With the holidays just around the corner, many are dusting off their suitcases and gearing up for festive adventures. However, traveling during the peak season can put a dent in your wallet if you’re not careful.
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GOBankingRates surveyed 1,039 Americans aged 18 and older from across the country, asking how much they plan to spend on flights and hotels this holiday season. Over a quarter of respondents said they’ll splurge more than $1,000. And out of these 25%, millennials and Gen Z make up the largest portion.
There’s nothing wrong with treating yourself for all of your hard work this year, but make sure to balance the joy of the holiday season travel with financial responsibility. Here’s how to keep your holiday travel budget in check to avoid heading into the new year with a looming mountain of credit card debt.
Also see what the average American spends on travel.
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How Much Should You Spend on Holiday Travel?
“How much to spend on holiday travel is inherently personal, but my best advice is only to spend what you can pay for in cash,” said Dr. Kate Mielitz, a personal finance expert and accredited financial counselor for Beyond Finance. “If you’re trying to figure out what you can ‘live without’ if you take the trip, you probably can’t afford the trip.”
That said, holiday travel still can be affordable as long as you plan ahead. To ensure you’re financially prepared for your holiday travel plans, Mielitz suggests asking yourself questions like:
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Can I take my pets with me? If not, how much can I afford to pay to board them or have someone pet-sit?
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Do I need to have someone house-sit? How much can I afford to pay them for the increased utilities or food consumed in the house?
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Have I factored in the miscellaneous travel costs like eating out, gifts, tourism and entertainment?
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Will I need to rent a car there? If so, can I afford gas and car rental fees?
If you realize you can’t afford to travel during the holidays after going through these questions, cut down your expenses to beef up your travel fund or reconsider your plans. Avoid overextending yourself by dipping into your emergency fund or maxing out your credit card to fund your travels, as you’ll end up only with post-travel financial stress.
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4 Expert Tips for Saving Money on Future Holiday Travel
The cost of traveling during the holidays can often put a strain on your finances if you fail to properly plan for it. Here are four pro tips to help you save money on future holiday travels and stay within your budget.
Set Up Flight Tracker Alerts Ahead of Time
Hundreds of thousands of people head home during the holidays, making it one of the busiest travel times of the year. Without prior planning, you could end up paying double or even triple the prices for flights during this peak season.
To safeguard your wallet, Erika Kullberg, a personal finance expert and founder of Erika.com, suggests setting up Google’s flight tracker alert to be notified when tickets are on sale. “This way, you’ll be able to find a great deal without putting in much effort,” she said.
Note that the days when flight tickets are discounted might not align precisely with your intended travel dates.
“However, if you’re willing to be flexible with your schedule, you could save a good chunk of change,” Kullberg said. “Talk to your family and see if you can change some holiday plans to find a less expensive flight.”
Prepare Travel Snacks Before the Trip
“A bottle of water can cost $5 or more in the airport, and a small bag of chips is similar,” said Kendall Meade, CFP at SoFi. “You can easily spend $20 just on snacks in between flights that would cost you $5 or less if you brought it from home.”
While $20 may not seem like much, it could quickly add up if you fly long distances and have multiple layovers. If money is tight and you can’t afford to go over budget, prepare travel snacks before the trip by stocking up at budget-friendly grocery stores such as Trader Joe’s or Target.
Though you may have to carry a few extra pounds in your backpack or luggage, it’s worth the savings. Don’t forget to bring an empty reusable water bottle to avoid expensive drink prices at the airport.
Use Your Credit Card Strategically
Beyond the typical cash-back or points systems, many credit cards offer unique perks, such as travel insurance coverage or exclusive access to airport lounges.
“By understanding the full spectrum of your credit card benefits, you can save baggage fees and travel insurance costs and even enjoy complimentary airport amenities,” said Tyler Meyer, CFP and founder at Retire to Abundance.
If you’re a frequent traveler, you may want to consider applying for a travel credit card to maximize savings and benefits. Some of the best travel credit cards to look into include:
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Capital One Venture X Card
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Capital One VentureOne Rewards Credit Card
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Barclays JetBlue Plus Mastercard
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Wells Fargo Autograph Card
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Chase Southwest Rapid Rewards Priority Card
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U.S. Bank Altitude Connect Visa Signature Card
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Chase Southwest Rapid Rewards Premier Card
Every travel credit card has its unique features. Compare factors like annual fees, sign-up bonuses, foreign transaction fees and rewards structure before signing up for one.
Look for Tax Efficiency in Your Travel Planning
“Certain travel-related expenses may be eligible for tax deductions, especially if your trip involves business-related activities,” Meyer said.
If possible, he suggests strategically combining business and leisure travel to make a portion of your holiday expenses tax deductible. For example, if you go on a business trip to Chicago right before Thanksgiving and extend the trip to visit your loved ones in the city, you may be able to claim tax deductions for the portion of the journey that was business related.
However, if the main purpose of the trip is personal, like visiting your family for Christmas, you can’t deduct meals or any travel expenses as a business expense.
Before you try this money-saving travel hack, Meyer suggests talking to a tax professional to ensure you’re capitalizing on potential savings while staying within the bounds of tax regulations.
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This article originally appeared on GOBankingRates.com: 26% of Americans Will Spend Over $1,000 on Holiday Travel This Year, Survey Finds