Austin teaches English in Japan and is the author of Foreigner’s Finances, a blog that deals with personal finance abroad, travel, and other international topics.
Finding a cheap plane ticket for a vacation or trip abroad is always cause for celebration. However, excessive celebration can blind you from the fact that the plane ticket is just a sliver of the entire travel expense. The actual travel portion of a trip – plane, bus, gas for the car, subway, etc. – is usually the most expensive aspect of traveling and the most deceiving for budgeting. It is the hidden costs of travel that can cause an exciting adventure to quickly turn into a financial nightmare.
I’ll show you a real life example of this and demonstrate how adding an extra 70% to your travel budget can cause those hidden travel expenses to be handled properly. Leaving home and seeing the world is a great time in anyone’s life so plan ahead so you can stop worrying about money, and start enjoying your trip.
My girlfriend is planning on visiting me in Japan and we found a one-way plane ticket from Chicago to Tokyo for a reasonable price, $484. The excitement set in and we were ecstatic that she would soon be visiting. However, a second glance at the receipt, as well as consideration of the logistics of her getting to my apartment, made that $484 quickly turn into $1000.
The plane ticket was advertised as $484, but the fees tacked on by the airline were unexpected. Fees for fuel, the USA Transportation tax, and the Canada Airport Improvement Fee caused that affordable plane ticket to actually cost $599 – a 24% increase from the advertised price. (insert pic of ticket)
Picking her up and getting to my apartment was another financial issue that we overlooked. I’m located eight hours from Tokyo and the cheapest option for getting to my apartment is an overnight bus that costs $90 each way. Add on a round-trip ticket for me, a one-way for her, and we are now out $270 in bus fares.
We’re also making a weekend trip out of her arrival in Tokyo, so we have to budget at least $60 for travel expenses around the city.
These hidden costs add up fast. Originally, we started with a $484 plane ticket to get her to Japan, but the actual cost of getting her to my apartment is $929 – 91% more than the original ticket price!
By breaking down the numbers to see the true cost of travel, we can see how important it is to take action ahead of time.
How do you deal with these costs?
Whatever you think your travel expenses will be – budget for 70% or more. This seems a little steep, but by planning your expenses ahead of time – which means you may have to put that trip off a month or two – you can properly save and avoid using credit cards or student loans for trip expenses.
Don’t let what appears to be a low price for airfare on Kayak or Orbitz deceive you. Right away, add $100 to the price for a rough estimate of taxes and the actual cost of your plane ticket.
Also, take five minutes to research the cost of getting to your actual destination, not just the airport. Thanks to Google, I could find the exact price of train tickets around Tokyo, the price of an overnight bus, and suggestions for cheapest ways to travel from fellow travelers online. Every site could be translated to English and was simple to navigate. Just five minutes of research can give you a more accurate picture of travel costs, which will prevent you from having to go to your credit card in desperate financial situations.
If you end of saving money on travel because you budgeted too much, congratulations! Have that extra drink on the beach, buy your mom an extra souvenir key chain, or just keep that extra money in your wallet. It’s a good problem to have and you’ll appreciate it when you return home.
Planning trips can be stressful and expensive, but by planning for the biggest expense – the travel portion – you come out ahead in the end. The excitement of a trip should not be held down, so don’t let your travel expenses suppress your adventure.
Photo Credit: Olastuen