This is a guest post by Paul Marshman, The Travelling Boomer, on how to visit Europe without breaking the bank.
Most travellers agree – Europe is a great place to visit, especially in summer. Problem is, it can be an expensive place to travel. Staying in downtown London or dining on the Champs Elysees in Paris can leave your credit card with a major hangover.
However, it doesn’t have to be like that: there are ways to enjoy Europe’s bright lights without leaving your bank account drained.
I’ve visited several of Europe’s great cities in the past few years, from Copenhagen to Budapest, and I’ve found a few strategies that can help keep your travel costs in check. Here are The Travelling Boomer’s five ways to visit Europe on a budget.
Skip the hotel
Finding a low-cost hotel in many European can be a challenge, especially in mid-summer, when prices are at their highest. How to find an affordable place to stay?
The Champs-Elysees at night in Paris, France
Try the alternative accommodation sites, such as Airbnb, WIMDU and VRBO. While these aren’t always the cheapest way to go in North America, a recent survey shows that they’re almost always cheaper than a comparable hotel in Europe. As well, you often get the use of a kitchen, so you can self-cater a few meals and save more money.
The cheapest deals typically rent you a room in someone’s home. But you can get whole apartments for substantially less than the price of a hotel room. In fact, sites like Tripping.com specialize in apartment and home rentals. Some specialize in one city, like Paris Address and Nostromondo in Rome. If you have a long time horizon, you can even try doing a home exchange.
You have to join the service you choose, but it’s free, and the process isn’t too onerous. But book early: the better places tend to book up fast, especially in high season.
Have breakfast in bed
Speaking of self-catering, one expense you can avoid is the hotel breakfast. Most European hotels offer breakfast, but in many cases it’s not included in the price of your room. You can find yourself paying 10 to 15 euros to have breakfast in the dining room every morning – and over the course of a trip, that adds up.
You can go to a coffee shop if there’s one nearby, but that may not be cheap, either — coffee is expensive in Europe. Better to pick up some pastries, or some bread and cheese, and have breakfast in your room in the morning.
You may still have to spring for a take-out coffee, but there’s a way around that too: bring along one of those immersible water heaters and make your own tea or coffee in a cup (Starbucks makes a decent instant coffee, if you’re a fan).
Buy a pass
Paying transit fares and tickets to museums, castles and such can leave you with empty pockets by the end of the day. But you can save some money by purchasing one of the discount cards most European cities sell.
For example, the London Pass gives you entry to attractions like the Tower of London, Westminster Abbey, Kew Gardens and Thames River Cruises; other cities include free rides on the local transit and train services. These cards can save you time, as well, since you can often skip the ticket line.
These cards aren’t cheap, but they can make sense if you’re going to see a few attractions during your stay. Most European museums charge more than $10 for admission, so it doesn’t take many to exceed the cost of the card. If that doesn’t work for you, consider a transit pass, which can save you money if you’re moving around town a lot.
One last suggestion: if you’re visiting for just a day or two, try the Hop-on, Hop-off (HoHo) bus. For a reasonable price – typically $20 to $30 — you can see most of the main attractions in as little as a half-day. You get the lay of the land, and there’s a guided tour thrown in.
Get off the main street
Dining in that lovely piazza in the middle of Rome can be so romantic – and so expensive. The restaurants in European cities’ most famous spots are there to cater to tourists, and that means they’ll charge you tourist prices.
It’s tempting to sit at one of those marble tables overlooking the historic church, but do yourself a favour and just have a drink. When it’s time to eat, look for a place in a less famous spot.
In most cities, you can enjoy great food and avoid the great big bill by looking for a restaurant a block or two off the main square. You’ll likely get more authentic food, and maybe even meet a few of the locals.
In Britain, for example, neighbourhood pubs serve some of the most economical meals. And ethnic neighbourhoods often have some of the best values. If your heart is set on the high-profile restaurant, go for lunch, when prices are often substantially lower.
A couple of other tips: In some places the portions are big enough to share an entrée, if you’re not big eaters. Or you can order a salad with meat in it as your main course. And in cities like Paris where the tap water is safe, ask for plain water instead of expensive bottled water. It’s free.
Go shopping
This seems like strange advice when we’re talking about saving money, but shopping at local stores can save you big-time. Pop into the neighbourhood shops and markets to do your souvenir shopping: you’ll often find the same things you saw in the tourist shops, for half the price. A few years ago I found an Ikea-style alarm clock in a store in Bruges, Belgium for 3 euros; I’ve been using it ever since.
Local food stores are a great resource, too. You can pick up some breakfast fare (see above), put together a picnic, or find some great local food products you can take home — at lower prices than in the airport duty-free shops.
It’s also fun to see what the natives eat, and what they pay for it; I rarely leave a city without browsing through a food store. If nothing else, I pick up some snacks to save me stopping at one more expensive café.
Those are a few suggestions that can help you visit Europe on a budget. Of course, you can save more by staying outside the heavy tourist zones, or by choosing a different destination. Smaller cities are generally cheaper than big ones, and Central European cities like Prague and Budapest are cheaper than more famous places like Paris and Rome.
Finally, if you don’t have to travel in summer, try visiting in the spring and fall: the weather may not be ideal, but the prices can be a lot more comfortable.
In any case, don’t let the prices keep you from seeing Europe. It’s one of the world’s great destinations, full of beauty and culture and history. And if you use some of these tips, you can do it without taking out a second mortgage.
Jeff M says, “I know that I’m supposed to be saving at least 10% of my income, maximizing my RRSP and TFSA contributions, and enrolling in my employer’s matching pension plan. But, my expenses are pared down to the bone. I have no savings and I just can’t afford to start. What do I do?”
I realize there are people whose extremely low income makes it difficult to even pay for life’s necessities, let alone have a savings plan. But, let’s face it, the majority of Canadians would be able to save if they examined and changed their lifestyle and spending habits somewhat.
Here’s why starting a savings plan is a lot like going on a diet.
The decision
We’re usually quite satisfied with our current habits – if we weren’t we wouldn’t have them to begin with.
Then there’ll be some tipping point when you start thinking you need to make a change. Maybe you can’t get your favourite jeans over your expanding hips, or you can’t make it up a flight of stairs without pausing half way to catch your breath.
Related: Good habits in fitness and finance
Money wise, you may be making a life change – getting married, having a baby, retirement is closing in on you. Whatever it is, you’re dissatisfied with your current state of your finances.
Set a goal
How bad is it? Why do you want to change? You need to have a clear and precise reason. Be specific and write it down.
Diet wise, maybe you want to want to improve your health; lower your cholesterol, be able to go bike riding with your children, or improve your quality of life. Or, perhaps you want to shed a few pounds to look awesome at the beach or at your high school reunion.
A savings goal could be a longed-for vacation, a down payment on a house, at least a middle-class retirement lifestyle, or even a big screen TV.
How many pounds do you want to lose? How much do you need to save?
Devise a plan and figure out the best strategies for getting there. Outline your steps and then keep careful track of your progress.
Set yourself up for success
Go through your pantry and cupboards and toss all fattening, high-calorie snacks. Go online to discover an eating plan you can live with (no fad diets for you).
Many apps offer support and tips to keep you on track. Re-stock your cupboards and refrigerator with healthy foods. Find some delicious low-cal recipes and plan to prepare healthier meals at home. Start an exercise program.
Scrutinize your budget to see where your money is going. Monitor your spending, then cut out nonessentials.
How many subscriptions do you have that you don’t use? How much are your daily coffee runs, happy hours, last-minute food pickups, or spontaneous purchases costing you a week?
You can scale back your spending and find some money here that can be allocated to your savings without making you feel deprived.
Identify your triggers
Do you eat – or spend for that matter – when you are sad, lonely, upset, or stressed?
Don’t be too hard on yourself if you screw up. Use slipups to see when you’re the most vulnerable and decide how you’ll handle the situation next time.
Often it’s our well-meaning family or friends that seem to sabotage us – “One piece of peanut butter-caramel cheesecake with real whipped cream won’t hurt you,” – “You never come out with us to the casino anymore.”
Related: I can’t afford it
Announcing your intentions not only makes you accountable, but more importantly, gives you a good excuse. But it can take a bit of courage to say, “No, I can’t eat that – I’m trying to lose a few pounds, or, I’m saving up to buy a motorhome so I can travel across the country next year.”
Don’t let a setback make you give up completely:
- Your washing machine has washed its last load and you need to dip into your new savings account to buy another, then your car needs a major repair.
- Your extended family takes you to an all-you-can-eat buffet and you practically cleaned it out.
Just take a breath, and start again.
Reward yourself
It can become discouraging when you have a large goal and it doesn’t seem like you’re making much progress. That’s where incremental goals come in:
- By working at losing 1-2 lbs. a week I will have lost 10 lbs. by August.
- I will find a way to have $2,000 saved by the end of summer.
Keep your motivation high and reward yourself when you reach a mini goal. Celebrate every milestone. Build in the occasional indulgence without completely blowing all the good work you’ve been doing – savour that piece of chocolate, or buy whatever you consider a small treat for yourself.
Or, you can choose fun that’s not food or money based.
Final thoughts
There’s nothing wrong with a Spartan(ish) two-week meal plan, or having a massive garage sale to give you an initial boost. However, you should think of this as a lifestyle change, not a temporary project. Think of it as a positive step towards a better future.
Be more mindful of what you’re spending your money on, and what’s going in your mouth. Both should give you pleasure.
Being successful comes down to willpower and common sense.
Canada Pension Plan Expansion: Why It Matters
Finance Ministers from across the country meet today in Vancouver to discuss CPP expansion. At stake is not just about whether we should expand the Canada Pension Plan, but how it should be phased-in and who will benefit.
One proposal will see sweeping changes across the board both in terms of higher benefits and premiums paid by all workers. Another scenario targets specific segments of the population without employer pension plans who may not be saving enough for retirement.
CPP expansion requires support from the federal government plus seven out of 10 provinces representing two-thirds of the country’s population.
What happens in Vancouver today could set the stage for the first major CPP reform in 20 years. Here’s why Canada Pension Plan expansion makes sense:
Canada Pension Plan Expansion
Canadians need to save for retirement and many of us are not doing a very good job of putting away money for our future.
CPP is a way for every working Canadian to have access to a defined benefit pension plan that will provide up to one-quarter of the national average wage in retirement.
In an age when employer pension plans are fading away and average Canadians are coping with the highest debt-to-income ratio in our history, it’s imperative of our government to revisit mandatory savings plans to ensure the financial well-being of our post-retirement citizens.
I work in the public sector, so I’m one of the lucky three in 10 Canadians who still have a defined benefit pension. I contribute approximately 12 percent of my salary toward the plan, which my employer matches, and that pension will form the bedrock of my income in retirement.
But what do I hear from my co-workers and newly hired employees? It’s not gratitude that they have access to such a rich savings plan. No, instead it’s more like this:
I’m sure some of you would rather take the reins and invest that money on your own rather than being subject to the whims and restrictions of a public pension plan.
I trust that many of you would invest those funds wisely and maybe, just maybe, could even end up with more money at the end of your career.
But what happens to the 80-to-90 percent of employees who may not be such good stewards of that extra money?
We could argue that people need to make better and more responsible financial choices but the fact is that savings rates for Canadians are very low by historical standards and the average Canadian family saves less than $1,500 per year.
Voluntary or Mandatory?
One area that CPP expansion will discuss, among other things, is whether to make the additional contributions voluntary. But Canada already has voluntary savings plans in the form of RRSPs and TFSAs, vehicles that Canadians don’t even come close to maxing out.
When given the choice between consuming now and saving for later, most people will choose to live for today.
Imagine instead of mandatory payroll deductions, my colleagues and I had to opt-in to our workplace pension program: How many would willingly choose to contribute?
Behavioural economist Dan Ariely shared a fascinating chart that explained the psychological difference between opting-in and opting-out. He said countries in which organ donation was the default option had a nearly 100 percent participation rate among its citizens, whereas countries that require citizens to opt-in to consent to organ donation had a remarkably lower participation rate (between 4 and 27 percent).
We need CPP expansion, not because we need another “tax” on our income, but because we all benefit from living in a society that takes care of its citizens and doesn’t leave its old, disabled, widowed, victims, or simply unlucky in the lurch.
How should CPP expansion be rolled-out?
First off, anyone without the luxury of a defined benefit pension plan should be automatically enrolled into a newly expanded CPP.
Forget government workers and public sector employees – they’ll be fine. It’s the other 70 percent of the workforce without access to a workplace pension who needs the expanded program to help fund their retirement savings.
I’m also not worried about seniors today; the vast majority won’t be eating cat food in their old age – far from it.
Retirees today represent the last era of gold-plated pensions (for both the corporate and government worker) and saw unprecedented growth in the housing market, which translated (or will translate) into enormous, tax-free wealth.
Instead, think of today’s 30-something employees living in one of the larger cities in Canada. They’re starting to get established in their careers, maybe settling down and getting married. But their employers don’t offer a pension program, or even health benefits for that matter, they’re still paying off student loan debt, and they’re trying to save up for a down payment on a $400,000 condo.
There’s no chance they are saving for retirement unless it’s through some form of mandatory savings program.
So how will they afford these additional monthly CPP contributions when they’re struggling with so many other competing priorities?
People remarkably find ways to adapt to the money available in their chequing account. If they have $800, they’ll find a way to spend $800. But if they only have $600 (because $200 went toward expanded CPP contributions) they’ll find a way to spend $600 and be okay.
That’s the power of forced savings and paying yourself first. If it’s there, you’ll spend it. If it’s not there, you won’t miss it.
One interesting piece of research that came out of the Ontario government’s proposed Ontario Retirement Pension Plan was that, after accounting for some reduction in personal savings in response to ORPP contributions, personal household savings should increase by an average of 25 percent thanks to the ORPP.
Interestingly enough, it’s people with pension plans that tend to save more outside of their pension than their private sector non-workplace pension counterparts. Saving begets more saving!
One added benefit of enhancing a program on a massive scale such as the CPP – lower fees.
Canadians currently have over one trillion dollars invested in mutual funds and pay the highest investment fees in the world. Your investment advisor won’t agree with more of your paycheque going towards a low-cost and well-run vehicle like the CPP, but investors might be better off with less of their money going into high MER mutual funds.
Final thoughts
We’re not all trying to keep up with the Kardashians; many Canadians are legitimately struggling to get by and that is the point of widening the safety net of CPP.
We need to recognize that it’s damn tough to save in today’s economic climate. Think of the couple that wants to start a family and diligently saves 10 percent of their paycheque every month to put towards a down payment on a house in a year. But in a year, the cost of the house they were looking at has risen by 20 percent. That’s a difficult situation.
Sometimes we act like there are only two types of people, ants and grasshoppers, while ignoring all the nuance in-between, such as the unlucky or ill-timed entrepreneur whose business failed.
Increase the band of CPP so that our contribution rate is a little bit higher and the yearly maximum limit is a little bit larger so that society as a whole can benefit from the increased savings, and in turn, the increased consumption in retirement.
Then design some favourable and flexible rules around the self-employed or those who are already blessed with a defined benefit pension.
The last thing I haven’t touched on is longevity risk and the very real possibility of outliving our savings in retirement. Our needs may change and healthcare costs may become a major challenge.
Wouldn’t you rather have access to a predictable monthly income that rises with inflation and is guaranteed whether you live to 70 or 120?