Vacation Where and When Your Dollar Goes the Furthest

Posted by Phil Taylor on May 14, 2010 in Personal Finance

The following post is from our guest author, Phil Taylor from a blog we admire, PT Money. Be sure to check out PT’s other money tips for travelers.

I love to travel. I’ve had the luxury of traveling a lot in my work career. I really enjoyed getting to see the world on someone else’s dime. Now that I’ve changed career paths, I don’t get that benefit. When I take a trip, it pains me to know I’m paying for everything. So when I think about traveling overseas these days, my more practical side takes over and my thoughts quickly turn to places I know that my US dollar might go a bit further.

What Will a Dollar Get Me?

Traditional “more-bang-for-your-buck” spots for US tourists have been places like Thailand, Indonesia, Argentina, Mexico and other Central American spots, as well as Eastern European locales like Hungary and The Netherlands.

To get an exact calculation of how far your dollar would go, by country, you’d have to start factoring in historical foreign exchange rates, varying degrees on inflation, purchasing power parity theory, and a whole bunch of other statistics.

A more practical way might be to compare hotel ratings and prices. After all, the hotel room is likely going to be your biggest expense. Hotels.com has taken a lot of the guess work out of it for you by providing the Hotel Price Index. Some of the least expensive cities to book a hotel include: Mexico City, Prague, Bangkok, and Beijing.

Food is another big expense. Check out the Big Mac Index to see how food prices might vary from country to country.

While we’re on the subject of currency conversion, remember to exchange a bit of currency here in the States before you leave for your trip to make it more convenient when you land. However, do most of your converting on location as that’s where it will be the least expensive to convert.

Consider the Time of Year

Another thing to consider is the timing of your trip. Because of weather, traditional tourist seasons, and holidays, some places are going to be really expensive at certain times of the year. If you can avoid those peak times, or at least hit them on the very front or back-end, you’ll end up seeing some savings.

This cheapest time to visit list from About.com will give you some good ideas. For example, it’s apparently cheapest to visit Hawaii in May. Make sure you find out why it’s cheap to travel during that time though. You don’t want the thing keeping others away to be a deal breaker for you as well. A site like besttimetovisit.com will help you avoid visiting during a really bad time of the year.

Try Local When You’re There

One final consideration is to try and get away from the touristy, big resort areas when you’re there. Local spots are likely going to have more reasonable pricing and will give you a more authentic experience. Again though, use a bit of caution and check the State Department’s Travel site for information on any travel warnings.

Where do you travel to make your dollar go further?

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