1) Airfare - The biggest hurdle to most people booking a flight is the expense of getting from point A (where you are now) to point B (where you want to go to). For the purpose of this exercise, we're going to assume that I'm looking for a round trip flight from San Francisco to Copenhagen, Denmark. Here are a few tips on minimizing the cost of airfare:
Don't do that: Be inflexible with your plans. If you want to take a non-stop flight to your destination during the high season using exact dates, you might find that you pay extra for those conveniences. Cheapest fare from July 4-13, 2014 (my preferred dates): $1531
The just OK route: Jump on a search engine like kayak.com and book the cheapest flight during a range of dates during the high season. This isn't necessarily a bad approach, it's just that airlines know that their planes will sell out during the high season so there are rarely any super deals. Cheapest fare in June, 2014: $1188
Better: Research the off-peak season for your destination and then patiently wait for a cheap fare. If you are patient and don't mind going in a non-summer month like May or September, you can save several hundred dollars. I check flyertalk.com almost every day to see what deals pop up. Keep in mind that the fringe weather months are where the superdeals are at (October-November and February-March) Cheapest fare in May, 2014: $785.
It may be good to keep an open mind about both destination and timing, because occasionally incredible fares pop up when you least expect it. Here are a few examples of some very good all-inclusive fares I've either booked or seen:
- Round trip Chicago to Istanbul for $450
- Round trip Philadelphia to Rome for $500
- Round trip San Francisco to Anchorage for $298
- Round trip San Francisco to Hawaii for $350
Keep in mind, the savings may not be worth it if you land in a blizzard. However, there are some places with mild enough winters to make the difference negligible like Hawaii.
Best: Use frequent flyer miles to book to your destination of choice. Cheapest Fare in February, 2014: $61 plus 30,000 miles.
As I wrote in a previous post, you don't necessarily need to fly often to collect frequent flyer miles and tickets. Signing up for credit cards and collecting rewards can net you a free round trip ticket to Europe for doing next to nothing. After you look at the award charts of different airlines, you'll see that certain times of year require far less miles than others. Also, be mindful of booking fees since they can vary greatly. My next trip to Spain will cost me 15,000 miles plus the $61 fee, which made it a no-brainer trip.
2) Lodging - When you land at your destination, you need to make a determination about where you are going to sleep. The options can vary from a 7 star hotel like the one seen below or staying with a friend.
Don't do that: Book upscale hotels right in the heart of where you want to be. Nice hotels in prime locations are going to cost you extra. Not only will you pay the nightly rate, but there is an expectation that you'll tip the staff. Based on my visit to Dubai a couple years back, I was told that the 7 star hotel's (pictured above) cheapest room runs about $500/night. Needless to say, I ended up staying at a $45/night hotel in a suite instead.
The just OK route: Book hotels in sub-prime locations or book a condo. If you don't mind commuting to where you want to be the sub-prime location hotels can save you a lot of money. There are quite a few bed and breakfasts in Europe outside major cities for $30/night or less. Just don't book so far out or in a dangerous area that your day is ruined by the commute or area. Renting a condo is another ok option, because they are usually cheaper than hotels and you don't have to worry about tipping the staff frequently.
On a side note, my trip to Hawaii in my senior year of college was during the off-peak season (April) and we didn't book any rooms in advance. None of the hotels filled up, so we negotiated better rates walking up than what was available on the internet. It was a hassle, but a money saver.
Better: Stay at hostels. If you prioritize a decent location and don't care about the quality of your accommodations, then go the hostel route. $30/night and less is easier to find at a hostel. Camping is even cheaper if you don't mind it. It's not really my preference, but if it's between not going on the trip and being frugal, I choose frugal.
Best: Stay with a friend. I realize that this isn't always possible, but it certainly provides the most savings if you can swing it. There are also couch surfing programs if you are extremely adventurous.
3) Transportation - All of my vacations have required some sort of transportation from the airport and to the places I want to go. Since you are away from home, you need to decide how you will get around without your personal car.
Don't do that: Take a taxi everywhere you want to go. You'll find that taxi drivers aren't universally honest and the chances of driving up your transportation costs is high. I have so many nightmare taxi stories that it's a wonder that I ever take a taxi again.
The just OK route: Hire a tour company to be your driver for the trip. In some lower cost of living countries, this actually is a way to save money and simultaneously have a translator without racking up taxi costs. I think we had a $100/day rate for this service in China for the 4 of us. Split 4 ways, this actually was dirt cheap.
Better: Rent a car. You can save some money while having 100% time flexibility for your trip. I calculated during my last trip to Italy that taking public transportation would have cost me the same as renting a car. Just make sure you have an upgraded GPS to give you directions and that you book an automatic if you can't drive a stick shift. Automatics are very rare in most countries and a bad GPS can take you places you don't expect.
Best: Get you friend to show you around and offer to pay their gas. Make sure you are close with your friend before you go before banking on them. Alternatively, stay in one city and use the local public transportation. The moment you go from city to city costs go way up. Surprisingly, in Europe flying may be the cheapest mode of transportation between major cities.
4) Food - Even though you are in another country or state, you still need to eat without a kitchen/refrigerator in most cases.
Don't do that: Eat at the hotel restaurant. After a long day, the easy thing to do is eat at your hotel restaurant because it's right there and they put it on your tab that you can square up when you check out. The problem is that it's almost always going to be more expensive than going out to find a cheaper option. If it looks anything like the restaurant above, be very careful.
The just OK route: Go to restaurants pointed out to you by hotel clerks. It was amazing to me that I was always funneled to restaurants that had the same costs as eating out in the U.S. ($10-$15 a plate) even though we were in a foreign country with a much lower standard of living. The locals working in the tourist industry have reciprocal agreements to send you to spend more money at higher end restaurants, so look at the menu before committing to eat there.
Better: Find restaurants where locals go. Buying food from local vendors on the street or restaurants that don't see many tourists were dramatically less expensive. There might be a language barrier, but you probably will save money.
Best: Buy your food from grocery stores. The cheapest option by far is to get your food from grocery stores and make your own meals. This can be very inconvenient, but you might be able to get by on less than $10/day versus the $30+/day for eating out for every meal.
5) Entrance fees - When you travel a long way, you end up in locations that require entrance fees. You should have already made the decision in advance if you are willing to pay it. Sometimes the fees are completely justified and other times the fees don't match the value of entering.
Either Pay the fees or don't: There are only two options here. Do your homework to determine whether paying the entrance fees are worth it. Paying extra to go inside the Egyptian pyramids are not worth it, but paying the entrance fee to see Machu Picchu is. You don't want to regret making the wrong choice in retrospect.
Summary
There are literally thousands of money decisions you will make by traveling somewhere away from home. It's really easy to overspend and splurge while out of your comfort zone. Nonetheless, a disciplined traveler can get by on a shoestring budget if they are willing to make a few sacrifices and do their homework. You should follow an experienced traveler on your first trip to get the hang of which decisions lead to costlier paths versus the shoestring budget approach that doesn't require you to pay off credit cards when you get home.
