How to Enjoy Summer Vacation Without Emptying Your Pockets

NEW YORK (MainStreet) – Nobody wants to think about budgeting, automatic deposits or credit card austerity while they're on vacation — but it doesn't hurt.

With AAA quoting an average gas price of $2.75 per gallon across the U.S., travelers are paying nearly a dollar per gallon less than they were a year ago. That has AAA forecasting an uptick in summer travel and the National Retail Federation suggesting an increase in summer spending.

“Following a harsh winter, many Americans are trading in their snow boots for flip-flops and making plans to start the season with a vacation getaway,” says Marshall L. Doney, AAA president.

According to a survey released this month by Gallup, 57% of Americans. say lower gas prices are making a noticeable difference in their household finances. Of that group, 27% say lower gas prices are making a "big difference." Though 42% are using the extra money to pay down bills, 24% aren't shy about saying that they're spending those savings. Granted, gas prices were also low in the first quarter of the year — when GDP growth slid into negative territory — but big swaths of the U.S. aren't dealing with winter weather that's keeping them at home.

While kicking in a little extra to help the economy is nice and all, you're no help to anyone if your vacation leaves you mired in debt. With help from John Rosenfeld, head of everyday banking for Citizens Bank, and the folks at AAA, we've come up with the following eight tips that will give you a summer vacation without stretching your finances:

1. Build a budget: Don't just wing it, as if money isn't an issue. If your finances would take a hit from overspending on vacation, it may help to put a realistic budget in place to make sure you come out of it unscathed.

“Nothing’s worse than booking a fabulous trip and then paying for it, literally, months or even years later,” Rosenfeld says. “In addition to 'big ticket' costs at your destination, factor in the incidental costs along the way," including lunch on the go, souvenirs and the like.

2. Pay yourself first: This isn't just a great rule of vacation planning, but one of the cornerstones of saving. Financial institutions haven't put automatic deposits, transfers and deductions in for you to simply ignore them. If you want to dedicate a specific amount of each paycheck to your vacation savings, you have more tools at your disposal than just spreadsheets and self-discipline.

“To take the sting out of the cost of your vacation after you get back, start saving for it now by setting up an automatic deposit to your savings fund from your paycheck or checking account,” Rosenfeld says. “A specific amount of money can be transferred automatically on payday before you even see it.

3. If there's a plane, have a plan: Julie Hall, a spokeswoman for AAA, notes that there's far more to the cost of air travel than just the ticket price. Depending on which airline you're using, there may be fees for checked bags, carry-on bags, boarding passes, food, drinks and entertainment. Yes, seat selection and boarding privileges can tack on added costs to your flight, but even factors beyond your control can get costly.

“Also consider change or cancellation fees in the event you need to alter your travel plans,” Hall says. “These can be higher than the original cost of the ticket.”

4. Know when to book: This goes for just about every aspect of your trip. If you're still trying to pick a destination and money is an object, try traveling off season. In summer, that means braving the ugly temperatures and unpredictable weather patterns of Hawaii, Florida, Mexico, the Caribbean and other warm-weather destinations.

If you're still looking at airfares, however, the days of super-low last-minute options are just about over.

“Typically, the best deals on domestic airfares can be found between three months and 30 days in advance,” AAA's Hall says. “Last-minute flights often come with steep prices, so plan in advance.”

If you're booking a hotel or restaurant reservation, however, social media has made procrastination a sound strategy.

“Follow hotels, restaurants and destinations on Facebook and Twitter, use consumer ratings sites and sign up for social coupon sites,” Rosenfeld says.”If you cover all of your social media bases, a special offer from the best place in town may pop up just as you arrive.”

5. Package when possible: AAA recommended this route, but it's a universal truth on travel sites including FareCompare, SmarterTravel and Travelocity. If a website or travel company bundles airfare, hotels and/or car rentals, chances are pretty excellent that some part of that equation will be discounted deeply enough to make it worth your while.

We've recommended it for holiday travel in years past, but it's a strategy that's just as sound in June or July as it is during months when Christmas music is being piped through the nation's airports.

6. Don’t borrow trouble: Remember when we told you to save? Well, don't consider your card's line of credit extra “savings.”

We're not saying you should be a troglodyte and not use cards at all. We're just noting that there are certain consequences to using cards as payment — especially cards with high interest rates.

“A credit card is a great convenience, especially when traveling, but if you don’t pay off the full balance, you will incur charges that will add to the expense of your vacation and may make your vacation memorable in an unintended way,” Rosenfeld says. “If you’re traveling abroad, also research if your card has fees tied to each foreign transaction, as these will add up very quickly.

7. Consider some insurance: Yes, it costs extra up front, but it can come in handy if your luggage gets lost or your flight is canceled. As we've noted, it can also come in handy if you're traveling abroad and suddenly get sick or injured. Yes, many other countries have socialized health care. No, it doesn't cover your costs.

8. Go mobile: It's 2015 and you're an adult. Not only do banks offer mobile banking apps that help you check balances, transfer funds, find ATMs and perform a whole lot of other tasks while you're on the road, but most credit unions offer this service as well. You don't have to balance a checkbook anymore, but you also have no excuse for spending without knowing your balance. Banking apps are your last lines of defense, but they're good ones.

— Written by Jason Notte in Portland, Ore.

To follow the writer on Twitter, go to http://twitter.com/notteham.

This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.

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