Saving for the Season: Tips for Curbing Holiday Travel Costs

The holiday season is a time for celebrating with friends and family, but the stress of paying for all of those gifts, meals and trips can put a damper on the festivities. Getting to Grandma’s house (or that relaxing beach) isn’t as cheap as it used to be—airfare and hotel prices tend to skyrocket around this time—but a little advance preparation can make a big difference when it comes to travel costs. Here are some of the best ways to save on your holiday getaway so you can focus on the fun stuff.

Travel Rewards Credit Cards
These credit cards are a great way to pay for holiday travel since your purchases throughout the year can actually help you pay for that holiday vacation. You can maximize the possible rewards value by approaching the use of a credit card strategically. Decide in advance which rewards are most important to you: air fare, hotel points or plain old cash. Make sure you know how to effectively build up rewards; by figuring out the best ways to use those cards throughout the year you’ll wind up with more rewards in place come holiday travel time.

Lowering Costs
When it comes to purchasing plane tickets, it’s always worthwhile to ask, am I saving enough? Tweaking the days you’re willing to fly is an important way to get the cheapest rates, and booking plane tickets the right amount of time in advance is key. Typically between 3-4 weeks in advance of your trip is the optimal time to book, so for Thanksgiving, you’ll want to start looking in October.

Avoiding the most popular travel dates is equally crucial. The day before Thanksgiving is one of the busiest flight days. Thanksgiving itself, though, is comparatively cheaper. You may think traveling on Thanksgiving day would cut into your enjoyment of the holiday, but your feast and family time might be all the more enjoyable if you got a sweet deal on airfare. The same holds true with Christmas or other holidays. Keeping your itinerary flexible can result in major airfare savings.

If you need a hotel or rental car as well as a flight, bundling those bookings can save you serious money. Not all airlines or travel sites offer the same promotions, but for many, a package deal receives the same discounts as tour operators. Taking a few extra minutes to check out packages offered on different travel and airline sites can yield big savings.


Savings Accounts
One way to take the pain out of planning for holiday travel costs is to spread out the financing over several months. Around the time of the Great Depression, banks began to offer Christmas Club accounts, in which people would deposit small amounts of money throughout the year. The funds could only be accessed without penalty after the beginning of the holiday season. Christmas Club accounts are still available, most often through credit unions. You won’t get much (if any) return on your money, but interest rates aren’t the point. The benefit of a Christmas Club account is that once November rolls around, you’ll know you have a pile of cash squirreled away to pay for holiday travel.

If your financial institution doesn’t offer Christmas Club accounts, you still have other options. You can do the same thing with a regular savings account—you’ll just need the discipline not to access the set-aside funds without the deterrent of bank-enforced penalties. Or you can open a short-term CD. If you get a tax refund in March, put that money into a 6-month CD and the CD will mature in the fall, just in time to help you pay for plane tickets or car rentals.

Travel costs don’t have to take the joy out of the holiday season. With some patience and advance planning, you can skip the stress and get straight to sweet treats, time with the family, or that relaxing white sand beach.

Sara Collins is a writer for NerdWallet, a personal finance site that helps readers stay informed about subjects like understanding section 529 college savings plans

 

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