The Top 5 Ways Americans Pay for Travel

Flights and hotels could be busy this year. A recent survey by Empower found that over 90% of Americans are planning domestic travel in 2024, and they expect to spend an average of $1,163. For the 37% who are planning an international trip, they expect to spend an average of $2,904.

If you’re hoping to take a trip of your own, one of the main challenges is figuring out how to pay for it. For some helpful ideas, here are the top five ways Americans said they plan to budget for and afford travel.

Getting a side hustle to earn extra money is popular financial advice. Americans appear to be taking that advice, too, as nearly half are using side jobs to fund their upcoming trips.

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If you have the time for it, a side job could be a great way to increase your income. Let’s say you start working for a food delivery app and net $20 per hour (after setting aside money for taxes). By working two or three weekends per month, you could make another $300 to $400.

There are lots of side hustle options. Some of the most common are deliveries, driving for ride-hailing services, dog walking, and tutoring. Try to find one you enjoy doing, so it doesn’t feel like a chore.

About one-third of Americans pay for travel using a windfall of extra money. At this time of year, many Americans are getting tax refunds, and it could be a sizable amount. The average tax refund in 2023 was $2,903 — coincidentally, almost exactly the same amount people are expecting to spend on international travel.

You can’t always rely on this kind of extra money, but when you have it, there’s nothing wrong with spending some on yourself. Consider using a portion of it for saving or investing, as well. That way, you can also make progress on your financial goals.

3. Travel rewards/loyalty programs (32%)

Another popular way to pay for travel is with travel rewards. Many airlines and hotels operate loyalty programs where you can earn points or miles every time you use them. There are also travel credit cards that earn rewards you can redeem to cover travel expenses.

This is my favorite way to save money on travel. I usually save $5,000 or more on travel expenses each year thanks to my travel cards.

At a minimum, it’s a good idea to sign up for a loyalty program account with any airlines and hotels you like. It’s free, after all. If you don’t mind opening a new credit card, check out The Motley Fool’s Ascent’s picks for the top travel rewards cards to get started.

4. A dedicated savings account (21%)

About 2 in 10 Americans have a savings account set up specifically as their travel fund. You could either open a new savings account for this or see if your current account lets you set up savings buckets for different goals you have.

A dedicated savings account for travel is a good way to keep your savings organized and to motivate yourself to set aside money for traveling. You could transfer over $100 per month, $200, or more, so that you always have some money saved for your next trip. Make sure to check out high-yield savings accounts, so you can earn as much interest as possible.

5 (tie). Physical travel fund and budgeting apps/software (19%)

Instead of a savings account, 19% of Americans prefer a physical travel fund. Some go with the cash stuffing method, where you put cash into envelopes for all your expenses and savings goals. Others go with an old-fashioned piggy bank.

Equally popular were budgeting apps and softwares. These can come in handy if you’re looking for places to cut back on your spending and free up more money for your trips.

There’s more than one way to pay for a vacation

Those numbers add up to way more than 100%, because most people don’t use just one method to pay for travel. They use two, or three, or more.

If you want to travel more without worrying about how you’ll pay for it, setting up your own travel fund is a good place to start. A high-yield savings account is normally the best way to go, since your money will be safe and earning a competitive rate.

Using travel rewards cards and joining loyalty programs are also great ways to cut your travel costs. And if you want to give your travel fund a boost, setting aside extra money you receive or earn through a side job are both good options.

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