Travelling without breaking the bank

14Mar/100

WHEN planning a holiday, "my number one rule, is always do research", says Joey of Kuala Belait.

Indeed, the consensus is a little research goes a long way in avoiding monetary mishaps.

Whether you plan to go on a family holiday, take a second honeymoon or even go on that weekly business trip overseas, the words budget and travel might have seemed an odd pairing. However, that's all changing courtesy of the Internet. the definition of budget travelling is also changing. Websites dedicated to the principle of "less is more" (such as AirAsia.com and Lastminute.com) have cropped up as the first places to check when planning to travel.

Travelling these days has become very affordable for most people especially since airlines are offering lower airfares and travel options. Gone are the days of the $1,000 ticket to Kuala Lumpur. a short flight to Kota Kinabalu can now cost as little as a meal for two, at only $45 onwards.

As such, more people across various income segments take advantage of cheaper airfares to travel or visit relatives abroad.

Rosalee (not her real name) recalls her travel plans falling through while on holiday. "I'd arranged to stay with a friend in London (to save money) and travel around Europe together, but at the last-minute, they couldn't meet me. I hadn't done any research about the place and had used almost all my savings just to get there. So I was in a pretty bad situation financially."

To save money, she says, "I walked around a lot to save money on transport. It's actually a good way to get to know a city quickly, which you might not get to do otherwise. Public transport is also handy, and there are often discount cards for students, youths and families. some transport systems are even free, she says.

RBA and AirAsia jets parked at the Brunei International Airport. Picture: BT/Rudolf Portillo

If you're really unprepared and find yourself short of cash on holiday, any tourist office in your destination will be more than willing to help you out with finding cheap accommodation, transport and even things to see and do for free, she says.

"You don't really have to sacrifice luxury for a tight budget," Rosalee says.

However, frequent travelling does come hand in hand with extra spending, so it's still important for anyone going on a holiday to practise wise money management.

Another way a traveller can save money is by booking in advance.

"Book your air tickets well in advance and always check the websites of airlines," says a representative from the travel industry. especially during promotion periods, this will usually guarantee greater savings, as special fares are offered during certain periods such as low season.

If possible, avoid travelling during peak seasons like summer and at the year end, which are the most expensive times to travel. if this is unavoidable for those with children, due to corresponding school holidays, then you may want to consider booking all-inclusive packages that include airfare, accommodation and tours. This is not only convenient but will usually save you money as well.

Do not be tempted to finance your holiday on a loan. Unless you need to travel due to an emergency and have insufficient funds, then perhaps this would be an option to consider.

Otherwise, holidays and vacations are intangible and you have nothing substantial to show for it at the end, yet you are left with a loan to service. instead you should save up for your vacation, thereby making it more meaningful. You can do this by either sitting down with a travel agent or your bank representative to determine how much you will need to finance a holiday, and then setting aside a minimum amount of cash each month till you've reached your goal amount.

Prudent use of your credit card is also advised.

Depending on the issuing bank of your credit card, it is good to find out what kind of benefits you can take advantage of while abroad. For example, Standard Chartered credit cards occasionally have promotional offers on travel such as special air fares in addition to ongoing year round benefits such as discounts overseas at selected hotel, dining and shopping establishments, such as in Singapore and Malaysia, thereby generating more savings on holiday necessities especially hotel accommodation.

When booking airfares online or paying for larger transactions like hotel bills, consider using your credit card to settle the bill. some credit cards offer monthly instalment payment facilities where you can convert the transactions into interest-free monthly instalments. This frees you up from having to deal with a big bill now and will instead spread your payments out over six months and above.

If used wisely, this option is actually a very good alternative to carrying large amounts of cash to settle bigger bills and yet allows you some breathing room for when you return from holiday to settle your bills.

You can also earn reward points accumulated from transactions made and use them to redeem for various rewards such as air miles or shopping vouchers.

Eng Siok Tin, general manager of wealth management for Standard Chartered, says, "It would also be good to find out if your ATM card allows you to make overseas cash withdrawals and if there are ATMs near the location you are staying. Most banks charge a minimal withdrawal fee for overseas withdrawals so consider this an option to retrieve funds for emergencies only."

Controlling the urge to spend is also a must. It's easy to overspend when going on a holiday simply because you feel you deserve a bigger treat or because you know you won't be able to buy certain items back home or simply because it's inexpensive. These are not viable reasons to spend, especially when you are using money that you don't have. in this situation, Standard Chartered advises that the only way you can control overspending is to practice strict discipline. You might be asking, "What's so important about budgeting on a holiday? Shouldn't I just carry a credit card in case I run out of cash?".

Credit cards are, frankly, the easiest way to encourage overspending (whether you're travelling or not) as you're less likely to recognise that your money is being spent and have unlimited access to your funds.

A clever way to curb this would be that prior to leaving, reset your credit card limit to the monthly minimum amount that you would be comfortable with should you run out of cash on hand. This sets you in the right frame of mind to spend smart. Unless you're certain that you will be able to manage your bills once you return home, the end result of a compulsive shopping spree abroad may not be worth the stress of later having to deal with large bills which you don't actually have the ability to pay off.

Travellers should also consider security measures when going on holiday.

Eng says people should always notify their credit card issuing bank of their travel dates and destination. "This will help to ensure that your credit card is tagged with an alert to allow overseas transactions, and ensure that any other suspicious transactions be alerted in case of credit card loss or fraud."

You may also want to consider getting travel insurance when travelling as insurance will cover you for medical emergencies, delayed flights, lost baggage and such.

The bottom line is your holiday should not be one that is fraught with stress or guilt over the way you have managed it financially. it should be an occasion where you can really relax and enjoy. if you think you don't have enough funds to go for a holiday then consider revising your plans to a cheaper, closer destination or even changing dates to a later time when you have saved up enough to go for a holiday.

Travelling closer to home will often save you money but still give you a change of direction, a representative from the travel industry said.

"The Asean region is good for that because you have a lot of different cultures within a small region and countries like Vietnam and and Malaysia are popular choices," says Joey. "I plan to travel to Iceland somewhere in the near future, maybe around the end of this year or beginning of next year whenever I can get my holiday. I choose it for its culture, its scenery ... to experience what it's like to live there. There's no telling what can or cannot happen when you're abroad, and adapting is key in that sense. But it's still important to figure out beforehand what I should and shouldn't do, how much I should spend, and to just be prepared." The Brunei Times

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Travelling without breaking the bank