8 Ways to Account for Inflation in Your Travel Budget

A smart goal to keep your finances on track is to always be able to pay off a vacation in full once the credit card bill arrives – traveling for fun shouldn’t trigger hefty interest charges. For any trip – but especially when travel inflation spikes – set a vacation budget before booking anything. Then decide what fits into that budget.

If you have saved up airline miles, credit card reward points, or hotel loyalty points, redeeming them toward your next trip can be a financial lifesaver. It’s a good idea to look for ways to maximize your redemption value, too. In some cases, for example, transferring credit card points to an airline partner might help you get the same ticket for less.

For more, read “Start Planning for Your Next Vacation with Travel Rewards Credit Cards”.

Unless you’re locked into a specific travel window, you may be able to save by avoiding peak travel times. Prices for flights and lodging tend to be lower during “shoulder season,” which is industry-speak for off-peak weeks and months when the weather can still be plenty good.

Locked into a specific time to travel, such as making it home for a holiday? Even so, you might be able to find lower-cost plane tickets. Before booking your ticket, track how prices can change depending on which days you travel. Tickets might cost less if you fly midweek instead of the weekend, for instance. Click the “flexible dates” option when looking online for flights to get a sense of what your savings could be.

If you run into sticker shock for a favorite hotel or location, would staying one less night work better for your budget? A five-day getaway that you can comfortably afford might prove more enjoyable than a six- or seven-day stay that stretches your budget a bit too far.

And while the whole point of a vacation might be to take a break from everyday responsibilities, staying somewhere with a kitchen and self-serve laundry can be an effective way to combat travel inflation. Being able to cook a simple dinner or pack your own box lunches, even just once or twice during your stay, will reduce dining-out costs. Similarly, opting for a simple breakfast that can be stored in a mini-fridge can help avoid costly continental breakfasts.

Having access to laundry facilities might make it feasible for your family to check fewer bags. The average cost is usually about $30 per bag for domestic flights, which, for a family of four, can add up. Or check your airline rewards credit card benefits to see if you are eligible for free checked baggage.

There is no getting around the fact that car rental prices in 2022 have been significantly higher than in years past.¹ Can you and your travel companions make do with a cost-effective sedan or compact car?

It also pays to think strategically about whether you need the car for the entire vacation. Taxis in a city or resort setting might be more economical, and then you can rent a car for the day or two when you want to do some exploring. Not renting at the airport is typically a money saver, too, as you won’t be charged airport-imposed fees.

Some credit cards will impose a foreign transaction fee when using your card outside of the country – a fee that can quickly add up and lead to a surprise on your next statement. When traveling internationally, using a credit card with no foreign transaction fees can help save money.

It’s also a good idea to be aware of dynamic currency conversion, a service that processes transactions in your home currency instead of the local currency. While it might seem convenient, local currency is usually the more cost-effective option. For more, read “Should You Pay in Local or Home Currency when Traveling Abroad?”

If the high cost of a getaway is a budget concern, taking time off at home can be both relaxing and more budget-friendly.

The trick is to put just as much time into planning a staycation as you would a traditional travel trip. That’s the best way to ensure your time off is set up for maximum fun and relaxation. No chores. No house projects. No checking work email. And be sure to treat yourself each day. For example, a few splurge meals likely won’t break the budget given all you’re saving by not taking a long road trip or paying for plane tickets. If cooking qualifies as a chore, then order takeout or buy prepared meals. It’s your vacation time!

Also, aim to do something out of the ordinary each day. Maybe check out a museum, or take a day trip to that spot you’ve been meaning to visit for ages. Or, simply enjoy the guilt-free freedom to do nothing if that’s what would make you happy.

The best travel rewards credit cards can help you combat travel inflation for vacations to come. The key is to use a card that has points or miles accelerators that will help you earn rewards for the travel purchases you’re already making, including flights, hotel stays, or dining. That way, you can earn rewards now that can be redeemed toward future adventures.