8 Tips on How to Financially Prepare for a Vacation

Finances, however, don’t take a vacation – not even in summer. In this article we’ll take a look at:

• how to comfortably save for your vacation in advance,
• what to keep in mind when choosing modes of transport,
• how to pay safely and cost-effectively,
• when is it necessary to have cash,
• how to avoid fraudulent practices by merchants in tourist destinations,
• why is travel insurance essential.

A holiday is a legitimate expense you should plan for

You don’t need to feel guilty for spending money on a holiday. It’s a relevant expense that deserves a place in your budget. Rest is essential, so in a way, it’s an investment in your future productivity, mental health, and happiness. Allocate an appropriate amount in your budget for a holiday – one that you can comfortably afford.

How to save for your holiday throughout the year

A holiday is usually not a small expense, but if you start saving for it in advance, careful planning can help you save hundreds of euros through better deals on flights and accommodation. It’s certainly not wise to finance a holiday with a loan or any instalment plan. Going on a holiday at all costs – even when you have more important expenses – is not financially sensible either. That’s why it pays to save gradually and set aside a portion from every paycheck throughout the year.

Ideally, use a separate savings account for this purpose or our conservative strategies Smart Deposit or Wallet. This way, you won’t be tempted to spend the money earlier, and you can even grow it slightly. Set up a standing order and save the same amount each month. For example, if you know you want to allocate €1,200 for your summer holiday, contribute €100 a month to this account.

Useful Tips That May Come in Handy

A vacation usually makes us much less sensitive to prices, and we generally tend to spend more. On the contrary, if a drink costs €10 at home, we might think twice before ordering it. But on holiday, we’re more than happy to indulge even at higher prices – after all, we’re on vacation. Merchants know this and take advantage of it, sometimes selling the same goods at higher prices, and in some cases using borderline fraudulent techniques. In the following 8 steps, I’ll share what you should definitely keep in mind when financially planning your holiday.

1. Transport

Consider which mode of transport poses the most cost-effective option for you. If you’re travelling as a couple, it may not be worth-it to travel long distances by car. However, if you’re a larger group, renting or using a larger car may be more economical, as not only it can carry more people but more luggage too, all while allowing for splitting the fare cost among multiple people. Don’t forget about proper vehicle insurance, toll costs, and fuel prices abroad.

Air travel is now accessible to everyone thanks to low-cost airlines. During peak season or times of high demand, however, even low-cost tickets can climb to three-digit amounts. Keep in mind that luggage is always charged separately, and you should check your baggage size against the airline’s limits, which can vary slightly. A suitcase that one airline accepts may not pass with another.

Book flights in advance and compare prices on search engines like Skyscanner or Google Flights. Sometimes even a traditional airline may be more cost-effective than a budget one, thanks to included baggage or arrival at an airport closer to your destination, saving you time and transport costs.

It’s generally advisable to book tickets at least 6–8 weeks in advance. If you’re flexible with travel dates, you’re more likely to find cheaper connections.

Don’t forget to factor in the cost of transport to the airport itselt and any potential parking fees.

2. Paying safely 

Whether travelling within the Eurozone or beyond, always prefer paying by card – even better, by mobile phone. Paying via mobile or smartwatch is a safer method because it prevents your card details from being copied, not to mention the convenience. However, even though most merchants in Europe now accept contactless payments, you should still take your physical card with you.

A credit card is especially useful when travelling. If a deposit is required, for example when renting a car or booking a hotel, the bank’s money is used for the hold instead of your own holiday funds. In the US in particular, using a credit card is much more common and often even required.

3. Cash

If you’re staying in large European cities, you generally won’t need cash. However, there are countries – even within Europe – where cash is still a very common payment method, such as Albania, Moldova, or even richer countries like Germany, Austria or Ireland. Many tend to forget that other countries may not accept card payments to the same extent.

Source: ECB

It’s generally not recommended to carry too much cash. For short trips within the EU, around €100 per person – ideally in smaller denominations – is sufficient. Rural areas or less developed regions, however, may require more cash.

Check the availability of ATMs and your bank’s withdrawal conditions before you travel.

If you’re travelling to the USA, it’s worth carrying some cash in US dollars.

For more exotic destinations, it depends heavily on the location. In developed countries, exchanging euros is usually not a problem, but in less developed destinations, it’s better to carry US dollars, as they are generally easier to exchange than euros.

4. Payments outside of the Eurozone

If you are going to pay by card, check the exchange rate offered by your bank. Look for the “foreign currency – sell” rate. If the payment terminal offers you the choice to pay in the local currency or your home currency (so-called dynamic currency conversion), always choose to pay in the local currency – e.g., in the Czech Republic pay in Czech crowns, in the United Kingdom pay in pounds, etc. Otherwise, you risk being charged an unfavorable exchange rate or paying additional currency conversion fees.

It’s a good idea to exchange cash before you travel, but it’s not strictly necessary – you can also exchange money on site. However, check the indicative exchange rate for your destination in advance, you can usually find it on the website of your country’s central bank. If the rate offered at an exchange office differs significantly from the one published by the central bank, it’s likely a tourist trap. Generally, if you see very large differences between the buy and sell rates on the exchange list, it’s an unfavorable deal.

5. Tourist traps

Where there are many tourists, there’s also a high concentration of scammers.

Overpriced restaurants, shops, tourist stalls, and souvenir stores – avoid impulsive buying. First, get familiar with the local environment and choose places away from the main tourist routes, often just a side street away.

If you’re in a country with a different currency, always convert the price into euros to avoid being overcharged due to unfamiliarity with local prices.

Beware of tickets for tourist attractions you don’t actually need. A sightseeing bus tour of the city or a river cruise can often be a tourist trap.

If you arrive by plane and want to get to your accommodation, prefer local public transport, where you know exactly how much you will pay, over taxi drivers, or use apps like Bolt or Uber.

If you arrive by plane and want to get to your accommodation, prefer local public transport, where you know exactly how much you will pay, over taxi drivers. Or, if you still wish to have the comfort of a personal vehicle, you can use apps like Bolt or Uber.

If you travel to EU countries, Iceland, Norway, or the United Kingdom, you can use the free information and assistance services of the European Consumer Centre.

Good preparation can save you a lot of money – read Google reviews or look for answers on discussion forums. Check reasonable prices for your destination and don’t be afraid to say no if something seems too expensive. Stay alert, because even if you’re prepared, a scammer can persuade you into a “cheaper” or “better” offer.

6. Flight delay compensations 

If your flight is delayed by more than 3 hours, you are entitled to compensation of up to €600. 

Eligibility for the compensation:

• Flight from the EU or with a European airline
• Delay of more than 3 hours (measured by arrival time, not departure)
• Delay not caused by extraordinary circumstances (weather, strike, technical fault)

If your flight is delayed by more than 2 hours, the airline must inform you about the expected delay and provide adequate care (refreshments, phone calls, or accommodation if necessary).

7. Insurance

Travelling always carries some risk of inconvenience or complications, which may not even be your fault. It’s therefore essential to have adequate travel insurance, primarily covering your health. Hospitalization abroad can cost thousands of euros.

The key is to have coverage for accidents and medical expenses, and if you’re going to the mountains, also for mountain rescue services. Luggage, trip cancellation, and liability insurance are optional, depending on your situation. Basic travel insurance in Europe can cost around €3 per day, depending on additional cover.

Healthcare in the USA is particularly expensive, so comprehensive travel insurance is absolutely essential! 

Why isn’t the European Health Insurance Card enough?

The blue card entitles you to necessary healthcare in EU countries, Iceland, Norway, and Liechtenstein. You will receive the same care as local residents, but you will also pay the same co-payments and fees. It doesn’t cover private healthcare facilities, mountain rescue services, or repatriation.

If you want to avoid situations where you have to pay extra, make sure to arrange travel insurance so you can enjoy your holiday stress-free.

8. Traveling doesn’t have to be expensive 

In recent years, travel has become increasingly accessible, and thanks to social media, certain places have become overcrowded with tourists. However, travelling shouldn’t just be about visiting all the main attractions in tourist centers – it should also be about discovering and experiencing the local culture.

Of course, you’ll want to see the main landmarks, but on your way there, you’ll encounter merchants selling everything from chimney cakes and keychains to toys, paintings, and attractions you’ll buy simply because you think, “I’m on holiday, I’ll treat myself.” This can easily push you over your planned budget.

However, you can travel without “tourist luxury.” You can buy souvenirs at local markets – items truly tied to the place. You can enjoy views from hills instead of observation towers or rooftop bars, rent shared bikes to explore hidden corners of the city, or hire a car to go completely off the main routes.

Travel and relax 

Whether you decide to spend your vacation on the beach, exploring other cultures and places or trekking through nature, with Finax your money will continue to work for you at all times.

I wish you a lot of lovely memories and safe travels!

Invest and relax!