NerdWallet's Smart Money Podcast: How to Budget for Trips – When to Book and How to Avoid Hidden Fees

Release Date: March 17, 2025

In this episode of NerdWallet's Smart Money Podcast, hosts Sara Rathner and Megan Coyle delve into the intricacies of budgeting for travel. They provide actionable strategies to help listeners maximize their travel dollars, whether through saving cash, leveraging miles, or finding the best deals. The conversation is enriched with the latest travel data, expert insights, and practical tips to ensure that your next trip is both enjoyable and financially savvy.

1. Travel News Highlights

Spring Break Trends and Pricing Increases The episode kicks off with a discussion on upcoming spring break travel trends. According to data from AAA, roundtrip airfares to popular domestic cities are averaging 7% more than last year, while domestic hotel prices have surged by 8%. Megan highlights, “If you are going away on spring break this year, you should pad your budget” (04:03).

Top 10 Spring Break Destinations Sara and Megan enumerate the top spring break destinations, with Florida cities like Orlando, Fort Lauderdale, Miami, Anaheim, and Tampa dominating the list, alongside other hotspots like Atlanta, New York, Honolulu, Chicago, and Charlotte (04:16). This emphasizes Florida's strong presence in popular travel spots.

Rising Popularity of Cruises AAA's cruise forecast projects a record-breaking 19 million Americans embarking on ocean cruises this year, marking the third consecutive year of increasing cruise passenger volumes. Megan shares her excitement about exploring new cruise ships from MSC and Norwegian Cruise Line (04:49).

New Airport Lounges The hosts review the newly opened Capital One Lounge at Las Vegas Airport, praising its amenities such as unlimited access for Capital One Venture X cardholders and their guests, a variety of tapas-style food, and convenient grab-and-go options (05:12). They also mention the new Chase Sapphire Lounge in Philadelphia, highlighting its unique features like free facials and a beer garden (07:12).

Uber's Currency Display Changes Abroad A noteworthy update is Uber's change to display prices in users' home currencies by default when traveling internationally, effective February 27. This shift could lead to higher costs due to currency conversion fees unless users disable the preferred currency setting (07:41). The hosts advise using credit cards that charge no foreign transaction fees to mitigate these additional costs.

2. Main Discussion: Budgeting for Trips

Establishing a Dedicated Travel Fund Sara and Megan emphasize the importance of creating a separate travel fund to streamline budgeting. Sara likens it to an adult piggy bank, suggesting that listeners set aside a portion of their regular savings or income specifically for travel (11:04). Megan shares her childhood saving habits, “When I was a kid, my piggy bank actually was not a literal pig. Instead, it was this little island figurine where you put the coins inside the sand” (11:13).

Planning and Estimating Travel Costs The hosts discuss effective methods for estimating travel expenses. Sara recommends using tools like Google Flights to monitor airfare trends and setting price alerts to stay informed about fluctuations in flight prices (15:22). Megan introduces the concept of the “Goldilocks booking zone,” advising listeners to book domestic flights 1-3 months in advance and international flights 2-8 months ahead to secure the best rates (15:49).

Optimizing Credit Card Rewards A significant portion of the discussion focuses on leveraging credit card rewards to fund travel. Sara explains how she uses income from her side hustle, including podcasting, to build her travel fund in a high-yield savings account (16:16). Megan highlights the benefits of travel credit cards, such as signup bonuses and transferable points, which can be strategically used to cover flight and hotel costs. She shares her personal experience with the Hilton Honors American Express Aspire card, which offers a free night reward annually, allowing her to maximize the value of her credit card perks (25:41).

Strategies for Maximizing Points and Miles The hosts advocate for earning and using transferable points to gain flexibility in booking travel. Megan advises against hoarding points without a specific redemption plan, pointing out the risk of points devaluation. Sara echoes this sentiment, suggesting that having a clear travel goal can help in effectively utilizing accumulated points (20:50). They also discuss the importance of monitoring credit card signup bonuses and aligning them with upcoming travel plans to optimize rewards (24:42).

Automating Savings and Payments To maintain financial discipline, Sara recommends automating transfers to the travel fund, ensuring consistent savings without manual intervention (17:32). Megan adds that setting up autopay for credit cards directly from the travel account can simplify budgeting and prevent overspending (17:57).

3. Hot Takeoff: The Middle Seat Debate

In a playful segment titled "Hot Takeoff," Megan surprises listeners by expressing her appreciation for the middle seat on airplanes. She argues that, contrary to popular dislike, the middle seat offers practical advantages such as additional under-seat storage space for carry-ons. Megan humorously admits, “I actually don't hate the middle seat” (28:22), though Sara remains unconvinced, humorously confessing her preference for the aisle seat.

4. Key Takeaways and Conclusion

The episode concludes with a succinct summary of the main points discussed:

• Use Tools Like Google Flights: To get accurate estimates of travel costs and identify the best booking times.

• Create a Separate Travel Fund: Whether through a dedicated bank account or automated transfers, setting aside money specifically for travel helps in maintaining budget discipline.

• Leverage Credit Card Benefits: Optimize the use of travel credit cards for rewards, signup bonuses, and perks that can significantly reduce travel expenses.

• Plan for Flexibility: Always leave a buffer in your budget for unexpected expenses, ensuring that unforeseen costs do not derail your travel plans.

Sara and Megan encourage listeners to engage with them by sending questions or feedback and to follow the podcast on various platforms for more insightful episodes.

Notable Quotes:

• Megan Coyle on budgeting: “If you are going away on spring break this year, you should pad your budget.” (04:03)

• Sara French on travel priority: “I really prioritize travel in my life. So for me, it's non-negotiable.” (11:46)

• Megan Coyle on credit card perks: “If the credit card benefit is covering it, then I'm not going to complain.” (26:39)

• Megan Coyle on the middle seat: “I actually don't hate the middle seat.” (28:22)

For more detailed insights and resources mentioned in this episode, listeners can visit NerdWallet’s website and explore related articles in the show notes.