Financial tips that make all the difference.
According to research by U.S. Travel Association, 55% of Americans did not take all their paid time off in 2018. (Come on, people! You need a break!) It’s important to take your vacation. Your productivity and happiness will improve, and your family and coworkers will thank you. So… let’s get planning!
The first step is figuring out where you want to go — and if you have the budget to go there. Love the mountains and skiing? Or are beautiful beaches more your thing? Do you prefer a road trip? (Because, wow, Iowa has many amazing destinations within its borders!) Or do you have your sights set on a trip to Italy or Hawaii? Dream big and keep these thoughts in mind:
- Timing is everything. Spring break may seem like a good time to travel (everyone’s doing it, right?), but airfare goes up for warm, sunny places like Florida and Mexico. Planning trips for less popular times can often save you a lot.
- Consider all-inclusive destinations or tours to keep costs manageable for travel, hotels, and local transportation. Tours can also be good for single travelers who want to form friendships while vacationing.
- Beginning October 1, 2020, you’ll need a REAL ID-compliant license or ID card if you’re planning to fly to your destination. The state of Iowa has been issuing REAL ID-compliant driver’s licenses since 2013, so you may already have one. Your license will have a cutout of a star in a gold circle in the upper right corner if it’s a REAL ID.
- Going overseas or crossing the border? You’ll need a passport if you don’t already have one. Expect to wait several weeks and spend around $150-$200 to apply for one. When updating your passport, check into the fees ahead of time.
- Schedule your trip around everyone’s schedules. If you have kids, plan vacation when they have time off, too. And remember to ask your employer to approve your vacation time well in advance!
Research potential vacation spots by asking friends, searching travel websites, and googling airfares. Travel agencies and clubs can also be helpful in the research stage. They can provide estimates for what trips might cost and provide travel guides and more.
Figure out your budget
Now that you know where you want to go, how much money will you need to make this trip a reality? To calculate possible airfare, hotel, and food costs, check out travel apps and websites such as TripAdvisor or Kayak. (And don’t forget… if you have our All-In Checking account, you can get great deals on boatloads of travel-related services, everything from car rentals to airfare!)
In addition to the travel expenses, you’ll need to estimate how much spending money you’ll need while away. (Tips, souvenirs, and that airport cappuccino can really add up!) Be sure to set aside a little extra for the unexpected adventures.
Budgeting can be a real wake-up call. If your research shows you that you simply don’t have the funds for your big dream vacation, you may decide to re-evaluate your short-term vacation plans, but keep saving for your long-term plans. (Try to start at least a year in advance.) If you don’t have the cash on hand for the trip, we’ve got some great tips to help you save.
SAVINGS GOALS CALCULATOR – What will it take to reach your vacation savings goal? This financial calculator helps you figure it out.
Straight talk about credit cards
It might be tempting to put your entire vacation on your credit card instead of saving up. (After all, you can go right away if you do that, right?) Here are a few reasons not to go that route:
- High interest rates – With a typical credit card, you’ll pay a really high interest rate, usually anywhere between 19% and 27% APR. You’ll be paying for that vacation for quite a while, and you’ll pay much more for it! (Plus, it’s even harder to save for the next vacation when you’re still paying off the last one!) Our credit cards have muuuuch lower rates, but it’s still important to budget!
- Overspending – It’s waaaaay easier to spend too much and make impulse buys if you’re using your credit card for everything.
- Credit score – It could ding your credit if you get too close to your card’s credit limit.
- Stress – When you come back to that monster credit card bill, all that relaxation you enjoyed on your vacation is gone, gone, gone. Now all you’ll be able to think about is: How am I going to pay this thing off?
Credit cards can work in your favor if you use them wisely. If you’re able to pay off the balance every month, check into our Visa Platinum Rewards card. You can earn points to help you save money on airfare, hotels, and events, as well as luggage, cameras, and accessories. Even if you can’t pay off the balance every month, putting a few items on a low-rate credit card shouldn’t bust your budget. (As long as you’re not putting everything on it!)
Plus, it’s smart to bring a credit card with you when you go on vacation. You’ll need one to reserve your hotel accommodations, and it’s good to have a credit card in case of emergency.
Using your debit card
Due to an increase in international fraud, Linn Area Credit Union blocks debit card transactions from many foreign countries. If you let us know ahead of time, we’ll temporarily unblock your debit card so you can use it for purchases and ATM withdrawals while you’re traveling. (Yep, anywhere in the world!)
Every time you use your Linn Area debit card outside of the United States, you’ll incur up to a 1% foreign transaction fee from Visa. If you’re making a cash withdrawal at an ATM, you’ll need to pay the ATM fee for that bank, as well as the foreign transaction fee. Be sure to include these fees in your budget calculations!
Here’s another tidbit: Think twice before using a debit card to book a hotel room or when you check in for your stay. At most hotels, you’ll need to present a card at check-in, and the hotel will put a hold on the card for the room rate and tax. Some also will put a hold for incidentals ($50 a day or more… no kidding!), even if you tell them you don’t plan to raid the mini-bar.
As soon the hotel’s hold is in place, you lose access to that amount of money in your checking account, even though you technically haven’t spent it! And, in some cases, it can take more than a week to clear the hold and release the funds. You could have hundreds of extra dollars tied up in holds — money you could be using to have fun on your vacation! (This is why we recommend using a credit card for all your hotel reservations.)
Tell us your travel plans
So, you’re ready to roll! (Or fly, as the case may be.) A few days before you leave, let us know when and where you’ll be traveling (even if it’s just in a neighboring state), so we know where you may be using your credit or debit cards. (That way we won’t suspect fraud and block your card when there’s suddenly been a transaction in Barcelona or South Dakota!) This is a very important step! You don’t want to find yourself without access to your money or your credit!
With a bit of planning, you can make your vacation one you and your family will remember for a lifetime! (And you’ll make the most of your paid time off!)