Travel, so they say, broadens the mind. Thats all well and good, as long as it doesnt bust your wallet in the process.
Whether en route for business or pleasure, many of us spend a good deal of time on the road. If the trip is being underwritten by your employer, handling your travel in a cost-efficient manner is usually no tough nutyour flight and hotel expenses are taken care of, you know how much you can spend on other types of expenses and you generally try to toe the line as much as possible.
However, if youre the one whos paying the billsmaybe youre traveling for an important job interview or a dream vacation to some sunny tropical isleit pays to keep a few ideas in mind so you can get the most out of your trip without incurring crippling expenses.
First, its helpful to start saving for travel long before you even set foot on an airplane or cruise ship. That means regularly setting aside a portion of your income in a separate account, such as a money market account or money market mutual fund. The amount you should save depends on how expensive your travel might be. If, for instance, you expect to spend as much as $3,000 on travel in a given year, you should save at least $250 a month. Even if you cant save all that you anticipate youll need, earmarking a portion of the expense will lower the amount you end up owing down the road.
Many folks turn to their credit cards to pay for travel. If youre going overseas, credit cards often offer the best exchange rates, not to mention buyer protection plans and protection against fraud. But be cognizant of the interest rate youll be paying. If your regular cards rate is rather modest (say, in the 8% range or so), thats great. However, if the rate is a bit higher than that, consider getting a card with a teaser rate to pay for your trip. These can run as low as 2% or so. But bear in mind the low rate doesnt last forever, so be prepared to pay off your bill as aggressively as possible.
The next step in cost-effective travel is finding the cheapest way to get there, the best accommodations for your travel dollar and other similar costs. Here, a good travel agent can be of inestimable help, as many will know of little-publicized travel deals, packages and other programs. Equally important, a competent travel pro will get to know your likes and dislikes and tailor recommendations that match your needs.
The Internet is another powerful source of cost-conscious travel planning. From expansive travel Web sites that handle airline, hotel and car reservations to sites that address more specific travel needs, the Internet offers an unparalleled array of cost-effective suggestions, insight and information. For instance, if youre interested in traveling to a particular destination at a certain time of year, many sites let you plug in specific information such as the number of people traveling, your travel budget and whether you prefer to travel during the day or evening. These sites then display a selection of itineraries within your price range.
Another advantage to the Internet is its speed. If you like what you see, you can usually book your trip right there online. However, you can also use the Internet for pure research to find the best deal you can. You can always book it there or, alternatively, take the information back to your travel agent to see if she can do better.
A couple of final thoughts on cost-conscious travel: While bringing cash to spend may seem like a good idea to hold down your expenses, dont rely solely on greenbacks. If theyre stolen, youre out of luck. Instead, stick with a blend of cash and travelers checks which, by themselves, can keep your budget in line. For emergencies, credit and ATM cards can be real lifesavers.
Finally, what about deducting the cost of your trip? While the IRS doesnt let you write off trips taken purely for pleasure, you can deduct most business-related travel expenses. The rules become a bit fuzzier if the trip is for both business and pleasure. For instance, if you go on a pleasure jaunt to San Francisco, you cant deduct any of your transportation costs. However, if you take a business associate to lunch and pay for a cab back and forth while youre there, some of those expenses may be tax-deductible. If youre unclear as to what you can write off and how you can best tailor a trip to your tax advantage, talk to a tax pro for a clear rundown of what works and what doesnt.