When traveling, we all know that the unexpected happens more than we’d like it to. You can be the best travel planner in the world and still find yourself in an unfortunate situation half-way across the globe. Without proper planning, you may not have the necessary resources available to tackle the challenges that arise. That’s why it’s important to have a financial backup plan on your next vacation.
What’s The Worst That Can Happen?
- Medical Emergencies
Did you know that 20%-50% of international travelers develop some sort of illness? Even the best informed travelers can fall victim to illnesses when traveling abroad. Depending on the severity of the illness, you may even need to visit a local doctor or hospital. In addition to having extra cash resources available, consider obtaining travel insurance for potential large medical expenses.
- Other Emergencies
While flight horror stories are a rare occurrence, issues resulting from flight cancellations, delays, and even hotel overbookings do happen regularly. Last minute changes to flights and hotels are notoriously expensive (take it from me), so it doesn’t hurt to have some additional liquidity on hand just in case.
- Upgrades & Fun
Let’s be honest, we don’t always stick to a perfectly planned itinerary. We love to go out, explore, and try new things. After all, isn’t that the point of traveling? Be honest and well prepared by adding a little padding to your travel budget to accommodate for little luxuries.
How Much Extra Should You Plan For?
As a good rule of thumb, it’s best to add a 10% padding to your estimated trip costs. This should cover the little expenses such as upgrades and unplanned five star dinners. For the bigger emergencies, such as flight changes and medical emergencies, it’s wise to have additional liquid assets easily accessible.
What Are The Best Financial Resources for Emergencies?
For starters, a good travel insurance plan is your best protection in case of a medical emergency. You just never know where you’ll be when a medical issue occurs and having cash on hand may not be enough.
Making sure that your credit card bill is paid off before you go on your vacation is also crucial. For example, if your limit is $3,000 and you have half already used on bills, you could run into trouble. For this reason, we recommend taking your full credit card limit with you when vacationing. Of course, be sure to let your credit card provider know that you’ll be traveling (and where you’ll be traveling to) to ensure that any emergency transactions are not declined due to fraud.
For even larger emergencies, ensure that a portion of your savings account is liquid and available and if all else fails; you can dip into your retirement fund.
We all hope that our adventures will be free from emergencies and unexpected expenses. By thinking ahead and planning accordingly, you can ensure that the unexpected won’t dampen your otherwise fabulous vacation. Happy travels!