Considering traveling abroad? If you’re a first-timer, you’re probably expecting to spend a couple thousand dollars when it’s all said and done. Maybe you’re comfortable with this. After all, it is vacation.
The thing is, not everyone has room in their budget to spend a couple grand to travel for a week or two. But what if I told you that there’s a way to plan the trip you want for less than $1,000? You’re probably thinking, there’s no way! Well, it can be done. I know, because I’ve done it myself several times and I want to share the game plan I’m using to go on a weeklong overseas adventure for just $900!
1. Where Do You Want to Go?
The world is a big place. Despite all the options, chances are you can probably identify a couple countries places on the map that you want to see most. I suggest making a list of at least ten you’d like to visit.
Flight prices can go up and down as randomly as the stock market, so you might not be able to predict when an outrageously cheap flight will fall in your lap and where it’ll send you.
One trick I used to create my list involved identifying positive commonalities between different countries. For instance, if you love picturesque mountains and scenery Switzerland may be near the top of your list. Of course, Switzerland isn’t the only place with natural beauty. Visiting the Dolomites, Austrian Alps, or Mount Blanc might also satisfy your craving for gorgeous mountains and hiking. That means you’ll probably want to add Italy, Austria, and France to your list.
Or, let’s say you’re a World War II buff. You might consider Poland’s war museums as an alternative to Germany. You can repeat this exercise until you’ve got at least 10-15 selections.
2. How Far Does Your Dollar Go in Other Countries?
In my opinion there are two things you should look at when trying to gauge how far your dollar will go when travelling in foreign countries:
- Cost of Living
- Exchange Rates
Fortunately, there are lots of good resources available online that will help you as you begin researching how far your currency will take you during your travels. I’ll tell you about two of my favorites.
Cost of Living
Worlddata.info contains vast amounts of data on almost any country you’d consider visiting. This information ranges from tourism statistics to political stability. My favorite research feature is their cost of living illustration. It ranks the 101 most populated countries within a cost of living index. The index is made up of common goods you may buy daily. Indexed items include beer, burgers, lodging, and groceries. Every item in the index has an average price. The more items a country charges a premium for, the further up the cost of living index it moves.
I’ll use beer to put this feature into perspective. When I was in the Czech Republic, a pint at a local tavern would run me a couple bucks apiece on average. That same beer in Switzerland would have cost upwards of $8-12. The index gave me ample warning of the pricing disparity as Switzerland ranks #3 while Czech Republic is #55. Some countries are brutally expensive.
That doesn’t necessarily mean you should avoid countries near the top of the Cost of Living Index. It just means you’ll need to make plans to mitigate your losses on the respective legs of your journey. That might mean picking up food from at Swiss markets and grocery stores instead of eating out. Or maybe you’ll want to spend two days in Bermuda instead of three.
When folks prepare their vacation budgets they often forget to account for the fact that they’ll be exchanging US dollars for foreign currency. Exchange rates can have a tremendous impact on your budget so it’s important to know what the conversion rate will be.
That’s why the other site I recommend is x-rates.com. While I don’t think exchange rate data is as important as the cost of living statistics, it can be really handy when you’re trying to crunch numbers in preparation for your adventure.
3. Monitor Cheap Flights
Remember when I asked you to make a list of countries you’d like to visit? This is where it really comes into play. If you’re aspiring to travel internationally, subscribing to a cheap airline ticket monitoring site or service is a no brainer. My service of choice is Scott’s Cheap Flights, but there are other out there. Scott’s Cheap Flights is website service that sends emails to subscribers about cheap airline tickets. They use an algorithm to track flight prices that stray from the mean. When they find an international flight discounted by roughly 40% or more they’ll notify you by email.
I’ve been using the service the past couple years and I routinely see roundtrip flights to Europe for under $400. The thing is, you never know when a cheap flight will become available for one of your favorite destinations, so it helps to have a few places in mind, so you can immediately pounce on the deal. If you have to ask yourself if it’s a place you’d really like to visit, the deal might disappear by the time you’ve made up your mind.
4. Put a Dent in Travel Costs with Credit Card Points
Unless you live near an international airport, you’ll probably need to connect domestically before you take off for your foreign destination. I live near Phoenix and often see deals out of Los Angeles, Las Vegas, and Denver but sometimes need to head out east to Boston, Chicago or New York. To prepare for this possibility, I try to keep a few hundred dollars in flight credits handy via various credit card rewards accounts.
I’ve also taken advantage of hotel rewards cards to save on overseas accommodations. In general, I prefer cards offers that waive the annual fee the first year so I can take advantage of bonus points and cancel the card before the one-year anniversary and never pay the annual fee. (I’ll use a similar strategy with cards that offer airlines miles rewards too!)
I could write a dozen articles about credit card point strategies and still barely scratch the surface, so I’ll keep it brief for now. My main point is that it’s important to use all of the resources at your disposal to drive down the costs of international travel and credit card points can really take you a long way!
5. Crunching the Numbers
Now, let’s break down my $900 vacation. I recently purchased a round trip ticket from Denver to Amsterdam. That ticket ran me $346. My credit card points completely covered my domestic flight from Phoenix to Denver, so no added expense there!
My trip will consist of a total of six nights in Europe: three nights in the Netherlands and three more nights in Belgium.
Each member of my travel group is be responsible for booking two nights of hotels. My hotel credit card will cover two nights in Belgium with plenty of points to spare. My group has agreed to only book hotels with complimentary breakfasts, so we’ll only need to budget for two meals a day.
In the United States, a hearty meal with a beer or coffee costs me about $18. Both countries we’re visiting have a similar cost of living as the US. If we round up a little bit, my food and drink costs for the duration of the trip will add up to roughly $250. I’ve also budgeted for three train tickets at an average of $50 US dollars each, for a total of $150. And finally, I’m allowing myself $150 for discretionary spending at museums, shops, and park fees.
The grand total? $896!
Now that you’ve seen my trip laid out, you can decide if that travel style suits you. Some people would prefer to delay gratification in the name of more luxury. I personally would rather make smaller sacrifices to allow the ability to travel as much as possible, while still meeting my investing goals.
Do you have some travel budgeting tips of your own? Feel free to comment below!