Saving Money While Traveling, Part 1

I’m writing this post from a coffee shop in Jerusalem, less than a week into a month-long trip to the Middle East.

This trip is something I’ve been wanting to do for years, ever since my last visit here in back in 2004. There was always a hitch, though — too much work and not enough time, or too much time and not enough money — regardless, I was pretty good at finding reasons it wouldn’t work. And then one day, I finally stopped making travel excuses and decided, this is going to happen… the only questions were how and when.

Looking for ways to save money on traveling and stretch your dollar as far as you can? We’ll look at some good guidelines to save you money during your next international trip.

If you’re more flexible with your vacation plans than your budget, there is a lot more strategy to planning a trip than simply picking a destination and buying a ticket. You want to determine the best and most cost-effective place to travel and when to go.

In later posts in this series, we’ll cover lodging, apps, and other money-saving travel hacks. But today we’re going to start with:

  • Destination selection
  • Booking airfare
  • The hidden costs of airport transportation
  • Understanding the currency game

Destination Selection

When and where?

Traveling off peak-season can help reduce the price of airfare and lodging. Sure, most people would love to avoid the (extra-)rainy season in Ireland, but would a little drizzle offset by substantial savings in airfare and lodging be worth it? If saving money is your motive, it most certainly is. Another benefit of traveling off-season is shorter lines (and often lower prices) at museums, restaurants, and other attractions.

I booked my travel to the Middle East at a time when people were not lining up to visit — in fact, major media outlets in the U.S. were warning us about ISIS, and all the violence and terrorism in the region.

My parents both did their best to subtly sway me not to go, but my mind was made up. While it’s important to travel wisely and not put yourself in harm’s way, I felt confident enough about my safety in the Middle East to start looking at airfare. I also registered with the U.S. State Department’s Smart Traveler Enrollment Program, which sends me regional travel updates and provides resources if needed in case of an emergency abroad.

When I saw a round-trip ticket from Chicago O’Hare to Tel Aviv for less than $800, I couldn’t resist. The airfares to Tel Aviv from Chicago are almost always north of $1,000, so a 20% discount right off the bat on airfare goes a long way to making international travel more affordable.

I’ll get into some strategies I use to save money while traveling internationally in more detail below.

Booking Airfare

I remember a college business class at University of Wisconsin-Madison where we explored the algorithm airlines use to price their tickets. The pricing was a function of time until departure, number of seats left, and a couple of other variables that I have since forgotten.

The point of the lesson that stuck with me was that airline tickets fluctuate for a number of reasons — some that make sense, some that don’t — so it pays to shop around.

Keep checking back for flights if you don’t see a price you’re ready to jump on. Most online booking sites have flight fare reminders to notify you when airfare drops down to your selected target price. Of course, being flexible on your travel dates is one of the best money savers available to you. Here are some other ways to save on your flight.

Seat Selection

Nowadays, airlines want to charge you for everything. Don’t bother to pay the extra $49 or $99 for a couple of extra inches of leg room. Instead, try these tips to increase your comfort and save money:

  • Select seats online ahead of time. Continue to browse flights until you find a window or aisle.
  • Look for seats with empty seats next to them in hopes they don’t sell and you’ll have an empty seat or row of seats next to you. I just had a whole empty row to myself on an overseas flight to Amsterdam.
  • Arrive at the gate early and ask the gate attendant if there are upgrades or seat changes available. In my experience, gate attendants are far more lenient about switching seats and tossing in a complimentary upgrade than the attendants at the initial baggage check-in.

Connections

Layovers suck, but more often than not, they will save you money when flying.

While everyone loves the convenience of a straight shot, nonstop flight, adding connections to your flight, while not glamorous or convenient, can drastically reduce your airfare. Is an extra take-off and a layover worth a couple hundred dollars to you? To the budget traveler, it’s most certainly worth looking into.

Be sure to look at the layover you have between your connecting flights. As a rule of thumb, I like to have at least an hour and a half layover between connecting flights to allow a little margin of error in case the first flight arrives a little late. I’m also not a fan of sprinting through airports, so I’ll take a few extra minutes at the gate, which I can spend reading, planning for the trip, or listening to a TED talk or Rosetta Stone on my iPod.

Also, additional connections offer you the opportunity to get bumped — and if you have a extra day of travel tacked on to your trip, a free flight voucher in exchange for spending a couple of extra hours at the airport to catch the next outgoing flight is a nice way to help pay for your next trip.

Earlier this year, I was flying to Miami Beach for a short weekend getaway. My outbound flight was delayed, which means I was going to miss my connection — and my three-day warm-weather getaway with friends would have been reduced to about a day. Rather than wait in the long lines at the airport, full of travelers (some not in good spirits) trying to change their flights, I calmly left and drove home. When I got home, I tweeted, “bummer flight cancelled, so much for a warm weather getaway. I guess everything happens for a reason though. Focus on the positives. .” A couple of short Twitter exchanges later, I received a travel voucher from Delta.

Nearby Airports

My home airport is Dane County Municipal Airport, in Madison, Wisconsin. It’s a regional airport, which means I need to catch a connecting flight to travel to some places in the U.S. and to any international destination. Flying out of Madison is convenient for me, but usually a lot more expensive than flying out of a nearby airport — so settling for the most convenient option is often not the best decision for your pocketbook.

Looking at nearby airports also opens up a number of additional flight options to explore airfare as well as transportation costs to and from surrounding airports. Let’s say I wanted to fly to Tel Aviv again and stay for 10 days:

Flight Options

  • Madison to Tel Aviv: $1,242
  • Milwaukee to Tel Aviv: $1,164 (Milwaukee is about a one-hour drive from Madison)
  • Chicago O’Hare to Tel Aviv:  $983 (Chicago O’hare is about a 2.5-hour drive from Madison)

Chicago savings = $259

Milwaukee savings = $78

The price comparison doesn’t end there though.

As I stated at the beginning of this section, airfare fluctuates, so it’ s important to keep checking back or to set email price alerts to be notified when your desired airfare is available for purchase. But there are other costs to consider before pulling the trigger on the flight from Chicago.

The Hidden Costs of Airport Transportation

How we get to and from the airport is often an untracked and overlooked additional expense of traveling.

How will I get to the airport? Can a friend or family member drop me off? What are the other transportation options? What if I fly from a surrounding airport?

My closest airport, in Madison, is about a 10-minute drive from my house. If I’m flying out of Madison my options are to take a cab to the airport, drive and park, or have a friend or family member drop me off.

Having a friend or family member drop me off at the airport is the cheapest financial decision if someone is available and willing to take me.

But let’s say, using the example above, that I decide to try and save money by flying out of Chicago or Milwaukee instead.

Milwaukee is the next closest airport, about 80 miles away. I have the option of driving to Milwaukee and parking my car, or taking a bus. When driving to Milwaukee, the round-trip mileage is about 160 miles. Assuming my car gets about 20 miles per gallon, that’s 8 gallons of gas at $3.50 a gallon, or around $28 in gasoline charges.

In addition to the gasoline, there are parking charges at the airport. The least expensive of which is the super-saver long-term parking at $6 a day. Resist the temptation to park near the terminal. Daily parking in the garage at Milwaukee is twice the price at $12 a day. So for a 10-day trip, that’s an expense of either $60 or $120. Let’s say for this example I choose the long-term super-saver parking option and pay $60.

The flight has two connections and layovers that average around 2 hours each (which is good by my standards).

Total cost of Milwaukee departure: $1,252 

That’s $10 more expensive than flying out of Madison.

To fly out of Chicago: There is a bus from Madison to Chicago which I can ride for $44 round-trip, thanks to my UW Madison Union Membership. The bus takes me right to the airport in Chicago and picks up just a couple of blocks from my house. The travel time to the airport is roughly two and a half hours, and there’s no parking to worry about.

Total cost of Chicago departure: $983  flight + $44 bus fare = $1,027

In this case, traveling to a farther-away airport is well worth it: I’d save $215 over the Madison departure.

I would also encourage you to explore “park and rides” if they have them available in your area. Park and rides are areas you can drive your car to and get picked up by a shuttle or bus to the airport. These are usually smart economical options for travelers.

Keep in mind that whatever transportation charges you incur on the way to the airport or by parking a vehicle there are part of your overall travel costs. Don’t get lured into a lower airfare and then ignore the hidden costs of getting to the airport.

These additional charges occur at both ends of your trip, as well. Flying into London’s Heathrow airport means you can take the tube (the subway) to any downtown destination for £5.70 ($8.90). If you fly into Gatwick, a more modern airport that’s farther outside the city, you’ll need to buy a £17.70 ($27.70) ticket on the Gatwick Express — and then you still may need to take the tube or hail a cab from Victoria Station to get to your hotel.

Understanding the Currency Game

When traveling overseas, one often-overlooked factor that will impact the overall cost of your trip is the dollar’s exchange rate to the country you are visiting.

While you can save money traveling during the off-season, being aware of the exchange rates and picking a country that will extend your dollar.

Let’s say you have a $5,000 budget for your upcoming trip, and you have your heart set on Europe.

The current exchange rate between US dollars (USD) and the euro is 0.80. That means every dollar you have is worth 0.80 euros, and your $5,000 budget will buy you 4,000 euro.

If you traveled at the end of 2009, the exchange rate was 1 USD : 0.66 euros. That same $5,000 would have been worth only 3,300 euros.

This is just one example of how currency and exchange rates can impact how far your dollars go when traveling. At the time of this writing, the Russian rouble has fallen 23% against the dollar in the past three months. That devaluation of the Russian rouble would have a positive impact on your purchasing power if you were to travel to Russia, and would help you stretch your dollars while abroad.

I don’t expect you to be a foreign exchange trader and understand all the nuances of the currency markets, and I don’t expect you to go to Russia just because it’s a bargain compared to three months ago. But it pays to have a general understanding of the current exchange rates in places you’d like to visit so you can pick a good opportunity to stretch your vacation dollars.

Check the currency exchange rates (xe.com is a good reference) in countries you’re considering traveling to, and see if there are any surprises that might work to your favor — or countries you may want to wait and visit another time if the dollar (or your home currency) isn’t faring too well.

Once your at your destination, compare exchange rates before you exchange money. Since currency exchange kiosks often charge a substantial transaction fee, be aware that sometimes the best overall rate is available simply by withdrawing cash from an ATM. If you do find a great rate, change a week’s worth of money. Make sure to learn the currency so you don’t mistakenly overpay, and get to know the local culture, including tipping etiquette and whether bargaining is expected or frowned upon.

Bonus Tips

  • Airport food has some of the largest markups anywhere, so avoid it whenever possible. Eat a big meal and pack healthy snacks before you leave your house. Almonds and bags of nuts make great filling travel snacks.
  • Download podcasts and fill your smartphone, e-reader, and iPod with entertainment to avoid getting bored and dropping money on books, magazines, or drinks at the airport bar.
  • Take an empty water bottle with you in your carry on. Fill it up once you pass through security.
  • Charge your devices the night before, make sure you bring your chargers, and bring extra batteries as needed.

There are tips here to save you hundreds of dollars per traveler before you ever step foot on the plane. Taking a little extra time to find the right flight, pick the right destination, stretch your dollar a little farther, and keep you full and entertained at the airport are going to help you travel smoothly and save you money.

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