July.28.16Holiday Finance
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Money Matters with Nimi
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The holidays are almost here. Are you one of those fortunate enough to be able to get away from the stresses and strains of work and routine home life? Many people will be heading home to Nigeria to spend time with friends and family whilst others will be heading for other destinations. With all the excitement and anticipation it is so easy to overspend. Here are a few tips to manage your holiday finances and still have lots of fun.

Plan Ahead

Ideally your plans are already in place for your vacation, otherwise you will have little flexibility and will have to accept whatever is available. Last minute bookings can cost you twice as much as if you had booked weeks, if not months in advance. This can get really expensive when you are making a booking for a large party. When you book early, there is time to shop around for the best deals on fares, accommodation and tour packages.

Air miles are useful in offsetting some of your ticket or accommodation costs, if you book well in advance of your trip. However, the best value from your air miles is usually during off-peak seasons when demand is low. It will be a challenge to find air mile tickets for travel now.

Draw up a holiday budget, and stick to it

You do not have to travel to an expensive and exotic location just because “everyone else” is doing so. Look critically at your finances. Set an overall spending limit involving your family and try to stick to this. You will need to budget for the various aspects of holiday spending including accommodation, transport fares, food, shopping, entertainment, gifts, tours and so on. Avoid borrowing to finance your holiday unless there is some certainty of an impending inflow of funds or other compelling reason to do so.

Credit cards, debit cards or cash?

Remember to purchase your Personal Travel Allowance (PTA), or Business Travel Allowence (BTA); they entitle you to a certain amount per quarter for personal or business travel; this will usually be paid in cash. You will need your international passport with a valid visa for the country you are visiting, and a return air ticket to support your applications.

Using your bankcards along with some cash gives you the flexibility you will need whilst you are away on holiday. Cash withdrawals can be made using your Naira Visa or Naira Mastercard, which are accepted at over a million Automated Teller Machines (ATMs) globally where the sign is displayed to either pay for goods and services or access cash. Linked to your local current account, all transactions reflect instantly.

If you plan to use your cards whilst you are away, remember to notify your bank or card company; as an added security precaution, many card providers look out for “suspicious” activity. If they see your card being heavily used particularly in what is an unusual environment for you, your account may be suspended until they have heard from you to confirm that it is indeed you using the card; this could cause you significant inconvenience.

As far as possible use your debit card for withdrawals at ATMs during bank opening hours. Hold some cash just in case your card is lost, stolen or fails to work. You can also make payments and transfers out of your account from online banking solutions if you have this in place.

Licensed Bureau de Changes are usually available at airports; this is very convenient particularly when you arrive, but they tend not to be as competitive as those in town. Look out for the commission charge and the exchange rate offered. Work out exactly how much you will get in exchange for your currency, to make sure it meets your expectations. Be cautious when you patronize moneychangers, as there is the very real risk of being shortchanged or sold counterfeit money.

Book your car hire before you go

As far as possible book your car ahead of your departure as picking one up on arrival is usually more expensive. Read through the terms and conditions fully understanding the insurance terms, particularly where you require a self-drive car rental for a period. Car hire services are readily available but it is safer to patronize a reputable licensed agency.

Be particularly cautious of opportunistic “taxi drivers” who beckon as you step out of the arrivals hall in airports all over the world; they are looking to make money from unsuspecting tourists and visitors and often charge exorbitant rates. Go to an official taxi rank if you haven’t booked a car in advance, and always ensure that you are getting into a licensed taxi. There are some dangerous criminals lurking at airports and stations; unsuspecting tourists are their target market.

Beware of roaming charges!

To use your phone abroad you often have to pay to both make and receive calls. If you are not careful, roaming charges can result in a shocking telephone bill when you return home. Outside the European Union, service providers are free to charge what they like. Contact your service provider and be sure of the implications and costs. Pay your bills in advance so that you don’t get cut off whilst you are away.

The new-generation smart phones such as the I-phone, Samsung and BlackBerry have become hugely popular devices providing access to your emails and the internet, a world of shopping, and social networking applications just a touch away. We thus unwittingly leave ourselves open to international roaming charges on our smart phones as soon as we switch them on. The continuous activity utilizes data bandwidth and this leads to constant charging and huge bills in accidental roaming fees. If you do not need data services on your trip and can resist the temptation to sneak a quick e-mail check on your smart phone, then turn off the data service when you are roaming.

The good thing about smart phones is there are options and you can choose which services to cut off. After disabling data services, you will still be able to make and receive calls and send and receive text messages. In addition, you can turn this feature on and off at-will so you can still check your emails periodically.

Use wi-fi

You will have access to wi-fi hotspots, business centers or internet cafes at your destination. However, be cautious and only connect to wi-fi hotspots that are secure. Use ‘free’ hotspots with extreme caution; they may be convenient but are not always safe as there is always a danger of hacking or compromising your banking information. To at least reduce your vulnerability, use strong passwords and install some security software. wi-fi access, whilst it may not be free it is usually much cheaper than paying data roaming costs.

It makes sense to buy a local SIM card when you arrive at your destination particularly if you are spending a length of time away; make sure that your friends, family, colleagues and important contacts have the number so that you don’t miss out on important calls. Most SIM cards do not charge to receive calls and making calls will be much cheaper than using your usual number.

Are you insured?

While vacations usually go without incident, you don’t want to be caught unawares. What if someone in your family suddenly becomes ill? What if your luggage gets lost or you have to cancel your trip? Travel insurance usually includes coverage for medical bills, lost baggage and cancellations. Read the fine print to ensure that you have the best coverage at affordable rates and make sure your medical insurance card is on you.

Above all, remember that a vacation is really about spending quality time with loved ones, having time for yourself and to just rest. It need not be that expensive; you can rediscover your own environment by visiting places close to home, revisit your hobbies, pastimes, and sports. With a little careful planning, you can find a balance between having an enjoyable vacation and still keeping your finances in check.

Happy holidays!

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