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Figuring out how to split travel expenses when going on vacation with friends or family can be a difficult exercise. Case in point: I just got back from my girlfriends getaway and quickly realized that my friends had more money to spend on restaurants and rideshare than I did. I didn’t want to be the killer who insisted on skipping French cuisine to cook pasta in an Airbnb, but I was definitely worried about what my final travel bill would look like.
There can be many questions about not only how much group trips cost per weekend or week, but also who pays for each meal, ride or accommodation, and how others pay for them. No one wants to overpay – even if you’re earning rewards points on the purchase.
Your desire to see family and friends, especially after lockdowns during the coronavirus pandemic, may conflict with food and travel expenses that add up to more than your annual salary increase.
How do you agree and split travel expenses with family and friends so that everyone can get away and still come home talking? Here are seven tips for managing finances on a group trip.
Discuss the total travel costs before booking
Is this a $500 per person trip or a $5,000 couple trip? To set yourself up for success, take the team’s pulse to find out how much money you can afford to spend on this adventure.
Asking is not easy. “We know that topics about money are generally taboo,” says Sarah Foster, analyst and economics reporter at Bankrate (TPG’s sister site). “Many of the challenges people face when deciding to travel or go places with friends can be overcome by the general idea that it’s comfortable to talk about money.”
This is especially important if you are planning a trip and are inviting others (such as a bachelor or bachelorette party). Your friends may come from very different financial backgrounds. Give the group an estimate of what flights, accommodations, transportation, meals, and activities will cost, and give invited participants the option to turn back or return.
And please don’t shame anyone for choosing not to go into debt for an unaffordable vacation. If you choose to stay at home, the fear of missing out is painful enough; You don’t want your friends to feel like they have to choose between financial security and a relationship with you.
When booking accommodation, consider the difference in room and price
Unless you’re booking the same hotel rooms where everyone gets their own bed (or shares one), agree with your group on a fair way to allocate and pay for accommodation.
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“If you’re single, I hate it when anyone who rents an apartment on the assumption that you don’t need your own space or your own bed gets a small space. If everyone is paying equally, everyone should have equal access to sleeping space,” says Madison Blancaflo, senior editor at TPG. She advises that the cost of a night’s accommodation be divided unequally.
Still, you shouldn’t assume it’s okay for anyone to sleep on a pull-out couch or share a bed with an unmarried person without asking first. Even if they agree, don’t charge them the same amount as the couple in the master bedroom…unless everyone says they’re okay with the arrangement.
Alternatively, look for vacation destinations that offer a variety of accommodation styles and prices for the group, keeping everyone close together. For example, on a cruise or resort, the matriarch or patriarch of the family might book a larger suite, perhaps with more space for gatherings, while the grandchildren might have an interior room or smaller hotel room that overlooks the garden rather than the ocean.
Don’t assume that everyone wants to budget their vacation the same way
Some people travel to try the best restaurants in a destination, no matter the cost. Others prefer to eat on the cheap and spend their money on experiences like tours or entrance fees. Whether you prefer to attend a concert or a theater show, your friends may want to spend the night ordering craft cocktails. Or, your parents may want to book every tour and get into every museum, but your budget calls for free or low-cost entertainment.
Differences in the value of these vacation activities to you and your travel companions can lead to misunderstandings and hurt feelings when planning the day’s activities. It can also make some travel partners feel uncomfortable spending more on activities than planned.
To avoid any awkward situations that may arise, have the necessary discussions before the trip about how you will spend your money on vacation so that you can figure out a compromise. Maybe team members take turns choosing day or night activities, or you agree to split up sometimes depending on needs and budget. Sometimes affluent grandparents or spouses are willing to subsidize the group’s most expensive meal or activity, so budget-conscious travelers don’t have to worry about the cost. You never know until you talk about it.
Remember good financial details
Your team may agree to split the restaurant bill, but that doesn’t mean you’ve checked all the important details. Do you leave a 15% or 25% tip? And how do you account for bad exchange rates when spending cash or credit card payments on foreign purchases? No one wants to nitpick, but it can be important to ease the worries of travelers on a budget.
Check with your travel buddies to find out how much they’re worth before you agree to split the costs. Is $5 more here or there a deal breaker, or are they occasionally a bit over budget? Make it clear which expenses will be shared and which the individual will have to take on themselves. The correct answer is the one you all agree on.
Use technology to make splitting costs easier
“Anyone with a travel rewards credit card or accumulated rewards points knows how important it is to be the first to swipe your credit card on the bill and pay for the group. But what is often overlooked is the checkout process,” says Foster.
Splitting costs can be a nightmare when it comes to settlement. Your sister has lost her receipts, your boyfriend’s best friend wants you to cover his excessive beer purchases, and there’s always someone you’ve been chasing for months to get you back.
Besides, who owes it anyway? If people’s meals cost wildly different amounts, you don’t want to split the bill evenly.
“It’s important to be careful about how you split bills when traveling and that no one overpays,” says Foster. If one person gets two drinks at dinner, but someone else doesn’t drink at all, it’s not fair to subsidize her friend’s cocktail. “There’s nothing that makes supposedly fun trips worse than being afraid that someone at a table has technically paid more than they spent and is afraid to take it off.”
This is a problem, but technology can solve it. Choose from several expense-split apps or calculators like Splitwise to keep track of expenses and figure out who owes what. At this point, you can enter expenses – some even let you enter receipts yourself – and even decide who is responsible for splitting each payment, if not the entire team each time. The app does the math and streamlines payments so you’re not all throwing money at each other at once.
Take turns paying for group expenses.
Low-tech solutions for splitting travel costs also work. Maybe one person pays for everyone’s dinner and another pays for everyone’s transportation via a ride-hailing service so it’s clear who needs to be paid and less likely to lose receipts. If one traveler wants to take advantage of all those credit card rewards and doesn’t want to pay more, assign that person to pay for all group travel expenses. In this way, the balance has to be paid to only one person at the end of the trip.
Alternatively, you can pay for things in turn, assuming everyone spends the same amount. Even if it’s not accurate, you won’t have such a large or complicated payment at the end of the trip. And everyone gets a chance to earn points or miles with their credit card.
When all else fails, ask for separate checks
It’s easy to have one person pay the entire restaurant bill or train fare, but if you’re concerned about dividing travel costs fairly, sometimes it’s better to have everyone pay for themselves. Ask for different checks at restaurants and let each traveler purchase their own tour tickets with cash or credit, as desired.
Look for apps and travel providers that have the option to allow multiple people to pay from the start. Uber and Airbnb both allow costs to be split from the get-go, so everyone pays as they go instead of settling at the end.
at last
Splitting up vacation time can be a stressful part of your trip if you don’t plan ahead. When more people are involved, you’ll get more opinions on what the budget should be, what you should be flexible about, and how you should pay for each expense. The most important thing you can do to prevent arguments or financial stress is to open the lines of communication and talk about all the money matters during the planning stage and during the trip.
Raising finances can feel daunting, but remember who you’re talking to. “Your family, your friends, they all care about you, and they don’t want you to get yourself into credit card debt,” Foster said. “Everyone on the team wants the best for you. It’s just a matter of building up the courage to approach the conversation.
Once you’ve agreed on how to split vacation costs, you can get on with what’s most important – enjoying the trip and spending time together as a team.
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