We somehow feel the pressure of holiday costs in 2022 especially if we relate to inflation. Compared to pre-pandemic travels, some spending has exploded this summer. However, a financially wise trip can still be quite affordable if the savings for this area have been coached. Let’s talk about the travel budget and the effects of price increases. I’ll also leave you with some tips on how you can save enough money and be ready to go on holiday.
The biggest plane prices were in 2013
In an analysis that extends worldwide but especially at the European level, it seems that until 2020, the rates for air travel had a downward trend. The peak in the last 10 years was in 2013. This year the average costs of plane tickets were almost 30% higher than the prices in February 2022.
This is good news, given that airfare and accommodation are one of the biggest pressures on your travel budget. However, we can see accelerated price growth in air tickets.
Accommodation prices are volatile
Hotel prices are consistently higher in peak season than in September or May, for example.
Accommodation translated in the need for hotels and motels, suffered one of the largest variations of any price category throughout the Covid pandemic and far beyond. Accommodation has seen increases of over 25% in the last 6 months.
Car rentals issue
Car rentals had one of the biggest increases in price, with summer of 2021 travels particularly affected. Prices reached a crucial point in July 2021. Although they slightly redressed, starting February 2022, they are still about 40% more expensive than the last 10 years average.
For February 2022 we see prices up 24% compared with the same month of 2021 and up 38.6% compared to February 2020. With this data in mind, be prepared for big prices, aligned with higher summer travel demand. Maybe you should allocate a bigger budget to this area.
Restaurant meal expenses are constantly increasing
Food prices are constantly rising every year and 2022 has brought some not-so-happy news.
If you have access to a kitchen to cook your food (in a vacation home or hotel suite) might consider stopping at some local markets for the chance to buy quality special ingredients that will enjoy cooking with.
Entertainment spending is also seeing price increases
Like restaurants, entertainment prices are seeing fairly consistent increases — except a small decrease in 2020. Fortunately for consumers, price increases haven’t been as drastic as dining out.
In February 2022, the average price for movie, theater, and concert tickets also increased. Choose wisely when booking worldwide tickets for such cultural activities.
Travelers can also choose some lower-cost activities such as hiking, and visiting museums, and aquariums.
Generally speaking, prices are definitely on the rise, with rental cars being one of the expenses most likely to give you another shock. Early financial measures for the vacation budget are the solution at hand for relaxation and financial well-being.
How do you plan your holidays financially?
Do you have a long-awaited trip on your bucket list, maybe even one that’s been postponed since the pandemic started? It could be Safari, traveling to the Caribbean for 2 weeks of surfing, watching the Northern Lights in Iceland, or a culinary journey across Italy. You know you’ll make it happen… one day, but maybe you’re stuck on budgeting and saving. That’s why Educated and Rich exists!
However, your distant travels will remain the stuff of daydreams until you decide to turn them into reality. You’ve already chosen your destination – now you just need to find a way to pay for it.
How do you start?
If you want to save money for travel, now is a good time to start with the basics and maybe kick some of those bad financial habits we all pick up along the way.
Remember that you are running a financial marathon, not a sprint.
You are making a significant commitment in the medium and long term, which will sometimes be very difficult to keep. Saving enough money to cover your travel budget or anything else is hard on the soul and requires sacrifice, which is why so few people succeed. The right attitude is everything!
Just as important – how many times are you willing to try and fail until you’ve successfully learned all the habits and strategies that will put the money in the bank and help you travel more?
Track your spending!
Set aside a day this weekend, buy your favorite bottle of wine (you’ll need it), and review all your accounts. Find out EXACTLY what your finances look like.
I know, you’ve probably heard this before.
Tracking expenses is an important part of learning. You can not only reduce but even eliminate certain unnecessary expenses.
But are you doing it? Regularly? It’s a powerful way to identify how much money you’re spending each month on random things you don’t need.
What are your monthly bills?
Only a mortgage? Some rent instead? Utilities left? Insurance or credit card interest? Don’t forget about various things. Games, clothes, toys.
Now, pay attention. You might be mesmerized by how much you spend monthly. Little things tend to add up.
Building that kind of awareness and tracking spending takes time. That’s the nature of habits – you don’t suddenly change your behavior overnight and good things come with time.
Other tips to secure your travel budget:
- Open an account for vacation
- Remember that the only reason you should be touching vacation savings is to save money for it.
- Keeping your savings separate from the bank where you have your main accounts can reduce temptations.
- Set your goal, and don’t hold back from saving
- Budget your vacation
- Save before you spend
- Make extra money from other sources (hobbies for example)
- Come to a 1:1 financial coaching session, for many more financially successful holidays to come!