Residents in the UAE are travelling more and more. And they’re spending more money when they’re away too. Indeed, the World Travel & Tourism Council (WTTC) forecasts that outbound travel spending will continue to grow in the coming years, reaching Dh157 billion by 2025.
One of the reasons for the increase in travel by the citizens and residents is the growing number of destinations served by the UAE's airlines.
The top 10 outbound spending markets were the UK, the US, Ireland, France, India, Netherlands, Germany, Saudi Arabia, Cyprus and Italy, according to the latest UAE Travel Snapshot by Visa in April. UAE-based travelers spent Dh5.1 billion in the UK, Dh3.2 billion in the US, Dh1.1 billion in Ireland, Dh1 billion in France, and Dh771 million in India.
With the summer heat already kicked in, it's the perfect time to slip away to a destination with milder climates. Of course, travelling abroad always requires research and preparation than travelling close to home. You can't exactly pack a bag and hop on a plane. There are also financial issues to prepare for – some of which you should take care of before you depart. Here are 10 financial tips to ensure a smooth travel this year:
1. Budget is key
Vacations are not cheap, but they don’t have to cost so much if they are planned properly. By smart budgeting and simple travel hacks, your affordable vacation may be just around the corner. Factor in what you will spend on your accommodations, travel, meals and activities. "Create a travel budget for the duration of the trip and try to follow it," says Anindo Bhattacharya, Head of Personal Banking at Mashreq Bank. "One way to do this is to assign daily spend limits on your debit and credit cards to a required amount."
2. Maximise offers
A great travel hack is using your debit and credit cards to earn valuable miles and points for travel rewards. Also, banks sometimes run promotions and discounts. Mashreq has year-long travel offers on its cards such as discounts on flights and hotels, free travel insurance and lounge access.
3. Notify your bank
About a week before you leave, get in touch with your bank. Inform them that you plan to use your debit and credit cards overseas so the charges and withdrawals you make while you're out of town won't be flagged as suspicious. You should check your transactions frequently to scan for any unauthorised purchases. Alternatively, you can set up alerts to have a message sent to your phone or email every time your card is used.
4. Travel insurance
Travel insurance can save the day when it comes to vacation-specific expenses. Ensure you're insured – travel insurance can cover anything from missed departures, medical expenses, theft of belongings to cancelled trips and travel inconvenience. Consider what kind of coverage you might want or need and arrange it before you leave. Booking your travel through Mashreq debit and credit cards allows you to instantly download the travel insurance free of cost.
5. Get more out of your cards
Locking the exchange rate on your travel cards buffers you from currency fluctuations during your trip and also makes it easier to know exactly how much you have spent. And if you're planning ahead, you could also get a better exchange rate by tracking it for a few weeks and snapping up the card when it appears most favourable. Speak to your bank – it may offer preferential rates with no commission or fees for clients.
6. Converting cash
If you want to carry cash, shop around for the best rates – while a no-commission deal may look good, it often comes with a lower exchange rate, which means you'll lose out if you're converting larger sums. Some exchange houses also charge a flat administration fee, so be sure to ask upfront. Avoid leaving it to the last minute, as airports invariably offer a low exchange rate and high fees.
7. Go for a loan
If you’ve been dreaming of a vacation for a long time, don’t let the expenses hold you back. Instead, opt for a loan and make memories to last a lifetime. Some of the key reasons to opt for a Mashreq Slice loan are: Instant disbursal of funds, pocket-friendly EMIs, flexible tenures and hassle-free documentation.
Create a travel budget for the duration of the trip and try to follow it. One way to do this is to assign daily spend limits on your debit and credit cards to a required amount.
“In addition, you can further cut down your interest cost because the Mashreq Slice Loan disburses the loan amount in small tranches and you pay interest only on the disbursed amount,” says Bhattacharya. “Mashreq personal loans also come with reducing rates as low as 6.75 per cent a year, which means you can manage your cash flows and align them with travel sales seasons to get the best deals out of hotels, airlines and even time your currency conversion when the market favours you.”
8. Emergency reserves
For unplanned expenses and emergencies, keep a small amount of local currency in your pocket. Not every merchant, especially in remote locations, is wired up to accept a credit card. So, it’s best to have some cash on the side.
9. Automate bill payments
It is easy to forget about finances while on a trip. Prior to leaving, do a quick accounting of the deposits and automatic withdrawals that will occur while you are away to make sure that your account balance does not go negative. Automate bill payments for things like credit cards, utility bills and mobile phone bills. This way, you won’t incur late payment fees and have to deal with inconveniences arising out of cancellation of services.
10. Review your holiday expenditure
After returning from your vacation, look at those post-holiday bank statements, while also considering your usual monthly bills like rent and utility payments. You should make sure that you make at least the minimum payments on all your credit cards. Also, try to restrict frivolous post-holiday shopping to get your finances back on the right footing. With September often an expensive time for many UAE families due to the start of the school year, there has never been a better time to get smart about spending and saving.