Holiday travel can cause a strange mix of excitement and dread. On one hand, we can't wait to see our family and friends. On the other, those of us who may be last-minute planners end up paying dearly for expensive flights and fees. AAA estimates close to 92 million people traveled during the holidays in 2012, and that number is expected to increase for 2013. To prevent overspending on travel this holiday season, it is helpful to establish a set of rules to cut costs (and stress):
1. Set a budget. Establish a holiday travel budget that includes everything from flights, hotels, car rentals, checked luggage, ground transportation and food. Estimate how much each of these items will cost to get a realistic idea of how much you'll need to spend. Then, create, manage and stick to your budget using an online personal finance management tool like Mint.com from your computer or mobile device.
2. Book early and be flexible. Buying your airline ticket as far in advance as possible is a guaranteed way to save money. The price of flights varies depending on the days you travel. For example, flying during peak travel days, usually two days before or two days after a holiday, will save you significantly. Taking the first flight out on a weekday is often the least expensive; choose a Tuesday, Wednesday or Saturday flight to save more. Airline sites like Hotwire.com offer a flexible date search to help you find the lowest fare.
3. Check alternate airports. Most large cities have several airports nearby, and the difference in fares for those airports can be dramatic. If you're traveling to a midsize city with just one airport, look for cheaper flights to other nearby cities. If you were planning on renting a car anyway, driving an hour to get from the alternate airport to your final destination may be worth it.
4. Take advantage of your credit cards. If you have a credit card that offers travel rewards, using miles or points to book your flights or hotel may offer considerable savings. But be on the lookout for booking fees, which may be higher, and make sure to do a price-to-miles comparison. If you have to spend 50,000 points for a ticket that normally costs $350, and that same 50,000 could also be redeemed for a $500 gift certificate, then paying cash is clearly the better option. Check with your card issuer for protections and deals specific to your card.
5. Plan your ground transportation. By planning your ground transportation in advance, you'll save big bucks. In many cities, it's easy to travel between downtown and the airport via subways or buses. Hotel concierges can often provide up-to-date route schedules and tell you the best way to travel to and from the airport. Knowing when those trains and buses run, and leaving a bit of time for delays on the way to the airport, can help eliminate costly cab or shuttle fees.
6. Feed you and your wallet. Carry snacks such as almonds, apples and high-protein bars while you travel. These healthy, affordable snacks can help you avoid charges for in-flight food, satisfy your hunger during a long layover and are great treats if you are traveling with kids.
7. Pack smart. In 2012, airlines raked in about $3.5 billion in baggage fees for amenities like checked baggage and extra leg room. With fees ranging from $20 to $200 for checked bags, travelers who can pack a carry-on as though it were a full-sized suitcase will discover it's a cost-saving skill. Traveling light will save you money and for the $25 to $50 in extra luggage fees, you can take advantage of hotel dry-cleaning. If you're planning a lengthy stay at your destination, you might consider shipping your luggage by UPS. Four-day shipping for a 55 pound bag from Los Angeles to Chicago, for example, costs $66.24, compared to a $100 airline fee for bags weighing more than 50 pounds.
The bottom line: Traveling requires more foresight than it did 10 years ago, but it doesn't have to be a source of distress. If you can plan ahead by just a couple weeks and stick to your financial plan, like you do a diet or exercise regimen, you will be in good shape faster than you can say "happy holidays!"
Hitha Prabhakar is a consumer spending and retail analyst and Mint.com spokeswoman, the leading web and mobile money management tool that helps people understand and do more with their money.