Money Slackers: How we budget for travel (or don't)

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Money Slackers: How we budget for travel (or don't)

Welcome to Money Slackers, a regular discussion among Policygenius staffers about money. We held the following conversation in a Slack chatroom. It's been lightly edited.

Myles Ma [Managing Editor]: HELLO Slackeroos. This month we're talking about travel because it's almost summer. I hope you all are going somewhere cool. One thing I am curious about: Does anyone actually make a budget for traveling at the beginning of the year? Or do you just have less money that month like me?

Patrick Hanzel [Certified Financial Planner and Advanced Planning Specialist]: I don't budget for it. I just deal with it once it happens.

Myles: How do you make up for the shortfall?

Patrick: I guess I'm a pretty good saver naturally so I kind of set aside money each month to pay for things like travel, emergencies, etc.

Holden Lee [Head of Business Intelligence]: I also don't budget because some travel is opportunistic. Once a travel opportunity arises, we do budget for it.

Hanna Horvath [Staff Reporter]: I do not make a budget. I decide where I want to go and then set a maximum amount and try and spend under it.

Kieran Duffy [Senior Sales Associate]: I make a budget. Specifically for the airfare and living expenses. Other than that, I like to live dangerously.

Use our spreadsheet to budget for your vacation.

Hanna: Yeah, I don't think I would go on vacation if I was genuinely worried about how much I was spending or couldn't cover it.

Anna Swartz [Insurance Editor]: I don't set a budget at the beginning of the year but I do set one per trip. And we'll decide on some select splurges.

Jeanine Skowronski [Editorial Director]: I'm the opposite of Anna. I don't budget per trip, but I limit my travel spend per year.

Blayne Smith [Senior Acquisition Manager]: No budget at the beginning of the year. When we go on trips we don't sweat the costs too much and just try to save where we can. Generally we're not living large with expensive hotels/meals so it works for us.

Kieran: This one time I stayed at an AirbnB that was $30 a night because they had a cat. I'm allergic to cats though.

Anna: Kieran no.

Blayne: Seems worth it to me. I'm with you, Kieran.

Kieran: It happened, guys. It was a learning experience to say the least. Check for pets.

Hanna: I am the biggest fan of all-inclusive because once you pay the set price everything is more or less free.

Anna: I'm going to an all-inclusive at the end of the month! I never thought I would be a resort person, but I love resorts. Let me live my truth.

Patrick: I do tend to take time finding better deals when booking flights and hotels. For example, I recently went to Tahoe for a wedding and bought basic economy (no carry-on bags, etc.) to save like $300 roundtrip. And it had a connection.

Myles: For the people who do not set a travel budget, where does the money come from? Do you set it aside each month as some people have said or do you just pull it out of another bucket?

Anna: It comes out of the "eating out/general entertainment" bucket, which is loose.

Myles: A loose bucket!

Anna: Very loose. I should budget better.

Hanna: So I have a checking account, a savings account for emergencies and an account I like to call "living wealthy," which is vacation money and for nice gifts. So all the vacation money comes from the living wealthy account.

Anna: That's cute, Hanna.

Jeanine: I use my discretionary fund. And if we go over that I tap the savings account.

Patrick: Do any of you have a specific airline credit card you use?

Anna: No, tell me which one to get, Patrick!

Jeanine: I do! The United Explorer card.

Myles: Sell it to me, Jeanine.

Jeanine: Next trip we take, we'll be flying for free.

Patrick: I actually don't have one yet but I'm looking into them now.

Myles: Oh, so you're asking us for recs?

Blayne: After my last trip to Italy, a no foreign transaction fee card seemed like a good idea. I didn't have one for that trip.

Holden: There are credit cards that provide rewards/bonus points for travel, regardless of airline. I'm not very loyal to any airline/alliance.

Kieran: I feel like I don't travel enough to warrant getting a credit card with travel benefits though.

Jeanine: The right travel credit card for you depends on what airline you fly most, what hotel you frequent, how often you travel, etc. United is a hub in Newark airport, so we fly United pretty much all the time, which is why we have its credit card.

Holden: Bank of America Travel or Bank of America Premium Rewards are pretty good for travel. Not as good as some of the Chase Sapphire or whatevers. Also "travel" includes resort fees, hotel bills, amusement parks, etc. At least according to the fine print.

Patrick: I do have a credit card that gets me travel points/miles but nothing airline-specific. I'm not loyal either and just tend to book the cheapest/ most convenient flights.

Jeanine: If you don't travel often or you don't frequent a specific airline or hotel, get a generic travel rewards card like the Capital One Venture card.

Anna: One thing I'll say is that budgeting for travel is a lot easier if you and your travel buddy agree on priorities. My wife and I are both willing to pay a little more to take a direct flight, or to stay close to attractions or something, and neither of us are big drinkers so we don't worry about that. We also take free walking tours and public transit in new cities. Although, honestly, I would pay more for flying in a higher class on the plane and she wouldn't so that's where we differ. I would blow all my money on plane tickets if I were alone.

Learn how our Money Slackers manage money with their significant others.

Myles: I also love a direct flight. And am willing to pay for it.

Hanna: Growing up my dad was the king of three flights to get to a destination and now I only do direct. I don't care how much extra it is.

Holden: Probably willing to pay up to 10% more for a direct flight.

Blayne: I'm willing to pay quite a bit more for direct flights if it saves on travel time. For us the limiting factor for vacations is usually the time so I put a lot of value on extra hours at the destination.

Jeanine: We flew first class for our honeymoon and now we can't stop flying first class.

Anna: Jeanine, help me fly first class. I want to be up there with you.

Myles: OK. Now be honest. I know where we all work. Does anyone actually buy travel insurance?

Anna: YES!

Hanna: I do not. But to be fair my 50-year-old parents went on a biking trip around Spain and I was really worried because they didn't have travel insurance.

Kieran: Not once.

Patrick: I do not.

Anna: I got travel insurance for my honeymoon in January. And I was glad I had it even though nothing bad happened.

Myles: Sell it to us.

Anna: It was just an added layer of protection. We were in Thailand and I wasn't sure how hospitals work there and also an elephant almost stepped on my foot and I had my little travel insurance card right on my phone with a number to reach them.

Kieran: I did get very sick in the Dominican Republic with no travel insurance. I had to hold out until coming home. One of the worst experiences I've ever had.

Anna: Was it from the cat?

Jeanine: I think that's the big sell for travel insurance, right? Medical expense coverage — because your health insurance won't work abroad.

Kieran: A checkup was running over $100.

Holden: Eh, I never buy insurance for travel. Thankfully I don't think I've had any missing luggage or stuff like that. Then again, we travel extremely light.

Anna: How do you travel light with two kids, Holden? Are you speaking relatively?

Holden: Duffel bags, large carry-ons. Once you start paying for their tickets over age 2, they get their own carry-on allotment. And with babies, you can carry even more stuff like baby food and milk, etc.

Blayne: You leave the kids with your in-laws, duh.

Anna: Blayne cracked the code.

Blayne: Florida is for the kids. Everywhere else is just us.

Myles: For our parents, has lugging the kids along increased your travel expenses by more or less than you expected?

Blayne: About what I expected.

Holden: More for flights, definitely, but not much else. Usually non-financial costs, like more time at the airport, more prep time before the airport, coordination of nap schedules.

Blayne: AAA pays for itself on one trip because you get a free car seat with your Hertz rental car. And then you don't have to lug the car seat.

Holden: Once you start paying for preschool, everything else just seems like small potatoes.

Myles: What about while you're on the trip? Do you do anything special to save?

Anna: I don't really worry about money on vacation. We don't go crazy but it's like, how often am I going to be in this new place? I want to eat good food. And other currencies feel like fake money anyways. Although my wife does all the ATM withdrawals because she has no fees and I do.

Holden: Penny-pinching on vacation is the worst. Then again, no need to collect random souvenirs, aka garbage.

Anna: HOLDEN. Getting a cheesy magnet from everywhere you go is essential. I also have a box entirely covered in shells from Florida and I treasure it. SHELLS! From the ocean!

Holden: We do take a lot of pictures that get printed.

Kieran: Treat yourself. That's my vacation motto.

Jeanine: That's my mentality. Vacation is the one time I don't think about money. Though I will look for Groupons before booking excursions. Just because it seems silly not to.

Learn 50 free things you can get when you travel.

Myles: The best travel deal I ever got was through Groupon. Me and a buddy went to Istanbul for a week. Anyone else have any memorable travel deals they scored?

Hanna: $330 round trip to London. That felt affordable.

Anna: We set flight alerts to get deals once we've decided to go somewhere.

Myles: Where do you get the alerts?

Anna: Umm websites. I don't know my wife does it.

Patrick: You can set alerts with Hopper or Kayak.

Holden: Not a deal but a find. Jamaican resort that also has a nanny.

Anna: A free nanny?

Holden: Yes, a free nanny with your room. 8:30 to 5:30, I think.

Kieran: Does going on a cruise during hurricane season count?

Jeanine: Yes, but also no.

Myles: Is that actually cheaper?

Kieran: 100%.

Myles: Like how much cheaper.

Kieran: I went on a cruise a year and some change ago for four to five days which ran $700 to $800. The cruise I am going on in seven to eight days is for $800 to $900 on a more updated ship, but it's during hurricane season. Same cruise line.

Holden: I see travel deals all the time on sites like Slickdeals, but it's not like I'm going to rearrange my schedule to go to Greece for $500. Travel plans are set waaaay in advance now that we have kids, and then and only then do we look for deals. But "deals" is really just buying tickets early as possible.

Patrick: Anyone subscribe to Scott's Cheap Flights? I don't but I've heard of people getting crazy deals.

Myles: Funny you should mention Scott’s Cheap Flights — we interviewed that guy. Does anyone ever staycation?

Anna: No.

Jeanine: I have and it's never fun.

Kieran: That is my favorite type of vacation.

Myles: Is it worth taking the time off to just stay put (even if it saves money)?

Holden: Not anymore. Because kids. Actually, does going away nearby count as staycation?

Anna: No, it doesn't.

Myles: How much do you factor cost into your choice of destination? Like, do you favor Thailand over Iceland because everything is cheaper there? Or do you just set yourself on where you wanna go?

Hanna: I went to London and it was extremely expensive. But I still went because it's my favorite city. So no.

Anna: Yes! We chose Thailand for our honeymoon because it was tropical, far, but not expensive once we got there. And we could stay in gorgeous places for much less than if we went to Hawaii or something. But I have also been to Iceland and saved by sharing an Airbnb with five friends.

Jeanine: I definitely skip places because they're too pricey. That way, I don't have to worry about spending while I'm away.

Blayne: 1. Location, 2. Scheduling, 3. Flights as cheap as possible for the schedule, 4. Everything else

Myles: Blayne, I love that. I don't know if I have such delineated priorities though. Last thing and then we sign off: Dream destination? For me? The moon.

Hanna: Fiji or South Africa.

Anna: Hogwarts.

Jeanine: Bali, maybe? One of those places that's just cabanas over water.

Kieran: London if it was as affordable as New Jersey.

Holden: Anywhere with nanny services.

Anna: Holden is going to that one place in Jamaica for every trip.

Holden: I do think our next destination is Turks and Caicos. I heard it's family-friendly. And not too far.

Myles: Please report back, Holden. And thanks everyone.

Anna: Let's all go on vacation together. Right now.

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Image: Phillip Blackowl