A Royal OE

By all accounts, our Royal guests – the Duke and Duchess of Cambridge, with tiny Prince George in tow – have a full itinerary that’s planned in minute detail. It looks to be a well-executed balance of duty and fun. (The weather’s been less than cooperative, but they probably planned for that, too.)

Now I can only guess the amount of work that has gone into preparing the way for each stop along Kate and William’s route: from racing each other on America’s Cup yachts in Auckland to jetting the Shotover rapids in Queenstown. All the details that need to be worked out for each event, the protocols, the security, the costs – it’s a triumph of logistics and planning.

If there’s anything that can drive up costs unexpectedly and see them spiral out of control, its overseas travel. Just think of your own journeys abroad. We all could use a royal planning team for those big trips, with so many variables at play.

Of course, travelling with kids, which the Cambridges are handling for the first time, brings its own set of challenges.

Out comes the card

For our own travels, without having a team of planners at our beck and call, there is that all-too-easy alternative to planning ahead: simply whack it on the credit card and deal with it when we get back. That’s what they’re made for right? Play now, pay later.

And pay we do – in interest. Which, if we don’t pay off our balance right away, can stretch out the time and cost of the trip for years. Check out our debt calculator to figure out the true cost of putting that trip on credit and how long it will take to pay it back.

Travelling overseas on plastic means you are borrowing money for something that – other than the invaluable experiences that come with seeing the world – will have no monetary value afterwards. Put another way: after the trip, there’s not much to show for it.

We spend much more … for much longer

Credit cards make it easy for us to spend much more. One factor is the way that many individual purchases are bound together into a single balance at the end of the month – making it more difficult to keep track of your decisions as you go.

If you were paying with cash, your mind would immediately weigh up whether the pain of parting with your money is worth the pleasure of whatever you’re buying. Paying with a credit card, that pain vs pleasure trade-off doesn’t happen – they’re separated in time by a month.

Pleasure now, pain when the bill comes in. Separate those two, and you only feel pleasure as you’re spending overseas – leaving the harsh reality to hit when you return home.

Save ahead, try debit

The alternative to relying on credit, of course, is to save ahead. One way of using Sorted’s Saving Calculator is to plan holidays – it lets you make a list of costs (airfares, accommodation, food, etc) and then tracks your savings so you can make sure you’re putting enough aside before you go.

You may not have a financial forecasting team or staff like the Royals do, but you do have the team and technology here at Sorted.

I’m a big fan of using debit cards for trips, as they are linked directly to bank accounts. That way I’m using my own money as I go, with no debt or interest to pay when I’m back home. There are other options that use ‘real’ money too, such as prepaid travel cards.

Staying at a hotel last year, however, I discovered one drawback to debit cards. Instead of simply handing over a credit card when I checked in at the desk as security in case I damaged anything, with a debit card, they needed to take out $300 from my account and replace it when I checked out – which was somewhat disconcerting at first. Luckily, I had funds on hand for these sorts of things – which is what often happens with travelling, doesn’t it? In the end it worked out just fine.

A royal discount

One of the things that has been reported about the Royal tour is that the Duke and Duchess will be staying at a Queenstown lodge that normally would cost $12,000 a night. Nothing strange in that, for such celebrities as they are.

But here’s the thing: apparently they will be staying there at a discounted rate more like the cost of a local hotel – hundreds of dollars instead of thousands.

Like all that savvy travel planning, that’s a discount worth aspiring to.