Financial Planning Tips All Travelers Should Consider


When you travel, you don't want to be distracted by money problems. You definitely don't want to miss a great event or experience because you didn't plan your finances well. Nora Dunn, a financial planner turned full-time world traveler, knows firsthand that planning travel costs carefully results in having a better time. Whether you journey to Atlantic City, the Himalayas or Rome, you'll be happier if you didn't bust your budget.

Good financial planning makes it easier to enjoy a trip to Paris.

Figure the Costs of Your Trip

With financial software, you can get a handle on the probable expenses for your journey. "It's very difficult to set an accurate travel budget, since travel is so different for everybody," says Dunn. Your budget will vary depending on whether you're driving, sailing or flying to your destination; staying in a hotel or with friends; or eating out or cooking in a rental. Software also makes it easier to see how your projected expenses match the reality. Dunn says she tracks her expenses using a smartphone app or a single spreadsheet so she always knows what travel costs her.

Set Up a Travel Savings Account

Having your expenses paid for by the time you leave the house can remove a lot of stress. One solution, Dunn says, is to set up a dedicated savings account. Pick an account that has as high an interest rate as you can get and isn't accessible through an ATM. "That way you won't spend the money on impulse, and you'll earn more interest than your normal bank account will yield," Dunn says. Contributing regularly to the travel account and adding extra when you have it will help your travel fund grow.

Use a Credit Card Wisely

Credit cards are the simplest way to book flights, secure hotel reservations and make other online arrangements. If you rely to one card for the entire trip, it's easy to track what you spent and where. "Call your credit card company to alert them of upcoming travel plans to reduce the chances that your card is frozen while trying to use it abroad," Dunn says. She adds that it's a smart precaution to carry a second card for emergencies, kept separate from the main card. That way if the first card is stolen, you'll have a backup. Another advantage of paying with plastic is that you aren't responsible for charges if the card is stolen.

Learn About Exchange Rates

If you travel outside the United States, the exchange rate of dollars to foreign currency is going to affect your budget. Looking up the exchange rate before you go gives you a better idea how far your American dollars will really stretch. Dunn notes that another advantage of using credit cards is that you get a better exchange rate using them than if you swap dollar bills for foreign money. If you have more than one card, you can save money by using the one that has the lowest fees for spending in foreign lands.

Make Plans to Pay Your Regular Bills

Your mortgage company and utilities won't stop mailing out bills just because you're on vacation. If you're going to be traveling for a while, Dunn says, you need to make sure you're paying everything that comes due. "Automate everything you can," she says, "and take advantage of online billing and payment systems to manage your expenses from abroad. Most service providers will email you your bills, and you can pay them directly online via your bank account."

Consider Taking Out Insurance

Life doesn't give you a free pass just because you're on vacation. You can break your leg in the Alps or the streets of Paris just as easily as at home. In some parts of the world, you may have to deal with particularly nasty diseases or parasites. Dunn says travel insurance to cover medical costs is a useful precaution that can save you from massive doctor bills. If you want to travel for more than a year, international health insurance or "expat insurance" provides medical coverage but for longer periods than travel insurance.

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