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Citi's Summer Tips

Some 230 million Americans are expected to take vacations between June and August this year, and it’s estimated that an average family of four, on a two-week vacation within the U.S. will spend $3,000 on food and lodging alone. Add in the cost of transportation — as well as a variety of other travel related expenses — and total vacation spending can be substantial.

Unfortunately, many vacationers won’t realize just how substantial their spending may have been until after their vacation is over. Most likely, they won’t start out with a budget, or if they do, they won’t track spending to make sure they stay within their budget. For these people, summer fun can result in a bad case of the summertime blues once they return home to face vacation bills.

To help eliminate this problem, Citibank offers the following tips on managing spending during vacation time:

— Set a limit on what you want to spend. Make this decision before you decide on vacation plans. That way, you won’t be tempted to plan a vacation you really can’t afford. Questions to ask yourself include: “How will I pay for my vacation?” and “If I use credit, how long will it take to pay down the charges?” You don’t want to still be paying for a summer vacation by the time the year-end holiday season rolls around. Knowing how much money you can comfortably afford will help you focus on appropriate vacation options.

— Make a spending plan. Once you’ve decided on the kind of vacation you can afford, make a list of what you think your major expenses will be (like transportation, lodging, and food) and estimate their costs (don’t forget to look into discounts that might be available through early bookings). Deduct these amounts from your overall vacation budget to figure out how much you have left over to pay for day-to-day activities. Divide this remaining amount by the number of days in your vacation to get a daily spending allowance.

— Keep track of spending. Don’t run out of money before you run out of vacation! Write down every expenditure, and keep a daily tally, to ensure that you stay within your budget. Remember to account for incidentals (sodas, souvenirs, sightseeing) as well as major purchases. A soda every day for everyone in the family can really add up over a two-week period. Citibank recommends tracking credit card spending in particular, and offers a free Credit Minder to all consumers to help track purchases. It helps cardholders manage their spending within their credit limit, and also functions as a record of transactions that can be checked against those listed on the monthly billing statement.

— Choose your “way to pay” carefully. Cash, personal checks, travelers checks, credit cards and debit cards are among the payment options available for today’s vacationer. Make sure that you’re traveling with a payment method that offers some financial protection, is convenient, and is accepted at your destination. And before you leave, try to pay down existing credit card balances to ensure that you have the credit you need in the event of an emergency.

— Make vacation spending a family affair. Every family member should understand that there are spending guidelines in place while vacationing. Get the kids involved by giving them their own vacation allowance. Help them set up their own daily budget and stick to it. Also, avoid impulse purchases; what might seem like the buy of a lifetime while on vacation could turn into a financial folly once you bring it home.

— Save money by taking a vacation at home. You don’t have to spend a lot of money on an extravagant trip to have a nice vacation. Try keeping it simple. Entertain friends. Plan day trips to a park, beach, or amusement area. Attend local sporting events or go to the movies. Just enjoy your time away from the workplace.

— Save receipts and spending records. When the vacation is over, take a few minutes to review spending. Did you accurately estimate your expenditures? Did you stay within your budget? Keep records on this year’s vacation in a file that can be reviewed when planning for next year. This will give you a realistic starting point for establishing next year’s vacation spending limit.

“Being on vacation doesn’t mean taking a vacation from managing your money,” reminds Becky Cutler, spokesperson for Citibank’s credit management education program. “With a little planning and discipline, what you’ll remember from your vacation is the amount of fun you had, and not the amount of bills you had to pay afterward.”

Citibank offers its Credit Minder credit management tool free to all consumers. It’s essentially a handy, miniature checkbook-type register that lets you record every purchase you make with a credit card — as you make it, wherever you are. It also has a pocket that holds one card. Keep in mind that limiting the number of credit cards you carry with you will also help you limit your spending. To receive a free Credit Minder, call 1-800-669-2635.

Citibank is the largest issuer of MasterCard and Visa in the country, with over 37 million cards in circulation.

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