Ways We Willingly Waste Money on Vacation (And How to Stop)

NEW YORK (MainStreet)—We might think we're financially savvy travelers, but a new study by Capital One says that isn't true – given that the majority of us aren't willing to let up on vacation luxuries to save a little cash. In fact, a whopping 82% of those surveyed weren't willing to give up precious leg space for a cheaper ticket, and 70% would rather pay more for a direct flight than save money on an indirect one.

So what about vacationing makes us so dumb with money, and how can we get smarter?

Travel expert Thea Klapwald thinks our expensive alter egos might be to blame. During the course of our normal lives, we worry about money. We budget. We work work hard to earn our lving, and we're not good at unplugging when we get home. When vacation time comes around, we want to take advantage.

"We want to feel 'free' or like we are 'living it up,'" says Klapwald. "We have alter egos on vacation, and they are not always the healthiest ones for us." Those alter egos, perhaps pent up for too long, tell us we need to put frugality aside and unwind.

But then, some of us might overspend on vacations simply, because we don't know better.

According to Laura Michonski, site director for Newyork.com, people turn into willy-nilly spenders on vacation because of "a lack of understanding of just how much a little research can save you money."

Michonski says people are more likely to think about the big stuff, like airplane tickets and hotel prices, but neglect to research elements like food, attractions and transportation. Those things can add up fast and send you over budget.

So whether you're just not sure how to save money on vacation, or you're letting your alter ego buy the leg-roomy airfare this year, you don't have to spend a ton of money through your whole vacation. There are ways to splurge and still save:

Spotting tourist traps

Dining gets expensive, especially in unfamiliar areas where you might be tempted to go with what you know rather than what's cheap. For example, when it comes to big tourist traps like New York City, Michonski says, "Place likes the Olive Garden in Times Square feel easy, because the brand is known, and the location is convenient, but you'll pay a premium for those things."

Instead, use these two quick and dirty tips to find a decent place for food in most areas: When you book a hotel, plug the address into Google Maps and then do a quick search for "restaurants," "food" or "bars." Write down a few for consideration, and then head on over to Yelp for notes on price, food, and quality. Also, it doesn't hurt ask friends and followers on Facebook and Twitter who live in your target destination for restaurant recommendations.

Not buying from the hotel

Skimping on some of the small stuff can be a good idea, too. Klapwald says avoiding hotel stores and refraining from raiding the mini bar are two easy ways to save money. Instead, she recommends you make your own mini-bar stash before checking into the hotel by finding a nearby store and stocking up on your favorite snacks. That way, "You can feel superior in the knowledge that you already saved some money." And if you forgot something small, like toothpaste, ask the concierge.

Avoiding made-in-China memorabilia

Before you leave, you'll probably want to bring a keepsake back with you. But if you're going to buy memorabilia, make sure it's worth it: Do yourself a favor and flip it over first.

"Many souvenirs, especially in Europe, are now made in China," says Christina Ernst, owner of VIP Alpine Tours. "Travelers want a cuckoo clock or linens, and they simply think these are made in Germany since they were purchased there, but in reality they are made elsewhere," says Ernst. Not every country requires products to carry a country of origin seal on them, so if you turn the thing over and can't find where it's made, odds are good it was made elsewhere.

Understanding overseas transactions

Aside from misleading souvenirs, foreign exchange fees also make it easier to spend more than you expected on overseas vacations. According to Sukhi Sahni, a Capital One spokeswoman, the Capital One survey cited in this article "has consistently shown that half of consumers aren't sure if their credit card charges fees for purchases made abroad."

Know what your bank charges for transaction fees so you aren't surprised when you get the bill. Some cards, like those from Capital One, do not have foreign transaction fees. Others charge up to 3%, like HSBC does to its non-'Premier' members. Also keep in mind that many foreign ATMs institute both a flat fee plus your bank's foreign transaction fee applied to the withdrawal amount. This information should be available on the bank's website.

Knowing your limit

It may seem like obvious advice, but stick to your budget. If creating a budget is stressing you out, just keep it simple. For example, if you have a checking account and savings account, keep only what you want to spend this vacation in your checking. You'll be able to monitor your expenses via mobile banking, and you'll also be able to get cash on hand in case of an emergency. Before traveling overseas, be sure to call your bank so your account won't get shut down from flagged charged. Other simple tips like minimizing ATM transactions, not overdoing it at the bar, and opting for public transportation will lower costs without taking away from your vacation experience.

--Written by Craig Donofrio for MainStreet

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