Finish Rich
March 31, 2004 Transcript

CNN American Morning

Want to get away for a nice spring/summer vacation? Then make sure to watch American Morning for David's advice on the best ways you can save for your very own getaway, plus tips on how to get the most out of your vacation dollars once you are at your destination!

Soledad: Well, spring has sprung so the time is right to plan and save for that summer vacation, in this week's edition of "90 second tips" how the early bird gets the deals. How much lead time do you realistically need to start saving for your summer vacation?

David: It depends how much you are going to spend, our friends in Europe go on vacation up to two months a year, here in the states they go for a week and a half, but that can cost up to $2,000 or $3,000. Really the thing to do is plan your vacation budget six months out. Create a vacation fund. That's what I teach in my books and seminars.

Soledad: Next piece of advice, use credit cards to acquire and cash in on mileage points. I know sometimes you are not a big fan of using credit cards.

David: I am not. But if you are responsible, and you have a rebate card, over the year you can get enough frequent flier points to pay for the vacation, or you might get a couple thousand dollars in cash back, so the key is make sure you are paying off those cards each month.

Soledad: What's the best way to plan for your vacation so there are no surprises, so you have stashed away the money and put that $5,000 away, and actually your vacation cost $6,500.

David: Read the fine print on your actual travel tickets, if someone tells you this vacation is going to cost $2,000, does that include tax or local fees? By the time you get your meal, there's an extra 50 bucks in miscellaneous taxes. Same thing with rental cars, so get all the fees up front so you know what you are paying for.

Soledad: Consider preplanned vacation packages, because they spell it out.

David: They do. And in a vacation package, you have everything included, the food, the hotel, the airline, the car, all in one package deal.

Soledad: If you are flexible you can save a lot of money.

David: Right now if you wanted to go skiing, there is a lot of snow, but nobody is skiing at the end of March, beginning of April. So if you travel two weeks away from the major time, you can get as much as 50% off.

Soledad: Can you really bargain with people? Can you go to the Ritz Carlton and say I am not go to paying $300.

David: Yes. I will give you my Ritz Carlton story. I went on-line to the Ritz Carlton. They didn't have special deals for skiing - so I called, and said are you having a ski package? It turns out they were. I got a package rate that included my lift tickets that was half the price of the typical rack rate but I got no skies and no room for less. Then in the hotel they had another special coupon, inside one of the magazines, and I went down to the magazine and said can I have this same price.

Soledad: That's not because you are Mr. Bach?

David: No. Anyone can. You can shop around.

Soledad: You also say stick to an itinerary.

David: In other words, when you go on a vacation, a lot of times, people make a change, they decide they are going to come back a day late or a day early. That's how you get nailed - those extra fees can add hundreds and increase your costs.

Soledad: Next piece of advice, bring don't buy. I travel somewhere and I have to buy everything, I have forgotten my shampoo, everything.

David: In Wal-Mart the suntan lotion is 2 bucks, but by the pool it's $19.95, it's the exact same. So suntan lotion, shaving cream, razor blades, film. All the obvious things, stock up. Take that with you, you could save $100 on your vacation.

Soledad: And finally, no place like home, are you encouraging people to stay home?

David: It can be fun - last week we were supposed to go to Vermont, we stayed in NYC. We did the things that people come who come to New York do. We went to the museums, visit some of the local areas, had a great time. People live in a lot of cities like New York where there's a lot to do. When people come into the town, they bring people to those locations, but they don't visit them.

Soledad: I went to the empire state building I am a New Yorker, but it was two years ago.

David: And guess what, that's free.

Soledad: David Bach, thank you. He's America On-line's money coach. David is here every Wednesday with tips how you can improve your financial life.