Budget Travel Strategy: Smart Travel Uses For Your Tax Refund

tax refundIf a tax refund is headed your way, common recommendations include paying off debt; making a major purchase and paying cash, rather than putting it on a credit card and other assorted common sense moves. Travelers can benefit too by using some of the same thinking about what we spend on airline tickets, cruise fare, gear and more.

“Set aside some money for vacation rather than using your credit card and paying interest long after you have returned,” financial experts suggest at Kiplinger in “Ten Smart Uses for Your Tax Refund.”

Looking beyond financial guru tips that can include beginning or adding to a retirement fund, throwing much of that refund into the never ending bog of student loans, maybe some immediate feel good uses would be appropriate also.

Load up travel cards and accounts
Going to be traveling sometime this year? Load up pre-paid travel cards, perhaps a gift card received as a gift that has a few dollars left but was handy to use at the time. Starbucks cards, gas cards or hotel cards some to mind.

MasterCard’s Travel Money Cards are handy. While you have the cash, avoid worrying about it down the road, in several ways with the MasterCard version or one of a number of other cards.

Registering your pre-paid card protects travel funds in case the card is lost or stolen, with no liability, just like a credit card. Starting with a nice chunk of cash from your tax refund, then add to it between now and travel is a good way to save too.

I do this with a dedicated card that is just for my travel fund and believe me, adding to and carrying my “travel card” is a whole lot more fun than a savings account up front. On the backside, eliminate post-travel blues of a new payment to make on a credit card too.

Known Expense Buys
Thinking ahead here is the key.

If, on your last trek through the mountains, one of the last thoughts was “I’m going to need to replace this old backpack before I go again,” but travel is not happening until the fall, get ahead of the game. Buy it now and buy it wisely. Shop and compare various sources with plenty of time, looking for a sale price on the perfect gear.

That works for just about anything and even small items like socks, shoes or more of the pre-paid cards noted above are fair game also. On cruise vacations some travelers choose to pre-pay shore exploration packages, gratuities or beverage packages that can add up quickly on a cruise ship.

Looking ahead to more efficient travel and making the buy you have been putting off is a good idea too. Time for a new digital camera? Buying before the peak travel months this summer can often find lower prices on models those going on vacation are apt to buy.

Buy Now, Travel Later
Cruise lines – between wave season (the busiest booking time of the year) and summer buying season (when many travelers finally get around to booking) – have some of the best deals around right now.

  • Carnival Cruise Lines Friends And Family event, just extended through the end of the month, offer the best rates we have seen so far this year with maximum upgrades and lower fares. Often, it’s one or the other.
  • Celebrity Cruises 123 Go offer new bookers a choice of a free beverage package, free prepaid gratuities or free onboard credit if booked before April 15.
  • Princess Cruises Spring Into Savings Sale has big savings on Europe cruises and Alaska cruises and up to $100 onboard spending money and up to $500 air savings per person. Seven-day Caribbean sailings and seven-day Alaska Inside Passage sailings are also on sale.

Not just the exclusive domain of cruise vacations, other travel options like hotel packages, resort stays and prepaid expenses at destinations around the world are possible too. In Rome, for example, a taxi ride from the air or cruise port can be arranged and paid for in advance. So can tour packages separate from cruise line offerings or hotel-suggested tours, both of which have some of the cost going right back to the source that suggested it.

Beware Of Bargains
Knowing that a great many Americans get a tax refund in the second quarter of the year, sellers of travel and travel-related services feature package deals with refund-laden travelers in mind.

Many are a great value, bundling airfare with car rental and hotel, cruise or resort packages. Some are scams that lie in wait for us to receive that chunk of cash, so check with your trusted travel source or Better Business Bureau before buying.

Bonus Tip: there really is no “Royal Cruise Line.” That’s an old scam by online thieves to get “just $99″ to pay the tax on your otherwise-free ride.

Some taxpayers even make spending their refund on travel an annual event. This video shows a bunch of travelers on their third annual tax refund trip.




[Photo credit – Flickr user robotson]