Study Shows Consumers Plan to Spend Big on Vacations, Vehicles and Furniture
- A spring survey by the Freedom Financial Network found that most consumers plan to make a significant purchase in the next 12 months.
- Only 15% of survey respondents do not plan to make a large purchase.
- The most popular big-ticket purchases are travel, home-related items, and cars.
A new Freedom Financial Network survey found that 85% of consumers plan to shake their pandemic fatigue by making a large purchase in the next 12 months. Despite concerns about inflation, increasing gas prices, and higher interest rates, most indicated that they were willing to embrace a return to pre-COVID living even if it costs more.
We’ll go through the report this week and provide tips for saving on these big purchases despite higher costs.
Buying Back Normal
Despite COVID, record-setting inflation, and intense competition for everything from rental cars to new homes, consumers are ready and willing to spend their way to normalcy. According to surveyed consumers, the most popular planned large purchases in the next 12 months include
In addition, most do not plan to pay in cash – making themselves vulnerable to rising interest rates and increasing the cost of what they buy.
Revenge Spending (Wisely)
So-called “revenge spending” to beat the COVID blues is a trend, and experts say there’s nothing wrong with treating yourself – within reason. You can minimize damage to your finances by looking at your budget, determining what you can afford, and establishing how you’ll pay for it. Then stick to your decisions.
In addition, look for opportunities to save money on whatever you buy – travel, home furnishings, or a vehicle. In this first of three posts, we’ll cover ways to save money on your next vacation.
How to Save Money on Travel
Researchers in multiple studies have concluded that experiences like travel deliver more happiness than material things. So a trip might be the smartest way to increase your well-being. But you don’t want to undo its effects by creating debt and financial worry. Here are a few good tactics for paying less for travel.
If you’re flexible about when and where you go, you can snag a bargain even in today’s overheated vacation market. Many “go-to” destinations have less-expensive, less-crowded alternatives that offer just as much fun.
How do you find those “alt” destinations? Try checking out sites like Kayak and Travel Zoo. Kayak has a neat tool that lets you input your airfare budget and airport and it will show you destinations worldwide within your spending limit. You can also search for an entire month to see which days offer the cheapest fares.
Flexibility also means being willing to fly at less popular times of the day – early mornings, late nights, and Tuesdays, Wednesdays, and Saturday afternoons.
When searching for a vacation destination, sign up for email alerts from Google Flights, Airfarewatchdog and Kayak. Other popular sites with travelers include The Flight Deal, Secret Flying, Travel Pirates, and Scott’s Cheap Flights.
You can also find deals on social media. Google “[your airport] flight deals on social media” to find accounts showing specials from your home airport.
Book in advance
Want to save a bundle on next year’s travel? Book now. Advance booking can get you enormous discounts and allows you to set and forget your vacation planning. For instance, cruise operators routinely discount fares by 50% or even more if you book a year out. Early booking allows you the best selection of cabins and you may also score perks like free wifi, gratuities, drinks packages and shipboard credits.
The other advantage of booking in advance is that it gives you a year to pay for your trip so you don’t return to a giant, buzz-killing vacation bill.
Book last minute (with a package)
If you’re trying to book a flight when fuel prices are soaring, you can dodge them by choosing a bundled vacation. Operators nailed down flights in advance (when fuel charges were lower) and you can take advantage of this by booking an entire package including airfare, hotels, and auto rentals.
Most airlines have bundled deals and so do sites like Expedia and Tripadvisor.
Skip baggage fees
Baggage fees have evolved into major money-makers for airlines. But there are ways to avoid padding their bottom line.
First, check out the many packing hacks on YouTube and travel blogs to avoid overpacking. It’s not that hard to travel with carryon only, even for longer trips. If you can’t live without a suitcase full of clothing, get some travel packing bags that let you squeeze an entire suitcase’s worth of clothing into a carryon sized bag. Experience the joy of not schlepping a huge clumsy case.
Another option seasoned travelers love is the airline credit card. If you know which airline you’re taking, apply for its credit card. Most offer miles, passes to airport lounges, and a free checked bag. Or fly Southwest Air, which still allows two free checked bags per flier.
Use travel rewards
This may seem obvious. Of course, you want to use those valuable rewards if you have them. But it’s not always easy. Your wife has 12,000 miles on one credit card, and you have 3,500 points on a hotel card and 67,000 miles on an airline program – how do you plan a vacation around this?
You have a couple of options – combining points and pooling points. Many rewards programs allow you to combine points from other programs until you have enough to redeem for travel. And some also allow you to pool points with another traveler. So maybe you and your wife can pool points to get free hotel rooms and combine points to score at least one free or reduced-price flight.
Consider downloading a reward tracking app that helps you see all of your rewards in one place, which can make it easier to book travel, maximize rewards when you spend, and avoid losing rewards to expiration dates.
Rental car options
The shortage of rental car options in destinations like Hawaii made headlines last year as travelers found themselves desperate and paying through the nose for transportation. But you might be able to save with these lesser-known sources. Autoslash and Costco rental car websites help you find the best deals, and Costco members can grab extra discounts and upgrades.
Turo is another option. It’s a site that connects vacationers seeking cars with private citizens looking to rent their autos. The variety of cars ranges from daily drivers to luxury land-yachts, and prices can be lower than with traditional rental agencies.
Finally, the best option might not involve renting a car at all. Investigate local public transportation like metros, buses, trams, even bicycles – and rideshare and taxi fees. In Paris, for instance, you can buy a pass that covers all public options for a week for less than the cost of a single taxi ride or a day’s auto rental. And the rail system can get you to longer-distance destinations faster than driving and for less than tolls.
Save on food
One of the biggest expenses for many vacationers is the cost of food – three meals a day plus snacks and maybe cocktails take a huge toll on budgets, especially at full-service hotels. You can beat this by deciding which meals are splurges and which meals are just fuel. Budget accordingly.
Maybe take a walk in the morning and pick up a cup of coffee and a bagel instead of accepting the $18 hotel continental breakfast (fancy talk for juice, coffee, and baked goods). Or rent a condo with a kitchen (or at least a microwave and minifridge) so you can eat in sometimes. Look for lodging that includes a happy hour in the evening and a decent breakfast in the morning. And do your splashing out on a spectacular lunch sometimes instead of a costly dinner.
There are many, many ways to save on travel, even when you’re dealing with rising fuel prices and competing with millions of vacationers. The smartest thing you can do with your travel is to budget in advance and decide what your priorities are – lodging, food, entertainment, and transportation.
Spend less on things that are not as important to you so that you can afford a memorable splurge where it counts. If you’re a foodie, for instance, suck it up in a smaller room or a standard economy flight to get more Michelin-starred experiences. If you’re an adventurer, spend a few days camping out and then enjoy the contrast of a five-star hotel for a couple of nights.
Be creative, smart, and disciplined. So that you’re not still paying for this vacation when it’s time to plan next year’s.