Before we dig in, I want to ask you readers to come up with a guess cost before reading this post and sharing your initial guess in the comments below. A family of 4 spending 2 months in Portugal – How much would a non-FIRE-optimizer spend on travelling 2 months abroad?  And then, how much are we, ModernFImily, spending out of pocket?

Ok ready…. think about it….. write it down…. ok keep reading.

So we are in Portugal for exactly 2 months from the end of January to the end of March.  This is not their peak season so if you’re looking to go over the summer, expect to pay much more.

This is actually one of the nice perks to living in Canada.  I do love all seasons but I don’t need winter to be as long as it is.  So whenever we’re looking to travel, it’s always going to be over our winters.  And for most destinations, that means off/shoulder season.  Which means lower prices.   And fewer people.  Two major wins in our books. (Whereas in our former Florida lives, we’d be looking to travel over the crazy hot and humid summers aka peak season for most places.)

Flights

Typically, we would travel hack and pay for our flights with points and only pay the international taxes.  (The points and travel game is always changing but typically a flight from North America to Europe costs ~60,000 points + international taxes ~$200 for a round trip ticket.) However, when I saw a flight sale pop up for $575 round trip direct flights including taxes from Calgary to Amsterdam, I jumped on it (via emails I get from YYC Deals – they have other Canadian airports you can sign up for too).

Originally, we were not even planning to go to Europe but after seeing this we switched gears.  (At the time, we were trying to decide between Mexico and Colombia.)

We also were thinking we’d go early-February to early-April but the last flight option for this pricing was to return at the end of March so we shifted the dates around.

(Notice how *flexibility* is the key here – thanks FIRE!)

For any Canadian reading, getting to skip a layover at the Toronto airport bumps the flight up to next level status.  So getting to Europe without the hassle of a stop is amazing in itself.  And then, as flight prices only seem to be soaring, this pricing comes up??  It’s cheaper for us to fly to Amsterdam then to Denver, CO?! Yes please!

We did decide to pay upfront for seats together and for a checked bag each way (mostly as an insurance with the hopes that we could carry everything on but if not, pay a reduced fee now).

Then once we were in Europe we booked two intra-Europe flights. Although we do love Amsterdam, it’s cold there too and we were seeking something warm.  We were trying to decide between Turkey, the Balkans, and Portugal.  I *really* want to go the Balkans but we thought Portugal would be best with young kids. So we booked round trip flights from AMS-LIS (we’re staying in Amsterdam one night on either end).  And then we are heading over to Madeira Island so booked round trip flights LIS-FNC for that.

Note that Parker is under 2 so we only had to pay for 3 passengers for this trip.  However, in Europe there is a fee for an infant on lap (they seem to range between 15-25 Euros which is a bit wild as some adult flight tickets cost less than that!).

Flight Costs (for our family in CAD):

• YYC-LIS roundtrip: $1,988
• AMS-LIS roundtrip: $529
• LIS-FNC roundtrip: $245

Total Cost for Flights: $2,832

P.S. – Nic still thinks it’s ridiculous we paid for flights when we have over 2,000,000 airline points.

Accommodations

Originally, we were planning to stay a month in one Airbnb location (Setubal, just south of Lisbon) and then 2 weeks on either end in 2 other towns (somewhere down in the Algarve and Aviero in the north) and just use public transit / walk everywhere.  Our logic was that with Airbnb we should get a better rate when we stay somewhere for 28+ days.  While this is true, we realized we didn’t need that fancy of a place. For the same cost, we could be in 4 different locations – still in 2 bedroom places but just not as fru-fru as the month long stay. Everywhere that we booked, we ensured the reservations were 100% refundable up until a day before check-in in case we wanted to make any adjustments.

Nic was the mastermind behind finding all our Airbnb stays.  One of the tips is to look early.  And again, travel during the off-season.  Be flexible with your location and explore places outside large tourist destinations.  Nic also really understands the filters within the Airbnb platform which made narrowing down options quite easy.  READ THE REVIEWS!  Sometimes a new place will be at a lower-than-normal pricing to try to get people in.  For some people, they jump on this and it all works out great.  However, we avoided all of these as we highly respect reviews that prior guests leave.  You also can always message the host to see if they will offer a discount.  (We opted not to as we thought everything was already reasonably priced.)

In addition to the Airbnb’s, we decided to use some IHG hotel points for our stays in Lisbon.  IHG offers a 4th free night promo to certain credit card holders.  So we decided to split Lisbon up into three separate 4 night stays. Meaning we are staying in Lisbon for a total of 12 nights and paying in points for 9 of those nights and the other 3 are free.

For whatever reason, IHG’s system was not registering that we should receive the 4th night free. This ended up being much more of a pain than it should have.  I should have logged how many hours and phone calls I had to make to get this all sorted out.  Easily 20 hours.  Man oh man, IHG, get it together!

It felt like we were changing our itinerary daily for the first few weeks but we finally settled on the itinerary we shared in our last post.  Here’s the costs for our stays (in CAD):

• Madeira: $578 for 12 nights, $48/night
• Lagos: $947 for 14 nights, $68/night
• Peniche: $371/8 nights, $46/night
• Arcozelo: $786/10 nights, $77/night
• Average cost per night: $61 CAD/night (42 Euros/night)

Hotels:

• Amsterdam: $0, 24,500 points. We used free anniversary nights that we both get for our IHG cards for our two nights here.  We also splurged and reserved two hotel rooms each night here as the cost is low (12,000 and 12,500 points per night) and we want to try to get a good nights sleep on either end of a big flight.
• Lisbon: $70 (48€) + a total of 166,000 points for 12 nights (52,000, 60,000, and 54,000 points for each reservation).  Comes down to 13,833 IHG points/night. Lisbon tourist city tax of 2€/person/night.
• We *still* have close to 400,000 IHG points after blowing close to 200,000 on this trip.
• We purposely booked hotels when staying in larger cities as the Airbnbs are quite a bit higher here vs in smaller towns.

Total cost for accommodations (in CAD): $2,752 

This comes out to $1,376 CAD per month.  Considering all utilities are included, this seems like a pretty reasonable rate to us (but not “crazy affordable” like most people shout Portugal is).

Of course, our monthly average would be higher if we were not using points for the 12 nights in Lisbon.

Here’s a bit of a crazy comp.  If we wanted to stay at our hotel in Lisbon exclusively and pay in cash, this same $2,752 CAD ($1,897 Euros) would get us 17 nights there (it averages $110 Euros/night while we are there – then $200 Euros over the summer so even fewer then).  Instead, we’re in Europe for 58 nights.  Wild hey!

Transit

One of the pros to deciding on Europe is because of it’s extensive public transit system and thus eliminating the need of a rental car and lugging along our car seats for the kids.

However as we were digging in, we learned that public transit isn’t as widely used outside Lisbon and Porto.  We also learned that car rentals are quite affordable in Portugal  The key is that your reservation should be under ~3 weeks.  If you make it for a longer duration, the price shoots up big time. This knowledge influenced our itinerary a bit in that we wanted to ensure we would be in Lisbon at multiple points for car rental timeline purposes.

Our ah-ha moment was when we realized that the cost of a roundtrip train for the 4 of us to get from Lisbon to the Algarve area in the south would be the same cost as having a car rental down there for 2 weeks!  For those curious, we used Discover Cars (search engine type website) to book our car rentals.  So, car rentals it is…!

We have 3 car rental reservations:

• 12 days while on Madeira island
  • $337, $28/day
• 14 days while exploring the south before heading back to Lisbon
  • $148, $11/day
• 18 days while we are in the north before again making our way back to Lisbon
  • $191, $11/day

Our credit cards provide rental car insurance so no need for us to purchase that.  We will be using public transit while in Amsterdam and Lisbon so there will be some added transit costs in addition to car rentals.  I’d guess we will spend another ~$100 Euros ($145 CAD) on public transit.  And of course, gas too.  But we figure we’d be paying for gas either in Portugal or Canada during this time frame.

As for carseats, we have the 4-in-1 car seats that are super heavy and not travel friendly. 24 pounds per car seat.  No thanks!!  Thankfully, we found a 9 lb travel car seat that expires at the end of March on our Buy Nothing Group and Nic’s sister has a 8 lb lightweight car seat she no longer uses that she’s letting us borrow.  Phew! Thank goodness!

So yep, we are now travelling with a double stroller and 2 car seats. Triple ugh. Wish us luck!

Total cost for car rentals + public transit (in CAD): $821

Additional Costs

• RentFaster: $80
  • We posted our home on RentFaster.ca a bit early and had to renew before securing our renters so we paid the $40 fee twice. We also posted on FB (Marketplace and our local Rental Properties page).  We definitely got the most traction on Rent Faster (and that is who we secured our renters through).
• Waterproof Mattress Pad: $30
  • We already have one of these on Finn’s bed and wanted to get one on our king size mattress as well.  I’d much rather pay $30 to know our mattresses are protected from any sort of spill vs having to replace a mattress outright.
• Travel Medical Insurance: $185
  • Our credit card that we booked our flights with cover the first 21 days of medical travel insurance as well as all the trip cancelation/delay issues that could arise.  So we needed travel medical insurance for the back end of our trip that was not covered. When we first started looking, prices were in the $400-$800 range for a family of 4 which we thought was a bit insane.  Thankfully our local FIRE friends who also travel for a few months a year pointed us in the direction of Insure My Trip – a travel insurance comparison search engine (thanks Travis and Amanda!). From there, we ended up purchasing with TuGo for $5,000,000 of coverage per person with a $300 deductible for a total cost of $184 CAD.  We were able to select an “excluding USA” plan which helped reduce our costs.
• Switching Our Home Insurance to Landlord Coverage: $74
  • We notified our home insurance provider that we needed help figuring out how to switch our home insurance from us living in our primary residence to renting it out for a short term.  A few emails later we were all set up.  I even asked for a breakdown on the change in price and they were quick to get that over.  We also already have it all set up to go back to our regular premium once we return. Thanks Square One, you da best! You truly made this a very easy process.
• Switching our Car Insurance to Parking Status: -$275
  • Since our car will be sitting parked outside our home with just the occasional start from our neighbour to run the engine (thanks Kat!), we contacted our car insurance broker and asked to switch the status to parking while we are gone which significantly lowers the cost to insure it while we are abroad.

Total One-Off Costs (in CAD): $94

• $369 in costs plus the $275 savings on the car insurance

Rental Income

And now, of course, to help offset all the above costs, we decided to rent our house out while we are gone.  We found a family who is moving from Vancouver to Cochrane (surprise, surprise, isn’t everyone these days?!) to rent our house out for 2 months while they look for a home in our town.  (The majority of people who contacted us about a short term rental were people from out of town looking to move to our town.)

We are renting our house out for $2,700/month with $500 of utilities included (should cover all utilities as long as our renters are mindful of their usage). So let’s wipe off $500/month to go towards utilities (although in reality if we didn’t rent it out we’d still have ~$300 in fixed utility costs per month just to have the house sit idle but we will ignore that for this exercise).

Total Rental Income – Utilities (in CAD): $4,400

Grand Finale

Ok, so what does all this mean when we put it together?

• Airfare: $2,832
• Accommodations: $2,752
• Transit: $821
• One-Offs: $94

Total Costs: $6,499

Then throwing in the rental income of $4,400 into the mix, we get a total out of pocket costs of:

$2,099

Boom!  2 months in Portugal for just over $2,000.

When we were calculating our FIRE number, we used $5,000 as our annual travel related costs (we figured some years would be higher, some lower, but $5,000 on average).  To most people this sounds super low for a family of 4.  Now you see how it can totally be possible to explore the world without breaking the bank.

Of course, there will be other travel related costs.  Bakeries, eating out, groceries, exploring things off the beaten path, entrance fees, etc.  But we also aren’t hermits at home and have various costs for our every day sending.  So we will be shifting over some of our “everyday living expenses” to “travel expenses”.  For example, we canceled our sports centre membership while travelling which frees up $200 over the course of 2 months to shift to a “travel entertainment bucket”. Then of course, we will be eating/driving for 2 months whether we are in Canada or Portugal. Yes, we expect these two categories to be higher while in Portugal while trying out new meals and exploring new areas but overall we’re not looking at nothing vs something. I’d guess we spend an extra $600 CAD over the course of 2 months for these two categories.

This is the power of FIRE. We can be flexible with our travel locations and dates.  We can utilize our home to offset travel costs.  We can avoid peak seasons and holiday vacations.  We don’t fee like we need to cram cram cram everything in a 10 day trip.  We can take things slow without breaking the bank.

What was your initial guess for how much our trip would end up costing us? Was it anywhere close to where we ended up? Any take-aways from todays post?  Cheers!

Support This Blog

If you liked this article and want more content like this, please support this blog by sharing it.  Not only does it help spread the FIRE, but it lets me know what content you find beneficial.  Writing is NOT my strong suit and it honestly takes me hours to write each post so the more encouragement the better!  Engaging in the comments below keeps me motivated.  You can also support this blog by subscribing to receive emails anytime a new post is published.  Thank you FImily!

We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account.  Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:

• Investing Newbies: Check out our free Investing 101 Series.
• How much are you paying for your phone plan?  Canadians, learn more about Public Mobile, and see how we are paying $3/mo for our cell phone plan.
• How much are you paying for internet?  Canadians, learn more about the various Independent Service Providers out there to see who services your area so you can lower your monthly bills.
• How much are you paying for home insurance?  We were able to reduce our rates by 25% by switching over to Square One Insurance.  If you live in BC, AB, SK, MB, and ON, check out Square One for your home insurance, landlord insurance, and/or tenant insurance.  Use this link to receive an extra $15 off your quote.  (Note that you must use this link to start the process to get the $15 off even if you prefer to pay over the phone.)

The post Our Cost Breakdown: Two Months in Portugal appeared first on Modern FImily.

How Things Started

At first, we were thinking of heading down south to either Mexico or Colombia. Figured with the 2 hour time change, warm weather, and low cost of living it would be a good starting spot to travelling with kids.

Then as we were doing some research, an email came through with $575 CAD round trip direct flights from Calgary to Amsterdam.  We jumped on it.

Ok, that was a bit rash.

Our thoughts were:

• We both love Europe.  This will be my 9th trip over there and I could easily live there someday.
• Starting things off in Europe is *likely* going to go smoother with two kids in tow.

We know while the costs to get there are low (given flights these days) we will likely be spending more overall as the cost of living is higher in Europe.

But where to go?

I’ve been to Amsterdam and while it is lovely it’s not where we want to be for a few months over the winter as it’s cold there too.  So then we had to figure out where to go from Amsterdam.

We narrowed it down to the following locations:

• Portugal
• Turkey
• The Balkans

I’ve been to Turkey and also loved it there and felt like there’s so much more to explore.  But there is a bit of unrest and instability going on (in comparison to the other areas we were considering). And of course, with the recent earthquake boy are we thankful to not be there at this time. The Balkans are *very high* up on my list but we thought it may be too off the beaten path with kids.  So, Portugal it is!

Once we decided on Portugal our itinerary changed oh I don’t know, 42 times.  Originally we were trying to find a place to park for a month with 2 weeks of travel on each end but then we’d tweak it slightly. And then adjust again, and again, and again.

The Final Itinerary

Finally, after weeks of digging around, we settled on our itinerary and here it is!

• Amsterdam
• Lisbon
• Madeira Island
• Lagos
• Lisbon
• Peniche
• Porto (Arcozelo)
• Lisbon
• Amsterdam

We will have a car rental for all locations except Amsterdam and Lisbon and will be using public transit in those two cities.  We will be staying in hotels while in these two locations and Airbnbs everywhere else.

Amsterdam: (1 night)

We will be spending 1 night on both ends of the trip in Amsterdam mainly as hang out and rest days.  Our hotel (paid via IHG credit card points) is near a few shops/restaurants that we can walk around and stretch our legs.

Lisbon: (4 nights)

We will be starting things off in Lisbon via a 3 hour direct flight from Amsterdam, again staying at an IHG hotel paid with points.  Overall, we will be staying in Lisbon for 12 nights spilt up between three 4 night stays (mainly because of IHG’s 4th night free point system).  Since we won’t have our own kitchen to cook in, we ensured our hotel comes with free breakfast and we are also close to Pingo Doce (Portuguese grocery chain) to pick up some easy-to-prep items.

To start things off, we always try to see if the place we are visiting has a free walking tour and Lisbon does so that will likely be the first thing we do.

Other places to check out during our overall 12 nights in Lisbon include:

• Alfama neighbourhood and take Tram 28 up to Estrella Cathedral
• Belem – Torre (tower), Padrao dos Descobrimentos (Monument of the Discoveries), Jeronimos Monastery, and the original pasteis de nata
• Chiado neighbourhood – Time Out Market
• Parque Eduardo VII and Estufa Fria (greenhouse)
• Oceaniaro – largest aquarium in Europe
• Praca do Comercio and Rua Augusta side street
• Funicular/lifts: Ascensor da Gloria, Bairro Alta, or Ascensor da Bica
• Pink Street

Madeira Island: (12 nights)

I think we are both really looking forward to this part of our trip as Madeira looks very tropical and Hawaii-esque.  We were trying to decide between the Azores and Madeira and choose Madiera because it seems like it has more kid-friendly type hikes (levadas) and walks for us to go on.

We’re excited to check out the natural swimming pools, check out many of the levada trails, and drive through stunning scenery.  It also sounds like the town we’re staying in (Santana) has some great little restaurants to check out. And then of course, the jagged rock formations and beaches.

Lagos: (14 nights)

After doing some digging, I’m quite excited to explore the southern part of Portugal and the Algarve region.  Most people say this is the sleepy part of Portugal (which is just fine with us) but the beaches and rock formations look unreal.  There definitely seems like there are plenty of beaches and things to see in Lagos let alone some of the other nearby towns.  Our Airbnb has a pool on sight so while most locals will think we are crazy, I’m sure we will be in the (unheated) water often during our 2 weeks here.

Some places to check out:

• Praia de Marinha
• Salema beach (dinosaur footprints)
• Meia Praia
• Farol da Ponta da Piedade Lagos
• Beach Estudantes
• Forte da Ponta da Bandeira
• Praia do Barranco do Martinho
• Ponta da Piedade
• Praia do Camilo
• Praia de Donna Ana
• Praia dos Mos
• Algar Seco in Carvoeiro

Lisbon: (4 nights)

We then start to work our way north with a stop back in Lisbon for 4 more nights.  We will see what we were able to accomplish during our first round of Lisbon being jetlagged and go from there.

On the way from Lisbon to Peniche, we plan to stop in Sintra for the day.

Peniche: (8 nights)

While Peniche doesn’t seem to be on any tourist radar, we were able to find an Airbnb here for 1/3 of the cost of anywhere else along the Silver Coast, so Peniche it is! I’m actually excited to be calling Peniche our home as it looks like it a central spot for the Silver Coast region and there are some great little restaurants and bakeries in town.

Places to check out from Peniche:

• Obidos
• Caldas de Rainha
• Foz do Arelho
• Sao Martinho do Porto
• Nazare

Porto (Arcozelo): (10 nights)

We’re staying just outside Porto in a town called Arcozelo.  Reason being, we found an Airbnb with a nicer and larger setup than anything in Porto proper for a lower cost and only a 10 minute drive into the city.  Originally we were planning on Aviero as our most northern location but after some digging it sounds like it’s quite sleepy there this time of year.

Things to do in Porto:

• Again, a free walking tour is in order
• La Ribeira river walk
• Bolhao market
• Take a tram ride
• Teleferio da Gaia cable car
• Funicular doa Guindais
• Jardins do Palacio de Cristal
• Day trips to Aviero, Braga, and Guimaraes

Lisbon: (4 nights)

On the way back to Lisbon from Porto we plan to stop at Coimbra on the way down.

We likely will be exhausted at this point and I imagine us winding down and going to strolls along the streets, checking out our favourite places one last time, and checking out the aquarium.

We’re also looking into getting dentist appointments for teeth cleanings while in Portugal so if that does end up happening I’ll report back with more info about our experience with medical tourism.

Amsterdam: (1 night)

We then hop back on a plane to bring us back to Amsterdam for a night before heading back to Calgary.

There you have it!  I honestly have done very little planning (for my standards at least) for this trip.  I liked how when we spent 5 weeks on Vancouver Island last year we came up with a list of things to do but not really much info for each place which added a bit more spontaneity to the trip which I surprisingly enjoyed. We shall see if I wish I did more planning once all is said and done.

For those who have been to Portugal before, any suggestions of places to check out, off the beaten ideas we haven’t thought of yet, meals/restaurants to try? For those who have Portugal on their radar, hope this itinerary helps with you future travel plans!

Support This Blog

If you liked this article and want more content like this, please support this blog by sharing it.  Not only does it help spread the FIRE, but it lets me know what content you find beneficial.  Writing is NOT my strong suit and it honestly takes me hours to write each post so the more encouragement the better!  Engaging in the comments below keeps me motivated.  You can also support this blog by subscribing to receive emails anytime a new post is published.  Thank you FImily!

We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account.  Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:

• Investing Newbies: Check out our free Investing 101 Series.
• How much are you paying for your phone plan?  Canadians, learn more about Public Mobile, and see how we are paying $3/mo for our cell phone plan.
• How much are you paying for internet?  Canadians, learn more about the various Independent Service Providers out there to see who services your area so you can lower your monthly bills.
• How much are you paying for home insurance?  We were able to reduce our rates by 25% by switching over to Square One Insurance.  If you live in BC, AB, SK, MB, and ON, check out Square One for your home insurance, landlord insurance, and/or tenant insurance.  Use this link to receive an extra $15 off your quote.  (Note that you must use this link to start the process to get the $15 off even if you prefer to pay over the phone.)

The post Our Itinerary: Two Months in Portugal appeared first on Modern FImily.

If not, head on back to our previous Travel Hacking 101 Series posts to learn how to leverage credit card points to travel for free… and have at ‘er!  Now it’s time to maximize those points.  Some airlines offer stopovers and open jaws to award tickets.  One of my favorite airlines, United, happens to be one of the most liberal for stopovers and open jaws. They have great award availability and allow 1 stopover and 2 open jaws for each round trip ticket.  Of course they are not the only airline company to allow these, this is just an example.  What’s this stopover and open jaw gibberish you ask?

Stopovers:

Stopovers are longer layovers. Basically, a layover is when you waste time in an airport (under 24 hours), but a stopover is an intentional break in the ticket that’s more than 24 hours. Think of a stopover as adding an extra destination to your travel plans.

Stopovers are:

• more than 24 hours,
• as long as you want – as long as it’s not too far out in advance,
• free on award tickets – in that they don’t cost extra miles.

This is a way to book a ticket to two places instead of one, and sometimes even more.

Example: Let’s say you want to use United miles to go from NYC to Rome (FCO), but you want to add a stopover in Paris (CDG) on the way. You’d simply book the itinerary online using a Multi-Segment/Mutli-City flight where you’d stay in Paris for a week and Rome for 10 days (or whatever you want).  You would not be spending any more points for this route than you would a flight just to Rome and back.

Poof there you go. Magically you get to add an extra city to your itinerary for no extra charge.

Note, most airlines require the stopover to be in the same region as your destination airport.  So a stop in one European city on the way to another European city.

Open-Jaws

This is a gap in your ticket where the airline is not responsible for transit. Say you fly from NYC into London (LHR) and out of Paris (CDG). The airline allows this gap but is in no way responsible for you getting to Paris, so you have to book your own car/flight/train/whatever.

You turn any stopover or destination into an open-jaw, effectively by adding an extra destination but adding the cost of transit.  Again, you would not be spending any more points for this route than you would a flight just to London and back.

Another example would be Chicago to Bangkok, then leaving a gap and then flying Hong Kong back to Chicago.

Open-Jaws + Stopovers

Now here’s the fun part.  Let’s combo things up and add an open-jaw to a stopover. Understand that the open-jaw doesn’t actually create another stop in the ticket, it’s just breaking up the trip in between a stopover. And again, you would not be spending any more points for this route than you would a round trip flight to one city in Europe and back!!

Let’s break this down into an example to see this beauty in action.

Going back to our first example, you have a ticket with a stopover in Paris (CDG) on the way to Rome (FCO). Well you can take that stop in Rome and make it an open-jaw and say that you’ll continue your trip back to North America from Vienna (VIE) instead of Rome on the way back.

If you had the time you could slowly make your way up to Vienna over land. Or you could use British Avios and book a ticket from Rome to Vienna. Or you could find a cheap Ryanair or EasyJet flight for a few euros.  Either way, you created a gap (an open jaw) in the section of the ticket that stopped in Rome.

Now the ticket would look like this. North America – Paris – Rome / Vienna – North America.  That gap between Rome and Vienna would be filled with other transit.

For the cost of a scenic train ride, a few thousand Avios points, or a discount airline ticket you were able to add a third destination to your trip.

The true maximization would then be to add in a second open-jaw.  For example, instead of flying back to Chicago, you could fly to Miami to visit friends.  You’d then be on the hook for that flight  back from Miami to Chicago but it essentially gets half of your ticket accounted for to add in another trip to visit your friends in Miami before heading home.

Remember, the beauty here is that the points required would remain the same as well. If it were a United roundtrip flight using MileagePlus from North America to Europe and back you would be paying 60,000 miles, period. If it were a ticket from North America to Paris, then Paris to Rome, with an open-jaw to allow you to get to Vienna, and then Vienna back to North America; the ticket would also be 60,000 miles.

(Note if you are using a United partner it’s likely 66,000 roundtrip in economy instead of 60,000 if booking on a United operated flight.)

With Asia you could do a stopover in Hong Kong and then for the destination spilt Bangkok and Bali by using an open jaw there.

North America – Hong Kong – Bangkok / Bali – North America.

For our honeymoon years ago we decided to go to Iceland.  Using United, this would be 60,000 points for a round trip flight from North America.  But with this trick, we decided to add Norway to the mix for no additional points.  Our trip looked like this:

Calgary, Canada – Bergen, Norway – Reykavik, Iceland – Albany, New York

We also could have added Oslo to the mix if we wanted to add a second open jaw (the first open jaw was flying out of Calgary but ending up in Albany for a wedding).  In this case we would have flown to Oslo on United, the taken a train to Bergen and then flown out of Bergen to Reykavik.  So it could have been:

Calgary, Canada – Oslo, Norway / Bergen, Norway – Reykavik, Iceland – Albany, NY

We opted not to include Oslo as we wanted to spend more time in the fjords and I had already been but you get the point.

I highly recommend checking this post from Travel Is Free to see how you can really maximize United’s stopover and open jaw rules.  Drew is a travel hacking genius and I’ve found his site to be incredibly helpful. (This linked post of his is outdated and he’s recently sold his site and now works at The Points Guy but I’ve always found his writing to be easy to understand.)

There you have it.  Open-jaws and stop overs are super easy ways to see more of the world for the same amount of points.  Loyal readers know we are all about the hacks and trying to optimize life without spending extra for it and here is a prime example.  Every airline will have their own rules (and they are constantly changing) so do some digging to see what your preferred airline has to offer when it comes to stopovers and open-jaws to try to maximize your experience.

Have you heard of stopovers and open-jaws before?  If so, have you ever used them for a flight itinerary to get more bang for your buck?  Would love to hear your thoughts in the comments below!

Support This Blog

If you liked this article and want more content like this, please support this blog by sharing it.  Not only does it help spread the FIRE, but it lets me know what content you find beneficial.  Writing is NOT my strong suit and it honestly takes me hours to write each post so the more encouragement the better!  Engaging in the comments below keeps me motivated.  You can also support this blog by subscribing to receive emails anytime a new post is published.  Thank you FImily!

We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account.  Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:

• Investing Newbies: Check out our free Investing 101 Series
• How much are you paying for your phone plan?  Canadians, learn more about Public Mobile and see how we are paying $3 / mo for our cell phone plan.
• How much are you paying for internet?  Canadians, learn more about the various Independent Service Providers out there to see who services your area so you can lower your monthly bills.
• How much are you paying for home insurance?  We were able to reduce our rates by 25% by switching over to Square One Insurance.  If you live in BC, AB, SK, MB, and ON, check out Square One for your home insurance, landlord insurance, and / or tenant insurance.

The post Travel Hacking 101: Stopovers and Open Jaws appeared first on Modern FImily.

Super short notice but on Thursday, December 9th at 11:00 am MT / 1:00 pm ET (yea, like right meow!) we will be taking place in a live Q&A webinar with TD Direct Investing regarding financial independence!

You can register for this free event using this link.  Hope to see some familiar faces over there!

While I do not personally use TD Direct Investing for my investment accounts, I love to see that a large “big box” bank is covering the topic of Financial Independence in their investing webinar series.

For those who are unable to make it, once I have the link to the recording I’ll share it in a future post so stay tuned for that

Ok back to our scheduled programming!

Some people may find travel rewards points useless, mostly because of certain headaches, limitations, and restrictions such as blackout dates, navigating rewards points charts, fuel surcharges, and difficulty finding availability with partner airlines.

Let’s review some tips to keep in mind so that making an award booking will be a less frustrating experience.

1) Know Your Airport

Be sure to know which flights are available near your local airport.  You need to know what options you have. The options that you have near your local airport will affect the next factor.

For example, thanks to simple search using Flight Connections, I know that year-round I can get to Europe on a non-stop flight from Calgary by the following options (with some season options sprinkled in as well):

• WestJet: London Gatwick (LGW) and Paris (CDG).
• Air Canada (Star Alliance): London Heathrow (LHR) and Frankfurt (FRA).
• KLM (SkyTeam): Amsterdam (AMS).

With this ammo on hand, I know that I’ll be looking for deals that have to do with WestJet (rarely any), Air Canada, or KLM… or their partners.

2) Consider Airline Alliances

Though it may seem obvious to many of us, and as we mentioned in our previous Travel Hacking 101 post in this series, keep in mind that many airlines belong to an airline alliance. This means that you can use your points to fly on other member airlines. This is especially useful because different airlines have lower tax and fuel surcharges.

Keeping with our European theme, a prime example of taxes and fuel surcharges to be aware of is American Airlines.  American is part of the One World alliance, as is British Airways.  This means, if you have American Airlines Aadvantage points, you could use those to book a flight with either American or British.  Unfortunately American tacks on huge taxes and surcharges when travelling from North America to Europe when using one of their carries for the leg going across the pond – to the tune of hundreds of dollars which basically wipes out the benefits of using points.  Whereas if you log in to your American Aadvantage account and instead find a flight from North America to Europe using a British Airways carrier for the flight across the pond, poof those taxes and surcharges are gone or significantly lower.  And no British Airways Avios points needed.  The only (major) problem is there are way fewer options to get to and from Europe with British vs American.

Another example, looking at the section above, if I knew I wanted to go to Europe but did not have any Air Canada Aeroplan points, instead I could target points within their alliance (Star Alliance) and book an Air Canada flight that way.  For example, if instead I had United Mileage Plus points (which is also a member of Star Alliance and thus a partner with Air Canada), when I log into my United account I can see all Star Alliance flight options and book an Air Canada flight using my United Mileage Plus points. No Aeroplan points needed.

3) Break Your Trip Down In Segments

Some websites allow you to use the multi-city option. What this means is that you would break your flight down manually into various segments. This will be more time-consuming, but it may help you figure out a decent route.

Going back to our original example, let’s say I’m starting out in Calgary and want to go to Europe but instead of returning back to Calgary, I need to go to New York on the way home for a wedding – yes we’ve done trips like this before!

You have a few options on how to go about searching for the best routes.  You can do multiple one way searches or you can do a multi city search starting at A, going to B, and then to C.  (If you use Google Flights, look for the word “round trip”, next to it you should see a drop down arrow, after selecting that, you should see “one way” and “multi-city” as your other search options. You can then add as many additional segments that you’d like once you’ve selected “multi-city”.)

When I entered random dates, the first date showed no non-stop flight options from Calgary to Frankfurt.  But thanks to step one above, I knew there should be a non-stop flight with Air Canada.  I simply adjusted the departure date back a day and poof the non-stop flight appeared.

For the return from Frankfurt to JFK, I can see that there are non-stop options from Lufthansa (Star Alliance), Delta (Sky Team), and Singapore (Star Alliance).

If I only had United (Star Alliance) points available, I’d then dig into Lufthansa’s award chart as well Singapore to see which carrier has better flight options and rewards requirements.  For example, thanks to Googling “Lufthtansa award chart“, I can see that Luftansa requires 60,000 points one-way for an economy flight from Europe to North America.  Similarly, a Google search of “Singapore awards chart” shows that Europe (zone 11) to East US (zone 13) is 40,000 points for a one-way economy seat.  You bet I’d be leading towards using my Star Alliance points with a Singapore flight then.

4) Call The Agent

Use this option when you feel that you are unable to plan your trip through the website. The agent generally has the same access to information as you do, but they may be a little more familiar with breaking down your trip into segments. However, you may need to pay an award booking fee for using the phone service. I would politely ask if the fee can be waived. Or jot down the segment that they came up with and determine whether you can duplicate their work on the website.

Sometimes, you may see a flight available on an airlines website (or a flight search engine) but when you go over to a partner airline (where you have points available) to book, suddenly that flight is nowhere to be found.  In this case, you’d have to call with the partner flight info on hand to feed it to an agent to book a partner alliance reward flight instead of doing it yourself on the computer.  You can ask for the phone reservation fee to be waived since the online option was not available to you.  Sometimes the airlines will waive this other times they won’t.

5) Be Flexible With Your Dates

This is part of the beauty of FI.  We are no longer tied to the same national holidays that everyone else is trying to vacation around.  We can fly based off off-peak dates which tend to provide the same flights but at lower required points.  Or we can fly on a random Tuesday and return back on a random Wednesday and not worry about how many vacation days we have left for the year.

The example in step 3 above is a prime example of why having flexible dates are so important.  Many long haul flights do not operate daily.  Sometimes they are every other day, sometimes weekly, etc – it really depends on the demand of that particular route.  By shifting the dates around in that search, I was able to eliminate an unnecessary stop which could add delays and/or lost baggage to the mix.

This is the factor that helps me alleviate the most stress. Generally the award flight that you want will be available, but on specific dates. If you are not restricted to your travel dates, you should generally be able to find a reward flight. If this option is not available to you, then the next factor will be important.

6) Plan In Advance

I know that this is easier said than done as often times we cannot pinpoint the exact dates that we can travel. But if this option is available to you, then I would book a reward flight earlier rather than later. It will save you a lot of trouble.

Sometimes, when booking using points, the airlines allot a certain amount of reward flight redemptions per flight. So for example, maybe the flight you’ve been eyeing has 15 spots available to be booked via points.  If you sit on the sidelines or look to make a last minute trip, there’s a higher probability that either A. you can no longer book that flight with points or B. it may cost you more points to book as economy is no longer available.

7) Flight Changes

After you book your reward flight, often times the airline may change the itinerary on you. This actually creates a new opportunity for you. When they change the schedule of the flight, you have an opportunity to rebook your flight to an even more desirable time, generally with no charge. Just keep in mind that the time-frame on when you can rebook your flight after a scheduling change may be limited, so stay on top of this (most of the time any changes must be made within 24 or 48 hours of the notification). If you already selected email notifications for scheduling changes, you should receive the notice within the required timeline but you’ll have to act quick to do some research to see if a better alternative exists that you could switch over to.

8) Diversify Your Portfolio

This factor is for those of you who are able to earn a lot of points (I’m looking at you US readers!) and are willing to invest more time to keep track of your points.  I would study the airlines that you frequently use to determine which airlines are available in your local airport to determine which points to stock up on.  But don’t stop there.  Also become familiar with the alliances so you know when to transfer points for maximum value.

If you live in a larger city, you likely have many airlines flying to different regions.  This basically means you have a cornucopia of options as you have those multiple airlines plus all the partner airlines that are a part of their alliance.

Study the charts of the airlines that make the most sense to you and your flying preference to see where the sweet spots are to be found.

There we have it!  This wraps up part 7 of our Travel Hacking 101 Series and we are almost done with this series. We haven’t travelled internationally in years (thanks ‘Rona!) so all of this writing is giving me the itch to travel again! …. Although the thought of international travel with two kiddos under 3 sounds awful.  So we shall keep collecting and hoarding our points for now! Nic and I have around 1,200,000 airline points and another 400,000 hotel points combined so yea I’d say we’re pretty well versed in this topic, ha!

I’ve been trying to break this series up into digestible posts so hopefully I haven’t gone too far into the weeds!  If you’d like to check out the other posts from this series, please check out our Travel Hacking 101 page. Hope today’s post cleared up any additional questions you may have.  Let us know in the comments below if you have any additional questions from today’s post.

I’ll be taking off from here now through the new year so I hope you all have a lovely holiday season!

Support This Blog

If you liked this article and want more content like this, please support this blog by sharing it.  Not only does it help spread the FIRE, but it lets me know what content you find beneficial. Writing is NOT my strong suit and it honestly takes me hours to write each post so the more encouragement the better! Engaging in the comments below keeps me motivated.  You can also support this blog by subscribing to receive emails anytime a new post is published.  Thank you FImily!

We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account.  Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:

• Investing Newbies: Check out our free Investing 101 Series
• How much are you paying for your phone plan?  Canadians, learn more about Public Mobile and see how we are paying $3 / mo for our cell phone plan.
• How much are you paying for internet?  Canadians, learn more about the various Independent Service Providers out there to see who services your area so you can lower your monthly bills.
• How much are you paying for home insurance?  We were able to reduce our rates by 25% by switching over to Square One Insurance.  If you live in BC, AB, SK, MB, and ON, check out Square One for your home insurance, landlord insurance, and / or tenant insurance.

The post Travel Hacking 101: Award Booking Tips appeared first on Modern FImily.

Just like many questions in life… the answer is… “it depends”. Sorry folks.  There is no one size fits all as the “golden” credit card.  This is where you will need to do some grunt work.

What does it depend on?

• What is your origin city?
  • Are there many major airlines that fly out of this city?
  • Are these airlines part of a larger alliance network?
  • Is this city (or a nearby city) a hub for a certain airline?
• What is your destination city?
  • Are there many major airlines that fly out of this city?
  • Are these airlines part of a larger alliance network?
  • Is this city (or a nearby city) a hub for a certain airline?
• Which alliance network aligns best with your travel goals?
  • Are you looking to travel domestic or within the same continent where you reside?
  • Are you focused on travelling internationally? If so, to a specific continent/region/country?

Do some digging to see which major airlines fly from your origin city to some of the cities you’re interested in.  Do any of them offer non-stop options?  Those are the airlines you will want to hone in on.

Helpful Resources

A great resource to help you out is the website Flight Connections. Simply enter in your starting destination and quickly see where there are direct flights from your location.  You can switch around the origin location to other airports near you to see their routes too.  For example, when I put YYC (Calgary) into the “From” section I can instantly see that there are direct flights to Honolulu from Dec-Apr – with Air Canada offering flights Tuesday, Thursday, and Saturday and WestJet offering flights Sunday, Monday, and Friday.

Google Flights is a great search engine to play around with flexible trips.  I really like their Explore tab to see where you could travel around the globe. Sky Scanner offers a similar set up.

I also like using the site Rome 2 Rio when trying to plan our trips.  In particular I like it when trying to figure out train routes/prices within Europe.

Lastly, you can use Google Flights and enter up to 7 origin locations and 7 final destinations to compare 49 options in one search.  You can then play around with the “price graph” to compare pricing across various months.  For example, this link shows the cheapest flights when looking at YYC, YEG, YVR, YQR, BIL, GEG, and SEA as origins and NRT, ICN, BKK, SGN, DPS, KUL, and SYD as destinations for random date in the future (January 2022).  Letting the search engine do the leg work for me shows that the winning combo is YVR (Vancouver) – BKK (Bangkok) with quite a few options just a few bucks more (as of this post going live at least).

Once you have an idea of which airline you want to target, then you need to figure out which credit card best aligns with that airline/trip.  Some credit cards offer specific airline bonus points. This makes this step easy.  For example, say you are looking to focus on Aeroplan points.  TD and CIBC offer a whole bunch of different Aeroplan specific credit cards meaning once you meet the spending requirement, your Air Canada Aeroplan account will be graced with your bonus points.

Some offer more flexible points which transfer to 10-15 partner airlines.  See who those partner airlines are.  Are any of them your preferred airline?  Great, you’ve figured out this step too.

Once you’ve met the spend requirement, your welcome bonus points will appear online when you log into your credit card banking institution.  You can then transfer those points to your airline reward program of choice.

Credit Card Transfer Partners

Let’s pause to take a look at some of the more common transferrable points programs and who their transfer partners are:

• Chase Ultimate Awards
• American Express Membership Awards
• Marriott Bonvoy
• Citi Thank You Rewards

Chase Ultimate Rewards (most transfer 1:1)

• Aer Lingus
• Air Canada
• British Airways
• Emirates
• Flying Blue (loyalty program for Air France and KLM)
• Iberia
• JetBlue
• Singapore Airlines
• Southwest
• United Airlines
• Virgin Atlantic
• Hyatt
• IHG
• Marriott

American Express (most transfer 1:0.75)

• Air Canada
• Alitalia
• Cathay Pacific
• British Airways
• Delta
• Etihad
• Hilton
• Marriott Bonvoy

Marriott Bonvoy (most transfer 3:1…take note of that when you see their “juicy” bonuses)

• Aegean
• Aer Lingus
• Aeroflot
• Aeromexico
• Air Canada
• Air France
• Air New Zealand
• Alaska Airlines
• Alitalia
• American Airlines
• ANA
• Asiana
• Avianca
• British Airways
• Cathay Pacific
• Copa Airlines
• Delta
• Emirates
• Etihad
• Frontier
• Hanian Airlines
• Hawaiian Airlines
• Iberia
• Japan Airlines
• JetBlue
• Korean Air
• LATAM Airlines
• Quantas
• Qatar Airways
• Saudia
• Singapore Airlines
• Southwest
• TAP Air Portugal
• Thai Airways
• Turkish Airlines
• United
• Virgin Atlantic
• Virgin Australia
• Vueling

Citi Thank You Rewards (most transfer 1:1)

• Aeromexico
• Air France-KLM
• Avianca
• Cathay Pacific
• Emirates
• Etihad
• EVA Air
• JetBlue
• Malaysia Airlines
• Qantas
• Qatar Airways
• Singapore Airlines
• Thai Airways
• Turkish Airlines
• Virgin Atlantic

Alliances

If your preferred airline is not on any of these lists, don’t fret.  Then it’s time to look at your preferred airline and check out it’s alliance system.  In most circumstances, you can earn points from an alliance partner and the flight you’re looking will be an option on their website as these alliance members all work together.  For example, Air Canada (Aeroplan) and United (MileagePlus) are both members of the Star Alliance network.  If you are looking to take a United flight but do not have a credit card signup that will get you United MileagePlus points, you could target a credit card that instead has Air Canada Aeroplan points.  You could then use these Aeroplan points on the Air Canada website to book a flight with one of their partner airlines, United.  Viola.

Lets now take a look at the different partnerships out there. (Note that these partnerships are constantly changing so do a quick Google search yourself as this list might be outdated depending on when you read this)

Star Alliance

• Aegan
• Air Canada
• Air China
• Air India
• Air New Zealand
• ANA
• Asiana Airlines
• Austrian
• Avianca
• Brussels Airlines
• CopaAirlines
• Croatia Airlines
• Egyptair
• Ethiopian
• Eva Air
• LOT
• Lufthansa
• SAS
• Shenzhen Airlines
• Singapore Airlines
• South African Airways
• Swiss
• TAP
• Thai
• Turkish Airlines
• United

One World

• Alaska
• American Airlines
• British Airways
• Cathay Pacific
• Finnair
• Iberia
• Japan Airlines
• Malaysia
• Quantas
• Qatar Airways
• Royal Air Maroc
• Royal Jordanian
• S7 Airlines
• Sri Lankan Airlines
• Fiji Airways

Sky Team

• Aeroflot
• Aerolineas Argentinas
• Aero Mexico
• Air Europa
• Air France
• Alitalia
• China Airlines
• China Eastern
• Czech Airlines
• Delta
• Garuda Indonesia
• Kenya Airways
• KLM
• Korean Air
• MEA
• Saudia
• Tarom
• Vietnam Airlines
• Xiamen Air

It takes some time to play around with all the partnerships out there to determine some of the sweet spots but you can see how certain credits can help you in round about ways to get a certain flight.  You can target a credit card that will get you welcome bonus points on airline A which can then be used to book a flight on one of their alliance partners, airline B. Hope it’s all starting to come together as we begin to wrap up this series!  We have two more travel hacking posts coming up in the future before the grand finale conclusion post on this series.  Hope you are finding it useful and not too confusing!

Support This Blog

If you liked this article and want more content like this, please support this blog by sharing it.  Not only does it help spread the FIRE, but it lets me know what content you find beneficial. Writing is NOT my strong suit and it honestly takes me hours to write each post so the more encouragement the better! Engaging in the comments below keeps me motivated.  You can also support this blog by subscribing to receive emails anytime a new post is published.  Thank you FImily!

We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account.  Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:

• Investing Newbies: Check out our free Investing 101 Series
• How much are you paying for your phone plan?  Canadians, learn more about Public Mobile and see how we are paying $3 / mo for our cell phone plan.
• How much are you paying for internet?  Canadians, learn more about the various Independent Service Providers out there to see who services your area so you can lower your monthly bills.
• How much are you paying for home insurance?  We were able to reduce our rates by 25% by switching over to Square One Insurance.  If you live in BC, AB, SK, MB, and ON, check out Square One for your home insurance, landlord insurance, and / or tenant insurance.

The post Travel Hacking 101: How To Decide on The Right Card appeared first on Modern FImily.

• Travel Hacking 101: What is Travel Hacking?
• Travel Hacking 101: How Does Travel Hacking Work?
• Travel Hacking 101: Airline and Loyalty Programs
• Travel Hacking 101: Types of Rewards Programs

When most people begin to grasp the world of churning credit cards to receive lucrative sign up bonuses they immediately fear that their credit score will take a hit.  10/10 this is ALWAYS the first rebuttal question: BUT WHAT ABOUT YOUR CREDIT SCORE?!?

So today, we are going to focus on the topic of credit.

Credit Card Warnings

This section is focused on useful information you should know before applying for any credit cards, in particular warnings of what not to do.

We’re very lucky to be able to still apply for US based credit cards where large sign-up bonuses are common.  One or two well chosen credit cards can get you flights around the US or abroad for a fraction of the cost.  But applying for credit cards without knowing what you’re getting into is a recipe for disaster.  Banks don’t exist to hand out miles and points.  They exist to make money, lots of it, and at your expense.  

1. APPLYING FOR TOO MANY CARDS
   • As tempting as it may sound, if you are new to miles and points, you should hold off on applying for 6 cards at once to fly around the world and stay at luxurious hotels.  You must be detail-oriented and able to track minimum spending deadlines, payment due dates, the date the card was opened, the credit limit on the card, the remainder left until meeting spend requirement, etc.  I recommend creating an excel spreadsheet to keep track of everything!  Slow and steady wins the race here, start with 1 card to dip your feet in the water and see if you can be organized.  If not, chances are you will negatively affect your credit and this is not for you!
   • Are you able to meet the minimum spending comfortably?  Do you avoid the temptation to spend more than you normally would, just to get a sign-on bonus?  Do you pay your balance in FULL and on-time?
   • If the answer to any of these questions is “no,” you should NOT apply for miles and points credit cards.
2. NOT PAYING YOUR BALANCE OFF IN FULL EACH MONTH
   • Most miles and points cards charge higher rates of interest than other cards (aka how banks make money).  This game is NOT for you if you can’t pay your credit card balance in full each month.  Don’t apply for miles and points cards if you only pay the minimum amount or less than the full balance due.  You will never get ahead in life by constantly paying high rates of interest on credit card debt.
3. SPENDING MORE
   • It is tempting to spend more than what you normally would just to meet the minimum spending needed for a credit card sign-up bonus.  Don’t get caught in this trap.  Keep a budget and stick to it.  Plan out the minimum spending requirements BEFORE you apply for credit cards cards.  Calculate how much you normally spend in a month and then calculate the minimum spending requirements and see if it’s actually feasible or not.
4. YOUR CREDIT SCORE MATTERS
   • Your credit score determines the interest rate banks will charge to pay back debt (this can be from a credit card, a home mortgage, new car, etc.) and it will also helps banks determine if you will get approved for a card or not.  You shouldn’t be playing this game if you have a credit score of ~700 or lower on the FICO scale.  Improve your credit score and the offers will still be there for you.
   • Obviously a score of 650 is better than a score of 550, and a score of 750+ will get you access to lower interest rates than a score of 650. But after a score of ~760, you don’t necessarily get a lower interest rate for having a higher credit score and you likely will get approved for most applications out there.  And really, this should be a mute point as you’re paying your balance in full each month.
5. BUYING A HOUSE OR OTHER LARGE PURCHASE
   • Buying a home is likely the single largest purchase in your life.  And it will bring you far more happiness than applying for a few credit cards.  Credit inquiries stay on your credit report for 2 years and lenders will review your credit report when you apply for a house loan.  This could impact the interest rate on your mortgage as well as if banks are willing to trust you with a mortgage loan.
   • The forums and blogs are filled with comments from folks who’ve managed to get house loans despite applying for lots of credit cards.  Good for them.  But I prefer to be more cautious.
   • I don’t want to risk anything that would either cost me more in interest or not get me approved for a loan. As a suggestion, I’d feel comfortable applying for 2 cards two years out from a home purchase and avoid them completely during the year I plan to buy a home.

Understanding Your Credit Score

Closing Thoughts

Many people assume that opening multiple cards throughout the year, year-after-year, will negatively impact their credit score.  When in reality, as long as you diligently pay off your credit card balance in full each and every month and spend much less than the amount of credit the banks are providing you, you’ll be smooth sailing to boosting up your credit score – regardless of how many cards you have open.  Sure you may see your card dip a few points for a few weeks after opening a new card, but your score will recover back as you continue to make those monthly payments.  Both Nic and I have credits scores over 820 in both the US and Canada and we have been travel hacking for 10+ years.

Were you under the impression that signing up for multiple cards would ruin/hurt your credit?  Hopefully we are making you more and more comfortable to take the plunge into the world of travel hacking!

Support This Blog

If you liked this article and want more content like this, please support this blog by sharing it.  Not only does it help spread the FIRE, but it lets me know what content you find beneficial. Writing is NOT my strong suit and it honestly takes me hours to write each post so the more encouragement the better! Engaging in the comments below keeps me motivated.  You can also support this blog by subscribing to receive emails anytime a new post is published.  Thank you FImily!

We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account.  Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:

• Investing Newbies: Check out our free Investing 101 Series
• How much are you paying for your phone plan?  Canadians, learn more about Public Mobile and see how we are paying $3 / mo for our cell phone plan.
• How much are you paying for internet?  Canadians, learn more about the various Independent Service Providers out there to see who services your area so you can lower your monthly bills.
• How much are you paying for home insurance?  We were able to reduce our rates by 25% by switching over to Square One Insurance.  If you live in BC, AB, SK, MB, and ON, check out Square One for your home insurance, landlord insurance, and / or tenant insurance.

The post Travel Hacking 101: Understanding Your Credit Score appeared first on Modern FImily.

• Travel Hacking 101: What Is Travel Hacking?
• Travel Hacking 101: How Does It Work?
• Travel Hacking 101: Airline and Loyalty Programs

The goal of this intro series is to boost your confidence in the world of travel hacking so you can take the next steps to book your own free/low-cost travel through bite-sized easily-digestibly posts.  Previously, we became familiar with the airline and hotel programs available to sign up for and we also reviewed creating an account with Award Wallet to help keep track of your points.  Today, we are going to focus on the different types of reward programs.

I cannot stress enough that you must be able to PAY OFF YOUR STATEMENT IN FULL EACH MONTH.  You also must be ORGANIZED.  If you can do this, points from credit cards are fantastic.  If you cannot, do not jump into this game as you will be paying more in interest charges than what the “perk” luring you in to sign up is worth.  I will continue to be a parrot with this warning as I do not want to see anyone creating financial stress from chasing credit card bonuses.

There are credit cards that offer bonuses in the form of cash back, general reward points, retail rewards, gas rebates, hotel or travel points, airline specific points, generic airline points, etc. Let’s dig through some of these rewards programs to highlight why I love travel related cards so much.

Cash Back Credit Cards

This type of credit card allows you to earn cash rewards for making purchases. The more the card is used, the more cash rewards you receive. Most cash back cards earn users around 1 percent of total purchases, excluding interest and finance charges. Some cards offer a higher cash back percentage with increased usage; others offer a higher cash back percentage at select merchants or for particular types of purchases.  For example, some card may provide 5% cash back when you spend on gas or groceries.

General Reward Points Credit Cards

Reward credit cards are similar to cash back cards in that cardholders can accumulate points toward a reward structure, which is based on how much the card is used over time. General reward cards offer cardholders a variety of items to cash points in for: gift cards, electronics, hotel stays, plane tickets, jewelry, pet supplies and more.  Generally quite a large amount of points is needed for most purchases.  For example, 20,000 points for a $200 gift card.  This equates to a 1% return.

Retail Rewards Credit Cards

These credit cards are co-branded with a major retailer, such as Disney or Amazon.com.  Points are accumulated by making everyday purchases, though cardholders are awarded with double or triple points for making purchases from the co-branded retailer.  Reward points must be redeemed for products or services from that specific retailer.  For example, when shopping at Old Navy you may be prompted by the sales rep to open an Old Navy credit card at check out for an extra 20% off your purchase.  Typically these are terrible deals.  However, my mom worked in retail for years and constantly had so much pressure from the higher ups to get customers to sign up for credit cards (it was honestly ridiculous) so please go easy on the retail specialists as they are just doing their jobs.

Gas Cards With Points or Rebates

Gas cards come in two species: general and brand-specific. General cards treat all gas companies equally, while brand-specific cards favor one gas company. A general gas rebate card, for example, may give you 1 percent cash back for general purchases but rewards you with 5 percent back for buying gas or having auto maintenance done at any company. A gas-company-specific card, in contrast, will give you a 1 or 2 percent rebate for regular purchases, but you will earn 5 percent rebate only when buying gas at that company’s gas stations.  Similar to the cash back category above where the rewards are typically in the 1-2% range with the occasional 5% deal.

Hotel or Travel Points Credit Cards

This is a genre of credit cards specific to hotels and travel. Some cards are co-branded with hotels. These credit cards allow you to earn points for all purchases, in addition to bonus points for dollars spent on stays at the respective hotel chain. You can redeem your points for free nights and upgrades at the hotel chain your card is co-branded with.  If these cards come up with sign-up bonuses, they can be great.  If they do not and simply give you rewards for stays, then they typically aren’t.

Then there are broader hotel and travel cards with which points can be redeemed for travel, stays at major hotel chains, car rentals, and more.

There are the main things to look for when deciding on a travel credit card:

• The card’s sign up bonus
  • By far the most important perk to target and focus on.  Make sure that you understand what the sign up bonus actually means.
• The card’s perks
  • One off perks such as free checked bags, free airport lounge access passes, airline fee credits, discounted award prices, priority boarding.  These extras add value to a card but definitely not a make-or-break area for deciding on a good card
• The card’s annual fees
  • There are a few no-fee travel cards out there but they are rare.  Most come with some sort of annual fee (typically in the $99 area), though many waive the fee for the first 12 months you hold the card which is more than enough time to get the card, meet the spend, get your points, and cancel the card.  Some of the premier or business cards come with hefty $300-$500+ annual fees which I personally do not target.  Many times these come with travel credits to offset the large fee but I do not want to be forced into having to book a certain flight that year to receive the credit.

Airline Mile/Frequent Flier Credit Cards

While certain general reward credit cards allow points to be redeemed for plane tickets among other things, there is a subset of reward cards specifically for air travel. This type of card allows consumers to earn airline mile credits whenever they make purchases. Some cards are co-branded with a specific airline, while some are generic and can be redeemed for tickets with a variety of airlines. Points can be redeemed for airline travel, much like frequent flier miles.

• Airline-Specific Credit Cards
  • These cards are associated with one airline. Typically, the cardholder accumulates points from both making purchases with the card and by flying on the specified airline. These cards come with other perks — for example, some allow you to earn double points when you use the card to purchase plane tickets with that airline, get priority boarding, avoid baggage fees, and potentially allow for a companion pass for a free/reduced ticket for a companion traveling along with you.  For example, the Citi American Airlines AAdvantage Platinum Select World Elite Mastercard will get you AAdvantage points to use on American or one of their One World partners such as British Airlines.
• Credit Card Travel Partner Cards
  • These cards are not for a specific airline rather the points you earn go towards that credit cards points system.  The credit card company than has a list of partner airlines/hotels in which you can directly transfer your points to and book through the partner airlines website.  For example, the Citi Premier credit card points can be transferred Turkish airlines.  You can then use your Turkish Air Miles & Smiles, which is part of the Star Alliance network, meaning you could then book a United flight with your Turkish points.
• Generic Airline Miles Cards
  • These credit cards allow you to redeem your reward points for air travel through any airline, travel agent or online travel site.  It allows you the flexibility of redeeming your miles for whichever airline best suits the needs of your trip. With a generic airline card, you gain points for every dollar spent on the card, but because it is not associated with a particular airline, you can’t gain additional points by flying. Typically the rewards as not as lucrative with this type of travel card as you can’t access the sweet spots that certain airlines offer.  (Think of something like Expedia Rewards Card with Citi.)

Each credit card is a bit different, so be sure to read the card’s terms and conditions to find out how many miles you gain for every dollar spent. Other things to look for are how many miles you need before you qualify for a free plane ticket, if there is a cap on points that can be earned annually and whether or not unused airline miles expire. Some expire in five years while others do not expire at all. Airline mile reward programs can be costly for credit card companies, so many of these cards come with an annual fee.  Note: If you are organized you can keep track of when you open the card and cancel the card prior to the annual fee hitting 12 months later.

Some Examples:

Hotel Specific Cards:

• Hilton Honors American Express Surpass Card
• IHG Premier Rewards Club by Chase
• Radisson Rewards Visa Card by US Bank

Airline Specific Cards:

• British Airways Avios by Chase
• United MileagePlus Explorer by Chase
• Southwest Rapid Rewards Premier or Plus by Chase
• American AAdvantage by Citi
• Delta SkyMiles by American Express

Credit Card Travel Partner Cards:

• Sapphire Preferred by Chase
• Ink by Chase
• Thank You Premier by Citi
• Bonvoy by American Express
• Venture Rewards by Capitol One

Some of these cards come with 1-2% back if you spend on that specific airline or for travel related purposes.  But that’s not the sweet spot with these cards.  By now, you know the sweet spot comes in the sign up bonuses.

Let’s take a look at an example to see why I love travel credit cards so much.

The Cash Back vs Travel Card Showdown

1. Cash Back
   1. You earn 2% back on everyday spend and 5% on gas.  Let’s say when spending $3,000 on the card, $300 of it was on gas.  So on $2,700 you get 2% ($54) and on the $300 on gas you 5% ($15) for a total of $69 in cash back.  Hell, if you only used that card for gas after $3,000 in gas spending, you got yourself $150.
2. Travel Card
   1. Let’s forget about any extra percentages or rewards you get for spending, let’s solely focus on the bonus after reaching the minimum spend.  A typical card would be in the realm of spend $3,000 get 50,000 points.  Typically, that is enough points to fly round trip within US/Canada twice.  So I can book two round trip tickets from Calgary to Fort Lauderdale and only pay the ~$60 in international taxes/fees.  These tickets typically cost a minimum of $400, likely closer to $500 but let’s stick with $400 for this exercise.  Two tickets then cost $800. Subtract the $60 in fees we will still be stuck with, or $120 in fees for the pair.  The brings us to a value of $680.  I spent $3,000 and get $680 in value.  That would be equivalent to a cash back card providing ~22% back!  Now for Canadians, a 50,000 is not as common and it’s likely closer to 25,000 points or 1 round trip flight.  So halve the value above to $340 in value or the equivalent of ~11% cash back.  Even though many countries outside of the US do not offer as lucrative as deals, its still WAY better than cash back if you as me.

The purpose of today’s post is to go over the different types of credit cards out there.  This likely was not anything breath taking or new but it’s important to realize that not every credit card is created equal.

If you have a preference for a certain airline or hotel, some of the hotel/airline specific cards can be great for you.  For example, we scout out the IHG and United cards.  If you are looking for a more broad approach, the more flexible travel partner cards can be beneficial.  For example, a card earning Chase Ultimate Rewards points can be transferred to United, Jet Blue, British, Southwest, etc. which gives you more options as long as those airlines match up with your flight preferences.  There is no point for Canadians to seek Southwest points as they likely do not fly to/from your origin city often unless you’re planning to go on a great American adventure and hop from one US city to another.  British Avios points are likely much more practical someone based in Europe.

So are travel cards the only options out there?  No, of course not.  But hopefully that example above helps to illustrate why we definitely prefer travel related cards to any cash back card out there.  They simply do not compare.  Most people are intimidated or do not understand how to use their points acquired from travel credit cards but once you figure it out you can see how piling up a few of these cards each year can really start to save you some serious cash when it comes to travelling.

I think I’ve beat the travel credit card options out there to death so now we’re ready to move on.  Next up in the series is understanding your credit score and demystifying the thought that churning multiple cards a year is bad for your credit score.

Support This Blog

If you liked this article and want more content like this, please support this blog by sharing it.  Not only does it help spread the FIRE, but it lets me know what content you find beneficial. Writing is NOT my strong suit and it honestly takes me hours to write each post so the more encouragement the better! Engaging in the comments below keeps me motivated.  You can also support this blog by subscribing to receive emails anytime a new post is published.  Thank you FImily!

We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account.  Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:

• Investing Newbies: Check out our free Investing 101 Series.
• How much are you paying for your phone plan?  Canadians, learn more about Public Mobile, and see how we are paying $3/mo for our cell phone plan.
• How much are you paying for internet?  Canadians, learn more about the various Independent Service Providers out there to see who services your area so you can lower your monthly bills.
• How much are you paying for home insurance?  We were able to reduce our rates by 25% by switching over to Square One Insurance.  If you live in BC, AB, SK, MB, and ON, check out Square One for your home insurance, landlord insurance, and/or tenant insurance.  Use this link to receive an extra $15 off your quote.  (Note that you must use this link to start the process to get the $15 off even if you prefer to pay over the phone.)
• How much are you paying for your monthly utility bills?  See how you can likely save on this monthly expense.

The post Travel Hacking 101: Types of Rewards Programs appeared first on Modern FImily.

Mastering frequent flyer miles, hotel points, and credit card programs truly is life changing.  Frequent flyer miles from travel credit cards have allowed us to visit over 25 countries, with enough miles left over to go anywhere in the world tomorrow if we wanted to. We currently have over 1,000,000 travel points in our ‘travel bank’.  We pay less for these trips than you probably did for your last vacation.  What’s the catch?  You’ll have to learn a few things and open the right credit cards.  I’m not writing this to brag.  I’m writing because my techniques are very easy to repeat.  And I’m hoping that by the time these series is complete, you too will feel comfortable to dig in and get some steeply discounted trips too!

Today, we are going to focus on the various airline and loyalty programs that exist.

Step One – Research and Learn

The first thing to do is become familiar with the airline and hotel programs and to sign up for their free memberships to collect and use points.  These frequent flier programs are completely free and there’s no reason not to sign up.  Of course, I wouldn’t sign up for every program below, but if there are any airlines below that you normally fly on (be it often or occasionally) there’s no reason not to be a member of their rewards program.  Every time you fly with them, you’ll earn a few miles based on the route.  And of course, if you sign up for a travel rewards credit card, you can then transfer those points to one of their transfer partners (sometimes it happens automatically) – and you’ll need to be signed up with this transfer airline ahead of time to make said transfer.

Below is a list of the top programs for your convenience. Once you sign-up, write down your user name and password for step two.  This list is very extensive so for Americans I would focus on the top three; United, American, and Delta and I would also suggest Southwest, Air Canada, & British Airways.  For Canadians, I would go after this same list but replace WestJet with Southwest.  Alaska can be quite lucrative too for those living on the west coast.

I’d also take note to when their points expire.  Some airlines (Delta, Southwest) never expire while some some airlines have a limited shelf life of inactivity before your miles get wiped away.  It’s important to keep track of your latest activity and when your miles will expire.  The best way to keep and active status is to:

• Fly on that airline to receive points for miles flow.
• Put a purchase on a credit card that is directly linked to that frequent flier program.  For example, buy a pack of gum for $1 on your Chase United Explorer card if your United Mileage Plus points are nearing its expiration.  Once the Chase statement has been paid, your United points should transfer over to your Mileage Plus frequent flier program.
• Transfer points from one of your travel ‘banks’ to the frequent flier program that is nearing expiry.  For example, transfer 1,000 of your Chase Ultimate Rewards points over to your United Mileage Plus account for 1,000 United points to reset the clock.  See below to see which rewards programs partner with certain airlines.

Airline programs (included is also whether that airline is a transfer partner of American Express Membership Rewards, Chase Ultimate Rewards, Citi ThankYou Rewards, and/or the Marriott Bonvoy programs as those tend to be the most prominent and have the best transfer programs):

Airlines

• Aer Lingus (Chase, Bonvoy)
• Aeroloft (Bonvoy)
• AeroMexico (Bonvoy, Citi)
• Air Canada Aeroplan (Amex, Bonvoy)
• Air France-KLM/Flying Blue (Chase, Bonvoy, Citi)
• Air New Zealand (Bonvoy)
• Alaska (Bonvoy)
• Alitalia (Amex, Bonvoy)
• American (Bonvoy)
• ANA (Bonvoy)
• Asia Miles (Amex)
• Asiana Airlines (Bonvoy)
• Avianca (Bonvoy, Citi)
• British Airways (Amex, Chase, Bonvoy)
• Cathay Pacific (Bonvoy, Citi)
• Copa Airlines (Bonvoy)
• Delta (Amex, Bonvoy)
• Emirates (Chase, Bonvoy, Citi)
• Etihad (Amex, Bonvoy, Citi)
• EVA (Citi)
• Frontier (Bonvoy)
• Hainan (Bonvoy)
• Hawaiian (Bonvoy)
• Iberia (Chase, Bonvoy)
• Japan Airlines (Bonvoy)
• JetBlue (Chase, Bonvoy, Citi)
• Korean (Chase, Bonvoy)
• LATAM Airlines (Bonvoy)
• Malaysia Airlines (Citi)
• Qantas (Bonvoy, Citi)
• Qatar (Bonvoy, Citi)
• SAA Voyager (Bonvoy)
• Saudia Alfursan (Bonvoy)
• Singapore (Chase, Bonvoy, Citi)
• Southwest (Chase, Bonvoy)
• TAP Air (Bonvoy)
• Thai Airlines (Bonvoy, Citi)
• Turkish Airlines (Bonvoy, Citi)
• United (Chase, Bonvoy)
• Virgin Atlantic (Chase, Bonvoy, Citi)
• Virgin Australia (Bonvoy)
• Vueling (Bonvoy)

Hotels

• Hilton (Amex)
• Hyatt (Chase)
• IHG Rewards (Chase)
• Marriott (Chase)

Now seeing this list and hearing that Chase are my favorite points to acquire may not make much sense.  It sure seems like Mariott Bonvoy has a ton more reach.  And they do!  However, as you continue with your learning (I feel like I’m your sensei Splinter from Teenage Mutant Ninja Turtles) you’ll see that most Bonvoy conversions happen at a 3:1 ratio whereas chase is 1:1.  Meaning if you earned 50,000 Bonvoy points, that will only  get you 16,666 United points whereas you’d get the full 50,000 United points with 50,000 Chase points.  So you’d need to find a Bonvoy card offering 150,000 points to compare apples to apples!  Ouch.  Tricky tricky Bonvoy….

Step Two – Manage Your Points

Join an online mileage manager.  I know what you’re thinking… that is WAY too many user names and logins for me to keep track of.  Luckily, you weren’t the first to have the worry so let me next introduce you to Award Wallet.

Award Wallet is a free service that tracks your balance, status, user name, and password in nearly every airline, hotel, credit card, rental car, and loyalty program in one place.  The three big exceptions are United, Delta, and Southwest which have blocked Award Wallet from accessing your account information (you can update these programs manually within Award Wallet).  To see the full list of supported programs, click here.  Not only are your balances now listed in one place, but you can click the ‘Update All’ button to see them all updated in a fraction of the time it would take to go to every program’s site.  Other managers include Usingmiles.com and Tripit.

I’m old school and track everything myself in an excel sheet but Award Wallet is a great place if you want to condense the time it takes to track your balances.

Step Three – Determine The Right Card For You

Choose the right credit card(s).  Having powerful cards with big sign-up bonuses is the easiest way to jumpstart your points strategy.  By the time this series is complete, you should have a good idea of what to look for in a card and how to determine which card is the right one for you.

Determining which credit card is best for your spending patterns and lifestyle can be difficult.  You have to be tracking your expenses each month to know if you can reach some of the cards minimum spend requirements.  You also have to understand what points you will be getting with each card and how best to apply them based off your location and travel plans.

Before you actually apply, I’d recommend getting your free annual credit report and making sure all of your accounts are in good standing. Most banks use FICO scores to determine your creditworthiness.

Closing Thoughts

A lot of people get bogged down in the details of travel hacking, but it honestly doesn’t have to be that difficult! I am 100% convinced that with minimal effort, just about any financially responsible person can take 1-2 nearly free vacations every single year just with this one small, but important life hack.  It will take some reading and education to feel comfortable to dive in, but once you do, you can literally earn a flight in under 15 minutes by signing for the credit card of your choice and spending on it (and setting up auto pay so you never miss a payment) vs your previous payment method.

The next post in this series will go over the various type of rewards cards out there.  Hope you are enjoying this series and is not too complicated to understand in these bite sized posts!

Support This Blog

If you liked this article and want more content like this, please support this blog by sharing it.  Not only does it help spread the FIRE, but it lets me know what content you find beneficial.  Writing is NOT my strong suit and it honestly takes me hours to write each post so the more encouragement the better!  Engaging in the comments below keeps me motivated.  You can also support this blog by subscribing to receive emails anytime a new post is published.  Thank you FImily!

We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account.  Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:

• Investing Newbies: Check out our free Investing 101 Series.
• How much are you paying for your phone plan?  Canadians, learn more about Public Mobile, and see how we are paying $3/mo for our cell phone plan.
• How much are you paying for internet?  Canadians, learn more about the various Independent Service Providers out there to see who services your area so you can lower your monthly bills.
• How much are you paying for home insurance?  We were able to reduce our rates by 25% by switching over to Square One Insurance.  If you live in BC, AB, SK, MB, and ON, check out Square One for your home insurance, landlord insurance, and/or tenant insurance.  Use this link to receive an extra $15 off your quote.  (Note that you must use this link to start the process to get the $15 off even if you prefer to pay over the phone.)
• How much are you paying for your monthly utility bills?  See how you can likely save on this monthly expense

The post Travel Hacking 101 – Airline and Loyalty Programs appeared first on Modern FImily.

• Travel Hacking 101: What Is Travel Hacking?

This week we are going to dig into what it takes to make travel hacking a realistic strategy for you.

What Do You Need To Make This Strategy Work?

1. Being responsible with credit cards
   • Pay off your credit card balance in full each month and carry NO credit card debt.  There is a reason why this is step number 1 and I keep harping on it.If you currently hold credit card debt or can’t pay off the balance in full each and every month, this is NOT for you.
   • Use the card only for items you’d be buying anyway, do NOT go above and beyond your normal everyday spending just to receive a bonus.
   • The reason why these lucrative bonuses exist is because these financial companies are taking a calculated risk assuming most people will NOT pay off their cards in full each month and the crazy high interest (20+% WHAT?!) charged to those people will far outweigh the benefits given to others (us disciplined folks). In NO circumstance will paying interest on your card be offset by the points/miles/perks you get from the card so don’t even think about it!
2. Have an excellent credit score and have good standing credit
   • • The exact credit score to have before starting your travel hacking endeavors varies depending on who you ask. Personally, I’d say if your credit score is not above 730 do not start travel hacking. Instead, work on building up your credit score.
     • If you need to build up your credit, take a look at your day to day spending, create a budget (or anti-budget), pay down your debt, save up for an emergency fund, and rebuild your credit.
3. Be VERY organized
   • Patience and organization are key to getting the biggest benefit out of travel hacking.Keep track of your spending, to the PENNY, so you know when you reach the minimum spends. Do not rely on your monthly statement balances for this. Actually log into your credit card account online, review every single line item spent, and add that transaction (date/item purchased/cost) into a spreadsheet.  Keep in mind that any annual fee does NOT count towards your minimum spend.
   • Set up autopay to pay the balance in full each month.  You can do this directly online by logging into your credit card account and syncing up your bank account information to automatically pay off your balance each month going forward.
   • Set alarms for 11 months after you get approved if you need to cancel before the 1-year mark to avoid annual fees and be aware of when you can reapply (every bank will have its own rule so a simple Google search will provide you with this answer).  It’s also worth calling the credit card company to see if they will waive the annual fee or give you points if you keep the card open to justify the annual fee.
   • Keep track of your login info securely.
   • Opening multiple cards can get confusing so we advise setting up a simple spreadsheet to track all of your credit cards along the way. Here is an example of some notes you can include. Personally, I have a different tab for each credit card. I title the tab with the credit card info and the last few numbers of the card. For example, for a Chase United Explorer Plus credit card, I may title it “Uni123”. Then in that tab, I have a column for the date, a column for the item purchased, a column for the cost, a cell totaling up all the spending so far, and another cell with the required spend minus the actual spend to date so I can see how much is left until I earn the bonus.  I also include the following info so I can keep things organized.
   • 
4. Do Not Buy More Things Just To Get Points
   • If you normally spend $700/month but now you’re finding yourself spending $1,000/month once you get into points churning, you should reassess as this is counterproductive. You’re spending more to get “free” travel but it’s no longer free anymore as you’ve inflated your spending to get there! Sure maybe you can buy some gift cards to your grocery store within the period to reach the minimum spend which you can then use over the next few months. I’m not poo-pooing this. This is a good strategy and something we personally do. I’m talking about getting that weekly massage just to reach your minimum spend when massages typically only happen a few times a year.
5. Don’t Compare Yourself to the Travel Joneses
   • Once you start joining groups and reading more about travel hacking you’re going to see people who use all sorts of travel-related acronyms, seem to fly first class every month, and only stay at the Ritz. Remember that travel hacking is personal and will be different from person to person depending on your goals – very much like your path to FI!  People who own their own businesses, travel for work, or are seasoned experts at this game, will have an advantage over beginners or those without opportunities for additional points (they often time get targeted promos). Make your goals, set realistic expectations, and enjoy your victories no matter how big or small.
6. Determine Your Travel goals
   • Insider scoop, most people skip this step in the game but it’s the most important one!Rather than ask “What’s the best credit card to sign up for?” you should be asking “Where do I want to go?” and then work backward from there to figure out the best plan of attack. Then the question to ask is “What are the best rewards redemption options for this specific origin and destination combination?” And then figure out which airline within this reward program is the best fit for your needs. And then figure out which credit card will get you there.
   • Open the right card for YOU and YOUR SITUATION! There are some great credit cards with many transfer options out there but that doesn’t necessarily mean it’s the best card out there for everyone.  There is no one size fits all credit card out there.
   • As you get more experienced, you’ll learn that it’s a good idea to diversify the points you’re earning.  Don’t stress over this to start.

What Do You Have To Do? 

• Old school way of accumulating with purchases/stays/flights you go on = remain loyal and fly the same airline (loyalty).
• Travel “hacking” way = credit card sign up bonuses (diversity).
• Each of these credit cards offers a bonus, but there are some spending stipulations. A typical bonus offer might read:Earn 50,000 bonus miles when you spend $3,000 in the first 3 months. $95 annual fee waived the first year.
• To unpack this statement: you have to spend a cumulative $3,000 within the first 3 months after your approval date (not when the card arrives in your mailbox, this is a common misconception and many people miss out on their bonus because of this oops!).  You can and should pay your balance off on time and in full each month. So, you aren’t running any debt and you aren’t paying any interest. (I know I sound like a broken record here on this point but it’s absolutely critical!)
• When you reach that cumulative $3,000 figure you earn your 50,000 bonus miles after the close of that current credit card statement.
• This card also has a $95 annual fee, but it is waived the first 12 months, so you can earn your bonus during this trial period for no cost and close the credit card as you approach the end of that year if you determine you aren’t getting value from it any longer.

What’s The Potential Value?

• So there’s no interest expense (since you’re paying it off in full each month) and no annual fee expense on most cards (since you’re canceling before any annual fee hits unless you feel the annual fee is justified to keep for a prolonged time frame – which some are). That means you literally just earned 50,000 miles that you should get at a minimum $500 – $1,000 worth of travel value (depending on the airline’s reward program) for $0 in expense. Of course, you had to spend a few hours logging into your spreadsheet to calculate when you’ve reached the spend so really you’re getting paid $500-1,000 for a few hours of work. For most people, this likely is more than your hourly wage and a worthwhile endeavor.
• For that $3,000 in normal life spending that you simply put on this new credit card you earned $500 – $1,000 in value. That’s like getting a 16.67% – 33.33% rebate on that $3,000!
• Compare that to your normal 1% “rewards” credit card where you’d earn $30 for that same $3,000 and you can see how powerful this strategy really is. Even a 5% cashback card doesn’t compare.  Which would you rather, $150 in cash or $500-1,000 in airfare?  This is why I personally do not chase cash back rewards cards.
• Now picture yourself opening a few of these cards every year to earn thousands of dollars of travel.  This is why our annual travel expenses are very low yet we’ve been to over 25 countries and all over the US and Canada.  

How To Hit The Spending Requirement?

• Put all spending on the card for your family and pay off in full each month.Everyday spending: groceries, restaurants, internet, cable, electric/gas, water/sewage/garbage, cell phone plans, gas, car insurance, home insurance, etc.  See if you’re able to put your rent, mortgage, and/or property taxes on a credit card.Buy yourself a gift…..card. Gift cards to places you know you will use soon (groceries, gas, etc.).
  • Take it one step further and do this for your parents who may not be into travel hacking and have zero interest in it. We do this by purchasing monthly gift cards for my mom to her local grocery store (online for free, gift cards get sent right to her home) and she sends us checks for that account.  Doing this essentially provides us with enough points to use when we purchase flights with points for her to come and visit us a few times a year.
  • Going out with friends? Put the whole tab on your bill and have everyone Venmo over their portions to you.
  • Have a trusted friend or family member making a big upcoming purchase? Put it on your card and have them transfer you the money instead.
  • Wait to apply for a card until you know you have a large purchase coming up. We strategically apply for a card when we know our annual car insurance premiums are up for renewal as that covers a decent portion of the minimum spend in one purchase.
• Once you reach the minimum spend (or close to it as the process of applying, getting approved, and getting a new card in the mail can take a few weeks) rinse and repeat. Don’t open 4 cc’s all at once as it’s highly unlikely you can reach those minimum spends all at the same time! But it’s very realistic to open 4 cards over a year (as most require the minimum spend to be met within the first 3-4 months).
• Beware some credit cards allow authorized users (aka your spouse/partner) which sounds like a good idea in theory as you both can use the card as you’re out and about on your respective errands to supercharge your spending to get you to the minimum spend quicker. However, it may prevent the authorized user from opening that same card and getting the bonus! Research each card’s rules as there likely is a small bonus (~5,000 points) if you add an authorized user but now you just prevented them from opening up their own card for the point bonus for awhile.  Bummer!

How Do You Earn Points?

• Fixed value travel reimbursement50,000 points = $500 off your travel purchasesThis is the most straight forward award program but likely the least lucrative. These credit cards are not tied to a specific rewards program.  Rather you book your travel using that card and you will get a statement credit for say $500 off.
• Co-branded airline and hotel credit cardsSome examples include Citibank with American, Chase with United, Alaska with BoA, TD with Aeroplan, Delta with AmEx.These are the most specific offers. The reward is associated with a specific airline. Depending on your origin/destination plans, some of these could be great options for you. Once you learn which airlines are the best for you (Are you close to a hub? Do they have many flight options from your closest airport? Is their award chart competitive?) you can focus your efforts on certain airline-specific cards.
• Transferable points cardChase Ultimate Rewards, Citi ThankYou Rewards, Amex Membership Rewards, RBC Avion, etc.These are the most flexible. These points transfer to ANY of their partners. You can simply Google something like “Chase Ultimate Rewards airline transfer partners” to find what you’re looking for. Points remain with the bank until you make the transfer to your airline of choice.
  • Another nice perk to this type of card is that if you cancel the credit card but have another no-fee credit card associated with that bank the points can remain live. For example, if you have a Chase Freedom (no-fee card) and a Chase Sapphire Reserve (annual fee card), you can earn points with the Chase Sapphire Reserve, cancel the card as you approach your 1-year mark, and the points earned will still be within your Chase account and you can transfer anytime after the card has been canceled as long as the Freedom is still open. 
  • These flexible cards are also useful if one of your rewards programs is approaching its expiration date (which requires more organization skills to be aware of any upcoming expiration dates).  Say you earn 50,000 Chase Ultimate Rewards points and your British Avios points are due to expire soon.  You can transfer 1,000 of those 50,000 points to British Avios to have activity on that account to reset the clock and the other 49,000 points can be transferred wherever else you wish.

Miscellaneous Points To Consider

• It’s not 100% FREE travelTaxes, surcharges, fees (international flights) still apply.Some airlines charge really high fuel surcharges if you fly their specific airline. For example, British Airways flights across the Atlantic from North America to Europe come with really high fuel surcharges in the multiple hundreds of dollars basically eliminating any incentive to use points with them. Whereas other airlines, such as American Airlines which is a partner airline to British and can be used with those same points as they are both within the One World Alliance, do not charge nearly as large of a fuel surcharge if you fly an American Airline airline across the pond instead.  This is a hard concept to comprehend but once you do, you can learn about certain airline’s pain points to avoid and other airline’s sweet offers to chase after.
• Some cards come with additional perks such as free checked bags, priority boarding, NEXUS/TSA precheck/Clear reimbursement, etc.
• Sign up for rewards accounts with airlines and hotels and link these up when you apply for a co-branded credit card associated with a specific airline or hotel so it automatically syncs with your rewards account.
• Check out your local airport – are they a hub for a certain airline? Do they offer direct flights to areas of interest? If so, with which airline? Google “(city) airport wiki”.
• Be flexible – can you travel in a few weeks? Can you travel on a Tuesday and return the following Wednesday? Can you travel on a holiday?
• Do your research on the different types of cards, what they offer, branding, and partnerships as credit card offerings are always changing.

A lot of people get bogged down in the details of travel hacking, but it honestly doesn’t have to be that difficult. I am 100% convinced that with minimal effort, just about any financially responsible person can take 1-2 nearly free vacations every single year just with this one small, but important life hack. It will take some reading to educate yourself to feel comfortable to dive in, but once you do, you can literally earn a flight in under 15 minutes by signing for the credit card of your choice and spending on it versus your previous payment method.

Missed the rest of our Travel Hacking Series? Here you go!

• Travel Hacking 101: What Is Travel Hacking?

Support This Blog

If you liked this article and want more content like this, please support this blog by sharing it. Not only does it help spread the FIRE, but it lets me know what content you find beneficial. Writing is NOT my strong suit and it honestly takes me hours to write each post so the more encouragement the better! Engaging in the comments below keeps me motivated. You can also support this blog by subscribing to receive emails anytime a new post is published. Thank you FImily!

We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account. Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:

• Investing Newbies: Check out our free Investing 101 Series.
• How much are you paying for your phone plan?  Canadians, learn more about Public Mobile, and see how we are paying $3/mo for our cell phone plan.
• How much are you paying for internet?  Canadians, learn more about the various Independent Service Providers out there to see who services your area so you can lower your monthly bills.
• How much are you paying for home insurance?  We were able to reduce our rates by 25% by switching over to Square One Insurance.  If you live in BC, AB, SK, MB, and ON, check out Square One for your home insurance, landlord insurance, and/or tenant insurance.  Use this link to receive an extra $15 off your quote.  (Note that you must use this link to start the process to get the $15 off even if you prefer to pay over the phone.)
• How much are you paying for your monthly utility bills?  See how you can likely save on this monthly expense.

The post Travel Hacking 101 – How Does It Work? appeared first on Modern FImily.

Typically your three largest annual expenses are in the housing, transportation, and food categories which is what made up our Master The BIG Stuff Series.  We’d like to focus on another expense category that tends to take up a large chunk of change but doesn’t have to:

Travel.

And how does one master traveling?

Travel Hacking

What is travel hacking you ask?

Travel hacking is more of a buzz word than anything.  The truth is, there aren’t “hacks“.  Instead, there are tools and strategies out there that you can deploy to travel for nearly free.  There is nothing illegal or shady here.  So while we use the term “travel hacking”, note that the more appropriate term is “miles and points collecting”.  Other pseudonyms for utilizing credit card rewards for travel are “credit card churning” and “award travel”.  It’s all pretty much interchangeable.

Travel hacking is the art of collecting frequent flier points and miles to get nearly free flights, hotels, car rentals, and more.  It’s more than finding a “deal” online.  It’s a side hobby that you can use to significantly reduce your travel-related expenses.  Typically you can use points instead of the airfare cost and only have to pay the taxes – meaning you can fly across the globe for a FRACTION of the cost compared to purchasing the ticket outright once you figure out the ideal strategies.

Those of you who follow other FI content creators have likely heard about this ever-growing and popular hobby as it’s yet another way to gamify life by cutting expenses without depriving yourself of experiences. And it likely will lead to some life changing experiences along the way to your FI number.

My Introduction to Travel Hacking

Growing up, I would travel within Florida and across the US for various hockey tournaments (typically with a teammate) but travel was not something my family did together frequently.  Thank you mom and dad for providing my brother and I with the insanely expensive sport of travel hockey!  I took my first trip overseas in 9th grade with my family to London and Paris and that was the first time my mom had ever left the US.  I then did a term abroad in college in Florence, Italy where I was bit by the travel bug.  Big time.  During that term abroad I also visited Spain and Ireland.  I decided to write my senior economics thesis on travel and tourism trends.  I became hooked on traveling and it was my number 1 passion in my 20s.  Thankfully, one of my co-workers introduced me to the world of travel hacking back in 2010 and it has saved me tens of thousands of dollars in flights, accommodation, and transportation and allowed me to visit over 25 countries plus all over the US and Canada without breaking the bank.

We don’t spend extra money, take special trips to earn more points, or get into debt. We do this with our normal everyday spending.

You may be a bit skeptical when reading this and think it sounds too good to be true.  Or that it sounds too complicated and time-consuming.  Or that you have to spend a lot of extra money to make it work.  Is there a catch?  There has to be… what’s the catch?!

It wasn’t until I was sitting on the first free flight that I earned through my regular, everyday spending that I realized this was real.  And replicable.  And my credit score remains well above 800 points to this day.

Think about the next trip you want to take (in a post COVID world). Maybe it’s a solo trip around the world, a family vacation, a honeymoon with your loved one, or a trip to see your parents.  Travel hacking will help you get there by reducing the costs of your travels to nearly zero.  It’s really pretty insane when you think about it.

Be warned, the more you research the more intimidated you may get.  We are hoping that after this intro series you will have the confidence to try it and recognize the world of travel rewards is learn as you go, just as personal finance is.  Just as there is no cookie-cutter way to FI, there is no cookie-cutter route to travel hacking.  A lot of it depends on your location and where you are trying to go.

How Does Travel Hacking Work?

Ok here we go.  The best and fastest way to accumulate points is through credit cards.  Here’s the quick and dirty.

1. Sign up for frequent flyer accounts with airlines (for free)
2. Sign up for credit cards in which the points redeemed can be transferred to your preferred airlines
3. Meet the required minimum spend to get the sign-up bonus
4. Transfer points to your travel partner of choice (if applicable)
5. Cancel credit card before annual spend comes up (depending on the card, most have annual fees that you can avoid)
6. Book award travel with points instead of miles (and only pay taxes)
7. Enjoy your incredibly low-cost flight
8. Rinse, wash, and repeat

While we were much more avid travel hackers in our 20s pre-baby, we are going to provide several travel hacking posts geared towards beginners to hopefully get you started on your journey.  We will end this Travel Hacking 101 Series with a list of our favorite travel bloggers out there and helpful resources/websites to help you become a travel hacking pro too.

To provide some context, as mentioned before we’ve been to over 25 countries and have been all over the US and Canada.  We also currently have over 1 million travel points in our travel “bank”.  Typically, between Nic and I, we sign up for 4-5 cards per year.  And as of this writing, both our US and Canadian credit scores are above 820.  So while I would not consider ourselves experts as we do not do this full time, we do have a good hang of how it works.

Of course, you can decide how many credit cards you want to apply for in a given year.  Typically the points from a good card in the States will come with 50,000+ sign-on points and a good card from Canada will come with 25,000+ sign-on points.  Depending on the airline and awards program, a round trip flight within North America is ~25,000 points and a round trip flight to Europe is ~40,000-60,000 in economy.  So when you stack these bonuses together you can put together entire trips with airfare and hotels included.

Typically the US banks offer the most lucrative travel rewards out there and fortunately, we are still able to sign up for US credit cards so that’s the bulk of our bread and butter but readers from Canada (and elsewhere) can apply many of these principles as well, the deals may just not be as juicy.  If there are other countries out there where travel hacking through credit cards exist, let me know!

What Is The One Single Thing People Can Do To Earn More Miles?

“Give me six hours to chop down a tree, and I will spend the first four sharpening my ax.” – Abraham Lincoln

To my knowledge, Abraham Lincoln was not a credit card travel hacker (ha), but his quote highlights the importance of preparation.

If you are interested in starting travel hacking and getting more miles, being organized and keeping track of your personal finances needs to be priority numero uno!

Why?

Rewind to 2010 when I was first introduced to travel hacking.  I had no clue what my credit score was.  I’ve always kept track of my spending but didn’t realize how important your credit score is for travel hacking.

So what’d I do?

I sharpened my ax, and got my finances together.

Over the next few months, I created organizational spreadsheets (that I still use to this day).  Keeping track of my expenses was a double win as now I could apply this practice one step further where I would track my expenses broken down by credit card to see when I reached the required minimum spend to receive the large point bonus.

As I equipped myself with the knowledge of responsible credit card use, I watched my credit score begin to improve.

And I also was taking a keen awareness of my spending which lead me further along in my FIRE journey before I knew I was even on it (this was all before discovering Mr. Money Mustache and the concept of FIRE).  Knowledge is power.

When I was approved for my first card I was excited (this was back in the day of 100,000 point bonuses) but still hesitant of the whole process.  Once I reached the minimum spend and saw the points in my account, I was pumped but still hesitant.  I was finally hooked when I did more research to determine how to actually turn those points into a reward flight and booked a round trip flight to Europe for 40,000 points.

Some people get hooked right away and apply for 5-10 cards within the first year.  Others are more cautious and only apply for one card and wait a year before doing anything else.  There’s no wrong or right way to it.  Just do what is comfortable for you. But remember to stay organized!  If you are not willing to put in a few hours a month to remain organized, then this endeavor is not for you.

After getting acquainted with my shiny new card, I spent every penny I would normally spend using it.  I paid my balance off in full each and every month, and I watched my credit score rise as I planned how I would use my points.

Closing Thoughts

A lot of people get bogged down in the details of travel hacking, but it honestly doesn’t have to be that difficult! I am 100% convinced that with minimal effort, just about any financially responsible person can take 1-2 nearly free vacations every single year just with this one small, but important life hack.  It will take some reading and education to feel comfortable to dive in, but once you do, you can literally earn a flight in under 15 minutes by signing for the credit card of your choice and spending on it vs your previous payment method.

We hope this intro post got you excited to learn more.  Stay tuned for more travel hacking posts shortly

Support This Blog

If you liked this article and want more content like this, please support this blog by sharing it.  Not only does it help spread the FIRE, but it lets me know what content you find beneficial. Writing is NOT my strong suit and it honestly takes me hours to write each post so the more encouragement the better! Engaging in the comments below keeps me motivated.  You can also support this blog by subscribing to receive emails anytime a new post is published.  Thank you FImily!

We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account.  Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:

• Investing Newbies: Check out our free Investing 101 Series.
• How much are you paying for your phone plan?  Canadians, learn more about Public Mobile, and see how we are paying $3/mo for our cell phone plan.
• How much are you paying for internet?  Canadians, learn more about the various Independent Service Providers out there to see who services your area so you can lower your monthly bills.
• How much are you paying for home insurance?  We were able to reduce our rates by 25% by switching over to Square One Insurance.  If you live in BC, AB, SK, MB, and ON, check out Square One for your home insurance, landlord insurance, and/or tenant insurance.  Use this link to receive an extra $15 off your quote.  (Note that you must use this link to start the process to get the $15 off even if you prefer to pay over the phone.)
• How much are you paying for your monthly utility bills?  See how you can likely save on this monthly expense.

The post Travel Hacking 101: What Is Travel Hacking? appeared first on Modern FImily.