Summer and vacation go together like peanut butter and jelly. More than 80% of vacation over the summer according to annual surveys from travel site The Vacationer. While vacations are (mostly) about fun and family, there are a few financial planning elements to consider. Here are the three topics we bring up with clients ahead of summer travel.
1. Update your will and estate plan.
For many of us, there’s a disconnect between planning for a fun getaway and planning for the worst-case scenario. And yet, most estate planning experts refer to travel as a key life event that should trigger you to review and update your plans. (Other triggering events include marriage, divorce, births, and the like.)
In particular, review your healthcare directive and guardian designations for your children, if applicable. An up-to-date healthcare directive can help ensure you receive proper care if you’re injured on a vacation adventure—perhaps you’re knocked temporarily unconscious learning to surf in Hawaii. Up-to-date guardian designations help protect your kids if something more serious were to happen.
2. Get strategic about spending.
You work hard for your money and vacation is the perfect time to enjoy it—but no one wants to waste money on unnecessary transaction or exchange fees. Beyond that, you may be able to take advantage of different perks while you enjoy time away.
If you’re traveling abroad, focus on exchange rates, foreign transaction fees, and ATM fees. The dollar has been fairly strong post-pandemic, making foreign travel particularly appealing. In 2022, the dollar hit parity with the euro, and while that didn’t last, the dollar still remains strong against most major currencies, as tracked by the U.S. Dollar Index.
Still, currency prices fluctuate in real time. Generally speaking, paying with a credit card will give you the best, most-current exchange rate on a purchase, which makes paying by card an appealing option. However, check to see if your credit card charges foreign transaction fees. If it does, consider looking for a card that doesn’t, as it could save you a significant amount.
The same is true of ATM withdrawals. Withdrawing money from an ATM may offer better exchange rates than a money changer, however ATM withdrawals in foreign countries may carry several fees. Local banks tend to charge a flat transaction fee for outside withdrawals. Plus, your home bank likely charges a similar flat transaction fee for withdrawals at outside or foreign banks. However, your home bank may also charge a foreign transaction fee on the withdrawal, which is often calculated as a percentage of the funds you withdrawal.
Tip: Think through whether you’ll need cash when traveling. Most places that used to be cash-only, such as street vendors or small shops, now accept credit cards while some transactions—like tipping hotel staff—remain cash only. In some locations, you may be able to tip with U.S. dollars (it may even be preferred!), but consider tipping with larger bills, as many currency exchanges won’t accept or change singles.
As you might imagine, these fees can add up, so check the terms and conditions of your credit and debit cards before you leave. Getting strategic about how you pay may just save you enough to cover a nice meal out with your family.
If you’re traveling domestically, many of the foreign transaction considerations won’t apply. However, many of the travel-focused credit and bank card options offer domestic perks as well, in the form of cashback rewards, discounts with preferred vendors, and more.
3. Make copies of important documents.
It’s easier to replace important documents (or get by without them) if you have copies of those documents on hand. We recommend making copies of key documents—passports, drivers licenses, insurance cards, and the like—before you travel. You may also want to make copies of booking confirmations and receipts.
If you’re traveling somewhere remote, you may want to create paper copies or save digital images of important documents to your phone. (Make sure your phone is password protected.)
If you’re traveling somewhere connected (i.e., with internet access), the Quorum Client Portal is a great place to store these documents. The portal offers military-grade security to protect your documents, and you can log in from anywhere if you need access. Storing important documents on the cloud also reduces the risk that your information falls into the wrong hands if your luggage or phone get lost or stolen while traveling.
If you’re planning a big trip this summer (or any time of year) and have questions around the best way to budget and plan for the trip, want help evaluating different credit card options, or simply want to share your trip recommendations, we’d love to connect. (We can also help you set up your client portal if you haven’t already.)
