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Financial Planning for the Smart Vacationer

As the official vacation season for Americans kicks off with the Fourth of July, you may be sorting out the financial implications of this summer’s holiday plans. The 2002 American Express Leisure Travel Survey found that travelers are expected to spend an average of $2,031 on vacation expenses this year.

With a sum like that at stake, you should plan how you will use and protect hard-earned vacation money before you leave home. Here are some basic tips to help you do this:

Work with a travel agent: Planning a trip by yourself isn’t necessarily better or more economical. A travel agent can help find the best prices, give you the benefit of his or her own broad travel experience, and provide helpful information on foreign currency exchange.

List priorities and stick to them: For example, if tasting the local cuisine is what’s most important, you should plan to spend extra money on dining out and figure this in when considering the purchase of expensive souvenirs or other items.

Shop smart: Avoid impulse buying. You should plan what to spend on food, souvenirs and other items – then shop around, compare prices, and then decide on purchases. To find the best shopping areas, talk to previous visitors or ask the concierge.

Make purchases with a card tied to a rewards program: By doing this, you can redeem points toward free flights, receive upgrades and at the same time continue earning points toward your next vacation for the purchases you’re making.

Be ready to pay several different ways: It’s wise to use a mixture of payment instruments while traveling: credit cards, travelers cheques and cash.

• Cash in small denominations is convenient for gratuities and other incidental expenses. Travelers Cheques are a very safe form of money because they are fully refundable if lost or stolen.

• A charge or credit card can help you keep track of spending and obtain a record of all purchases.

American Express Card products also provide other benefits and services such as emergency card replacement, emergency medical and legal assistance, assured reservations and car rental insurance. Cardmembers can purchase American Express Travelers Cheques fee-free through its network of more than 1,700 Travel Service locations worldwide (not all services available at all locations and all are subject to local laws and cash availability).

Look ahead: If travel is an important part of your lifestyle, plan ahead for next year’s trip. Set aside an interest-bearing account and make regular deposits. With this approach, you don’t have to worry about the drain on your budget when it’s time for Vacation 2003.

July 4, 2002

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