The majority of the citizens view family holidays as one of the best ways to strengthen bonds and want to spend quality time with their loved ones. According to a survey conducted by HomeAway, a leading online marketplace for holiday homes, 3 in 4 families believe that overseas vacations are an opportunity to spend quality bonding time together. The latest household expenditure survey indicates that middle-income households spent an average of $2,280 per year on vacations and this increased with the rise in the income levels.

However, with the actual cost of vacations varies due to a range of factors such as the number of people traveling, airline costs, food choices, and accommodation, overspending on vacation is one of the most common issues we face, irrespective of the amount of budget forecasting made while planning a trip.

A few possible reasons are:

Exceeding planned budget amount

Being cost-conscious is an essential factor that often affects the decision of the travelers to spend money in the right way. However, we tend to spend more as overseas vacations are an opportunity to purchase products which cannot be found in Singapore. Another reason for exceeding the budget is that we end up splurging on branded accessories to keep up with others and sometimes purchase unnecessary items that we do not use. Such expenses affect our monthly budget and consider taking help from the best moneylender in Singapore in case of emergencies.

As per the study conducted by Visa, Singaporean travelers fly more than four leisure trips compared to APAC’s average 2.7 trips and the global average of 2.5 trips. Also, the total spending on international travel by Singaporeans has also increased by 10% as compared to 2016.

Using credit cards

While we ensure not to carry large wads of cash, relying on credit cards to pay for the bills is a bad idea. This is because we lose track of spending along with paying currency conversion fees which ranges from 2.5% to 3.5% for every transaction. As per the Ministry of Finance, 9 in 10 individuals are not willing to pay more than 2% towards Overseas Transaction Fees, but current average may reach even 5% if the payment is made through Dynamic Currency Conversion. Sometimes, we exceed the credit card limit and look for low-interest personal loans for clearing the credit card bills, creating a vicious cycle of debt.

Unfamiliarity with Foreign Currency

For the majority of the travelers, Exchange Rates are the biggest concern as they are unable to ascertain the actual budget required for the trip. This is because they are unable to determine the value of foreign currencies. For example, the value of $50 or $2000 can be understood easily, whereas the value of 750 Yen or 3500 Yen is difficult to ascertain. This creates confusion and sometimes end up paying more than the expected amount.

Getting rid of excess cash

In case of carrying excess cash, there is a common misconception that the foreign currency cannot be used back. Due to this reason, people often end up spending all foreign currencies, rather than bringing back resulting in losing precious money and getting the same converted to use for our routine expenses. Hence, we spend all the money even if there is an opportunity to save.

Although holidays are an escape from reality, we ignore the fact that we have got bills to pay, retirement to plan for and jobs to be taken care of. So, it is important to spend more time in planning finances rather than trips for maintaining the budget.