year . . . or more. For international travel, depending on the destination, the season, and the currency exchange you may be able to score some solid savings booking 6-9 months in advance, or coordinating a purchase with either an airline deal or a Black Friday/Cyber Monday offering. For domestic travel, we recommend booking 45-60 days in advance as a minimum, further in advance again if the destination is highly sought after such as Florida in December through April. But if you’re looking for some last minute deals and you don’t mind not having a plan in advance, hotel bookings trend upwards of 13% lower when booking 15 days out compared to four months in advance according to a 2021 Nerdwallet study (French and Kemmis, 2022). This in many ways comes down to the trade-off between wanting or needing to save money to enjoy a particular experience that might otherwise have been out of reach versus saving your time and energy, but spending more for that convenience and the assurance that you get what you truly want.
Leave Room for Failure
Just like the topic of insurance, people do not enjoy thinking about bad things that can happen to them. That does not mean they are exempt from bad fortune, and travel plans are no exception. Building in flexibility should problems arise can help keep your blood pressure low even in the most challenging of circumstances. Here are some important ways to build some cushion in your vacation:
- Avoid prepaying for lodging if at all possible. It is not worth the few extra dollars saved should your travel plans become interrupted due to illness, emergency, or an unforeseen situation. While many travel operators were forced to build grace into policies during the height of COVID, those policies have been either significantly watered down or outright eliminated, meaning that you will likely lose your money if you take that slightly lower rate without any form of cancellation protection. That said, it is worthwhile to look at your credit card’s policies to see if trip interruption coverage already exists that would protect you in those situations – most of the major travel cards do have this built in, along with the higher-end general use credit cards.
- Leave open space or even open days without a plan. Sometimes, people don’t feel well or inclement weather can affect your travel experience. By giving yourself time to flex experiences or provide yourself time to rest, you will have a better chance of entirely enjoying the most out of the vacation.
- Pack flexibly for a variety of conditions. Unless you know the weather is going to be consistent, packing with layers in mind can help you with personal climate control. If your trip is particularly outdoorsy, having bug spray, sunblock, weatherproof or quick wicking clothes, changes in socks, and a means to hydrate throughout the day are important both in preventing illness and injury and having lots of active fun.
- Plan to return with time to spare. For domestic travel, give yourself at least one day to catch up on home living needs, particularly if you changed two or more time zones. For international travel, I recommend up to three days of rest. It is no joke that people need a vacation from their vacation – or at least the chance to recover from it.
And Under Absolutely No Circumstances Should You Ever, EVER . . .
. . . buy into a timeshare. They are a financial sink, obligating you to pay for the experience every year. After it is paid for, just like owning a home there are still taxes and maintenance, and short of death are very difficult. Even the so-called “timeshare exit” businesses are rife with fraud and abuse, as personal finance personality Dave Ramsey faces a $150 million lawsuit for promoting one such fraudulent company to his listeners and followers for years while allegedly pocketing over $30 million for himself while doing so. I have helped a few clients over the years exit their timeshares, and it took in each case months of letters, phone calls, and death certificates before these companies relented. It is a royal pain in the butt and in my opinion, the juice cannot possibly be worth the proverbial squeeze.
After the last few years of feeling sequestered, it is no surprise that the desire to travel and see the world is in high demand all over the world. There are terrific opportunities to enjoy travel and vacation in greater depth, but there are also a number of traps that can cost you money, hinder your ability to save for what matters most to you, or impact your ability to fully enjoy your experiences. It can also be very tempting to get wrapped up in the gamification that points and rewards offer, playing right into the industry’s hand while not necessarily serving your needs as a traveler.
With any of these ideas, the quintessential phrase “your mileage may vary” applies, but my hope is that these thoughts will help you balance what is most important and help you have fantastic adventures throughout your life while saving some money and avoiding stress along the way.
Note: Briggs Financial Inc. does not endorse nor have any connection to the blogs or services mentioned in the article. Briggs Financial Inc. only earns money from clients for services provided, and does not receive any commissions, kickbacks, or incentives from ANY outside source.
French, S., & Kemmis, S. (2022b). Ask a Travel Nerd: Is It Cheaper to Book Hotels Last-Minute? NerdWallet. https://www.nerdwallet.com/article/travel/is-it-cheaper-to-book-hotel-last-minute
Napolitano, E. (2023, June 5). Dave Ramsey faces $150 million lawsuit for promoting company accused of fraud. CBS News. https://www.cbsnews.com/news/dave-ramsey-getting-sued-150-million-lawsuit-timeshare-exit/