11 money, credit management tips for extended vacations
Consumer finance expert, author and “Opening Credits” columnist.
As footloose as you may feel when about to embark on an extended adventure, financial responsibilities remain both at home and on the road.
Money management can be challenging enough under normal circumstances, but when you’re away for a month or more, it’s easy to lose control. Essential expenses might go unpaid, balances can build and fraudulent activity can flourish.
Before launching on an long trip, set up a vacation-friendly money and credit management system. Here are 11 tested tips from intrepid travelers and financial experts.
1. Invite your checking account along.
The cash in your checking account must be monitored when you’re away, says David Reiling, CEO of Sunrise Banks. Since he is often on the road for long stretches, Reiling turns to technology.
“Preparation is vital. I put text alerts on my checking account so I can see the money being withdrawn with each transaction, wherever I am,” says Reiling. “Most banks allow this. Go to the website, log into your account, and find the messaging feature. Add your phone number and turn texting on.”
Once done, you can receive notices on your smartphone when your balance dips below a certain amount, a paycheck is deposited, deductions occur and when checks clear.
2. Open a trip-only account.
“Most banks will allow you to set up a temporary checking account, and give you a separate debit card,” says Trusted Travel Girl blogger Valerie Wilson, from Los Angeles. “These accounts often have a several month lifespan and can be a great way to limit yourself and your spending.”
Determine the necessary cash you’ll need for the trip, deposit it in the fresh account, and then dip in along the way. The activity on your regular checking account will be greatly reduced so you won’t have to check it as often as you would if you were relying on it for your vacation.
3. Opt for a prepaid card.
To really slash checking account management efforts, use a prepaid card for your trip’s expenses. Niamh DiOrio, a real estate professional living in McLean, Virginia, who travels extensively recommends them. You won’t have to wonder if there is enough cash in your checking account to cover normal bills as well as travel expenses, since you won’t be drawing money from it. Nor will you overdraw your checking account and be hit with fees.
“I purposefully calculate how much I really think it would cost for me to enjoy my vacation and put it on the prepaid card,” says DiOrio “It must be within my budget while still having the best time. That is why I am going on vacation, right? I don't overspend, and I still do everything I want to do.”
4. Designate a backup.
Bonnie Truax leads an almost totally nomadic life that she chronicles in her blog 43BlueDoors, but her holdings and accounts are still based in the U.S. For this reason, assigning a trusted friend to act as a backup is essential. While she’s away, she has her mail go to her husband’s brother and wife.
“Many financial and legal documents have to be mailed, and having someone there to help is very important,” says Truax. “Some companies send warnings or notices via mail only, like one we got from our homeowners association that a rail on the porch was broken and had to be fixed as soon as possible or be fined.”
If you’ll be gone for months, identify someone you trust implicitly who can read documents or open mail, just in case something needs immediate attention. This is especially important if you’ll be gone during tax season. You don’t want 1099s and other highly personal documents to fall into an identity thief’s hands.
5. Integrate credit and money management into your itinerary.
According to wanderfilledlife travel blogger Grant Sinclair, from Woodstock, Georgia, an ideal way to make sure your financial affairs are in fine shape is to actively build money and credit management meetings into your vacation schedule. It should be a planned part of your trip.
“Wherever we will be, at least once a month we make sure there will be cell service and Wi-Fi to connect to the internet,” says Sinclair. “We will budget at least an hour for the time it will take, just in case there will be difficulties. Then we will sit down comfortably together and go through all our bills and spending. You don’t need an office. Do it in a public park on a nice day!”
6. Ice out fraudsters.
What can ruin a fabulous trip fast? Fraudulent credit activity. To stop a crook from opening loans and credit cards in your name, Truax recommends freezing your credit reports for the duration of your trip.
“Right now, we are in South America and there is a lot of fraud that occurs here, so we froze our credit before we left,” says Truax.
If you won’t be applying for credit products or requesting a higher charging limit on existing accounts, it’s a wise decision. With the security freeze in place, lenders can’t access your credit history, so they are unlikely to grant a request.
Be sure you have enough borrowing power for your trip, though. If you need a higher limit, you will have to thaw your credit reports to get approved, which can cause a delay in having access to the extra funds.
7. Automate credit card payments.
A 2107 survey from the electronic payment company ACI found that 56 percent of all bills are paid online, so chances are you are doing this, too. If your credit cards aren’t connected, that’s the next step.
“The best thing you can do concerning credit card bills when traveling long-term is to set up autopay on all of your cards,” says Wilson. You can arrange to have the minimum, a set sum, or the entire balance paid without you doing a thing, thus avoiding late fees, jacked-up interest rates and delinquencies that will hurt your credit rating.
Still, you’ll need to have enough cash in your checking account to cover the payments and continue to monitor your credit card statements via your bank’s mobile app. For protection, avoid free public Wi-Fi and stick to the much safer, password-protected networks offered at hotels and internet cafes.
8. Prepay household expenses.
While you’re off adventuring, the fewer mundane household bills you must deal with the better. As long as advance payments won’t put a dent in your vacation funds, consider satisfying some of your bills for all the time you’ll be gone, says Byron Ellis, a certified financial planner with United Capital Financial Advisors, from The Woodlands, Texas, who is also a big traveler.
Knowing that your rent or mortgage, utilities and insurance premiums are taken care of can be a huge relief. Contact these companies and explain how long you’ll be away and that you’d like to prepay for those months. Most will happily oblige.
9. Consolidate due dates and set reminders.
Multiple due dates can cause confusion when you’re in vacation mode, says Ellis. “I tell people to get their bills timed to the same day,” he says. “It’s a hassle to pay them when they’re all due at various times of the month. Ask if you can move the due dates around so you only have to manage your credit cards and expenses once during the month you’re away.”
You should also set up reminders on Google or iCalendar tied to your smartphone or email account, which will ping you before you’re late. Personal finance apps such as Mint will do the same.
10. Charge and pay.
Using credit cards while on the road is a smart idea for many reasons, including valuable trip cancellation protections, but no one wants to return to a bunch of statements indicating overwhelming debt. To sidestep this problem, charge but don’t wait until you have to make a payment.
“Cards like American Express have a feature on their app to pay off certain purchases as you go, so there are no surprises at the end of the month,” says Wilson. “This is perfect for those who want to earn points on their cards, but may have difficulty keeping purchases in check while on vacation.”
In fact, you can charge any purchase with any credit card and then delete the balance with the funds in your checking account as long as you have password-protected internet access. Another tool is an app called Debitize, which deducts what you spend on credit card from your checking account immediately and pays the bill with the stored funds every week.
11. Use apps to track transactions.
At home you probably know how much you spend on groceries, entertainment and transportation. All that changes when you’re traveling, which can lead to budgetary confusion and excess credit card debt. The antidote: Download a travel specific budget tracking app to your smartphone.
Caitlin Furio, whose blog Furiosities focuses on ethical tourism, says it’s particularly helpful when visiting different counties. “I love TrabeePocket,” says Furio. “It’s a simple budget app that translates currencies into your home currency, so you don’t have to keep doing mental math about what you spent! I also use SplitWise when I’m traveling with other people to create a record of everything we spent together, and then it splits the costs.”
Whatever tools or techniques you gravitate toward, you’ll be in a far better place once you put your key back into your front door than if you didn’t. There is no downside. Managing your money and credit when you’re away is sure to give you peace of mind.
“Life is still going on whether you’re in Eastern Europe or in the Nevada desert,” says Sinclair. “You have to keep up with the bills so you don’t come back to a steaming hot mess!” Indeed.
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