11 Ways to Recession-Proof Your Vacation, According to Experts

Going on vacation may be more manageable if you set aside funds for travel out of every paycheck. Telibasa recommends establishing a travel budget for the year. Once you have your budget, take some money out of each paycheck and deposit it into a dedicated savings account. For example, if your travel budget for the year is $10,000 and you get paid every two weeks, you could deposit $385 into your travel account every payday.

“This approach makes it much easier to pay for the vacation as the savings are out of sight, out of mind, and broken down into bite-sized pieces. Additionally, if we spread out the savings over a whole year, poor economic activity at one specific point will be less likely to impact us,” he explains.

If you are already behind for the year, use savings to catch up or deposit a little more out of each paycheck until you are on track to meet your goal for the year. If you think a layoff is looming and you don’t want to give up your annual trip, consider adding a little more each month if you are able.

Most financial experts don’t recommend going into debt to pay for a trip, especially with an uncertain economic forecast. However, “logistically, it still makes sense to pay for a trip with a credit card for rewards and travel protection,” Telibasa says.

If you take this approach, it’s important to pay your balance off each month to avoid hefty interest charges.

It’s easy to default to booking hotels and plane tickets through your credit card’s travel portal. However, most of the time, your points and miles will go farther if you transfer them to a hotel chain or airline and book directly. Nevertheless, there are exceptions to this rule, so it’s worth comparing prices before booking.

Additionally, travel portals can also be useful for booking experiences beyond flights and hotels. For example, Chase credit card holders can use their points to book tours, cruises, and other experiences through the Chase Travel portal.

Additionally, be sure to sign up for hotel and airline loyalty programs. You may be able to earn perks like free breakfast, complimentary high-speed WiFi, upgrades, and free nights.

Using credit cards strategically can help recession-proof your vacation. Spend time learning “all the discounts, credits, and perks of that card and make sure you are using them,” suggests Bobbi Rebell, a certified financial planner and personal finance expert at CardRates.com.

Rebell also recommends, “being strategic when you make your purchases and use credit cards that have features like trip cancellation insurance and rental car insurance.”

This can help you save money so you don’t pay more for a benefit you are already getting through a credit card. Rebell explains that using the right credit card for international travel helps you avoid foreign transaction fees.

With a recession looming, it may be a good idea to reconsider plans to travel to a high-cost area. For international trips, research places where the dollar is strong.

“It will make your time on the ground much more affordable and help your money last longer,” Rebell says.

If you are traveling domestically, visiting places in lower-cost-of-living areas, especially if you can drive there, might be more affordable. Or consider a destination with free activities, such as hiking trails or museums that don’t charge entrance fees.

Another approach is to narrow your vacation options to three or four. Continue monitoring airfare and hotel prices until you find something that meets your budget. Once you find something that works, be ready to book quickly.

Additionally, if you are flexible about when you travel, consider traveling during the off-season. This can help save a bundle since demand for flights, hotels, and tours isn’t as high once the crowds go home.

Because prices can be volatile, Telibasa says it usually makes sense to book your trip well in advance and commit as soon as you see something in your budget. With a recession looming, Bergmark warns that this traditional advice may not be the best approach.

If there is reduced demand, prices may drop closer to your travel date. This is especially true when it comes to off-season trips such as the Caribbean during late spring, or European capitals during the early fall, he says.

However, this is a risky approach. While you may find a great deal, if you wait too long, you may find that prices have increased, and going on vacation is no longer in your budget. Using an app that monitors prices, such as Google Flights or Skyscanner, can help pinpoint the best time to book.

Most tourists only care about exchange rates while they are traveling, Bergmark says. However, “The most important thing is to monitor trends over time and strategically use currency conversion tools” by setting up notifications for when a currency falls to a favorable rate, he explains. Bergmark also suggests looking for seasonal patterns. “Find out if the currency of your destination tends to be weaker in certain months and plan your booking around that,” he suggests. For example, “the euro tends to weaken late in the summer because of European tourism slowdowns,” which impacts the economy, he explains.

Even if you can’t travel when a certain currency tends to be weaker, you can still convert currency at the most advantageous time at your bank. Wise and Xe have tools that will alert you to changes in exchange rates and help track currency fluctuations over time.

Once you are at your destination, be smart about where you exchange your cash. Kiosks at airports and other attractions popular with tourists tend to have poor exchange rates or charge high fees, Bergmark says. Stretch your dollars further by only exchanging cash at banks or ATMs run by banks, which tend to give the best exchange rate available.

Many people find out the hard way that their insurance isn’t as comprehensive as they would like. If you are worried about losing your job, be sure to get insurance that covers cancellations related to job loss, Bergmark says. “Cancel for Any Reason” insurance makes sense for some people, he says.

This type of insurance can add about 6-7% to the overall cost of a trip, says Adam Koprucki, the founder of RealWorldInvestor.com. Some insurance plans don’t cover cancellation for any reason but specifically cover cancellations due to job loss or unexpected work obligations.

Combined with insurance for trip interruption or medical costs provided by some credit cards, “travelers can build a strong financial safeguard,” he says. Rates for travel insurance can vary widely, even for similar coverage, so be sure to get at least three quotes. If you have several trips planned in a year, an annual plan might make sense.

Airline tickets and hotel rates change with demand. If demand goes down due to a recession, travelers may be able to get a good deal on their existing reservations. However, this works best if you book flights and hotels that have flexible booking rules, Bergmark says. Read the fine print to see if your airline ticket or hotel allows you to cancel and rebook or receive a refund for the price difference if prices go down, he suggests.

However, this isn’t as easy as it sounds. Price adjustments don’t happen automatically. With these types of flexible bookings, the customer is responsible for monitoring price changes and asking for a refund.

If you find a great deal but can’t fully commit, consider booking fully refundable airline tickets and hotels. These bookings typically cost a little more, but they can save you a lot of money and heartache if you can’t take your trip for any reason.

Many leave their homes empty when they leave for vacation. To help recession-proof your vacation, consider how your empty house can offset your vacation costs.

“While you’re away, you can turn your backyard into a private dog park locals can rent by the hour on Sniffspot. Own a pool? List it on Swimply and let your community rent it by the hour. Have land? Use Hipcamp to let others camp. If you own an RV, rent it out by the day via Outdoorsy,” says financial planner Patrick McAndrew.

Or consider enrolling in HomeExchange for an annual fee of $220 and swapping homes with another member. “

A little creativity and sweat equity can help you turn your unused assets into meaningful income that will help you break even on your next getaway or even turn a profit,” McAndrew says.

Staying in one place for an extended period can help save on transportation costs. Plus, many hotels and rental properties offer discounts for extended stays. Travelers used to visiting multiple spots during a trip may find that they prefer getting to know a single destination well if they give it a chance.