I hope you had a wonderful weekend! Happy Fourth of July week!
LRPC’s Monday Morning Minute for this week, “Are You Financially Prepared For Your Summer Vacation?” (presented below) comes to you courtesy of Charles Schwab & Co. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share enlightening, useful information with you each week.
Thinking about taking a vacation this summer? Check out the suggestions from Schwab below on how to adequately prepare financially for your summer adventure.
Have a wonderful week!
Are You Financially Prepared For Your Summer Vacation?
By Carrie Schwab-Pomerantz, Charles Schwab & Co.
- Saving for a vacation is only one part of being financially ready to travel.
- Make sure you consider all the costs of travel from airfare to pet care.
- A little upfront financial planning can help make sure your travel budget isn’t eaten away by transaction fees, extra charges, and bad exchange rates.
Summer vacation season is here! I write a lot about the importance of saving in advance for a particular goal like a trip. But, saving is only one part of being financially ready to travel. While it’s easy to keep things like plane reservations, hotels and sights to see top of mind when preparing for a trip, there are a lot of other financial details to handle — or at least anticipate — to make sure your dream vacation doesn’t turn into a financial disaster.
Preplanning for expenses — big and small
When planning a trip, the big items are fairly easy to identify — things like airline tickets, hotels and rental cars. But that’s just the beginning. Consider what you’ll do when you get to your destination. If you plan to travel by trains or buses, it can make sense to look online for passes or advance-purchase tickets that offer a discount. Tickets to many major tourist venues can also often be purchased online in advance. It may save you money — and will surely save you time as you push past the hundreds of people waiting to get them!
On top of your daily expenses on the road, there are myriad smaller expenses close to home to consider. Will you pay a house sitter? What about boarding a pet? Will you park your car at the airport or pay for transportation there and back? How much will you spend on gifts for family and friends? These things can add up quickly and should ideally be part of your travel budget. It’s much better to account for them now than to find yourself coming up short later.
Handling money — before and during
Dealing with money in a foreign country can be complicated and thinking ahead can save you money. Here are some things to help you get a better deal:
- Get a no-foreign-transaction-fee credit card. Many banks and credit card companies charge foreign transaction fees, which can be up to three percent. Don’t pay more than you have to. There are several companies that offer travel cards without this type of fee. You can easily compare card features at sites likecreditcard.com or nerdwallet.com.
- Use an ATM for cash. When traveling abroad, it’s often easier to pay with cash. You’ll get a better exchange rate at an ATM than at a currency exchange service, but always use a bank ATM for added security. Some banks won’t charge a fee (or they will refund it), but if you are going to be charged an ATM fee for each withdrawal, take out a larger amount at one time rather than a series of smaller withdrawals. If you prefer to have some cash on you when you first arrive, get a small amount of the local currency through your bank.
- Beware of dynamic currency conversion. While you’ll generally get the best exchange rate by using your debit or credit card, always ask for the bill in the local currency. It may seem like a convenience when a vendor or hotel offers your bill in dollars — called dynamic currency conversion — but you’ll likely get a much worse rate.
The cost of staying connected
We take our smartphones for granted here at home, but things like roaming and data charges and international calls can cost a small fortune once you’re out of the country. Make sure you understand the international service your cell phone provider offers and how to avoid unwanted costs. An alternative is to simply buy an inexpensive cell phone with a SIM card at your destination.
Perplexing financial differences
From tipping to taxi fares to Value-Added Taxes (VAT) — every country will present you with different customs and ways of handling money. The VAT, a consumption tax on purchases, can be particularly puzzling to American travelers — and costly. In the EU, it can add from 15 to 25 percent to the price. Fortunately, as a traveler, you can apply for a refund if you have the right paperwork. The details vary by country, so do a bit of research. There are many travel websites that offer advice on how to handle different rules and practices to make sure you’re not being taken advantage of financially.
An ounce of prevention
Ready to go? There are a few more things you’ll want to do — just in case:
- Contact your credit/debit card company. Some credit card companies no longer require it, but it can’t hurt to let them know the dates you’ll be traveling and what countries you’ll be visiting. There’s nothing more uncomfortable (and potentially scary) than having your credit cards denied.
- Make a list of your credit cards. Be sure to include the international customer service number. But don’t carry it in your wallet! There are also toll-free numbers listed on the Visa and MasterCard websites.
- Photocopy your passport. This will make it much easier to replace if your passport is stolen. If the worst happens, you can find information about replacing passports at travel.state.gov.
I’m all for having new adventures, but thinking a bit in advance will help ensure that you have a fabulous time.
Lawton Retirement Plan Consultants, LLC (LRPC) Monday Morning Minute is crafted to provide decision-makers with important information about the economy, investments and corporate retirement plans in a format that allows a reader to consume the information in less than 60 seconds. As an independent, objective investment adviser, LRPC has access to many sources of research and shares the best and most relevant information with its readers each week.
Lawton Retirement Plan Consultants, LLC is a Milwaukee, Wisconsin-based independent, objective Registered Investment Adviser (RIA) providing investment advisory, fiduciary compliance, employee education, provider management and plan design services to retirement plan sponsors. The firm currently has contracts in place to provide consulting services on more than $400 million in plan assets. For more information, please contact Robert C. Lawton at (414) 828-4015 or email@example.com or visit the firm’s website at http://www.lawtonrpc.com. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser.
This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance, tax, legal or investment advice. Each plan has unique requirements and you should consult your attorney or tax adviser for guidance on your specific situation. In no way does Lawton Retirement Plan Consultants, LLC assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations. Investors should carefully consider investment objectives, risks, charges and expenses. The statements in this publication are the opinions and beliefs of the commentator expressed when the commentary was made and are not intended to represent that person’s opinions and beliefs at any other time. The commentary does not necessarily reflect the opinion of Lawton Retirement Plan Consultants, LLC and should not be construed as recommendations or investment advice. Lawton Retirement Plan Consultants, LLC offers no tax, legal or accounting advice and any advice contained herein is not specific to any individual, entity or retirement plan, but rather general in nature and, therefore, should not be relied upon for specific investment situations. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser and accepts clients outside of Wisconsin based upon applicable state registration regulations and the “de minimus” exception.
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