Prepare an Emergency Fund Before Booking Your Next Vacation

cancelled flights

Last Christmas, 1,000 travelers on 414 flights canceled by storms spent the evening stranded at Dallas/Fort Worth International Airport, according to the Dallas Morning News. Meanwhile, 21 percent of flights were delayed 15 minutes or more last year, according to the Wall Street Journal's airline scorecard. Depending on the length of a delay, unforeseen expenses, ranging from an extra meal to a new plane ticket, can add up. Bottom line, unexpected travel expenses are not uncommon. Preparing an emergency plan for such contingencies can keep your trip from getting ruined by a blown budget.

Common Emergency Travel Expenses

You can prepare for unexpected expenses by realizing that any likely emergency falls into a few common categories, as outlined by TRIP, a travel advocacy website sponsored by the US Travel Insurance Association.

  • For instance, several types of expenses stem from lost or stolen items. These include lost wallets, passports, smartphones and luggage.
  • Another expense category relates to unexpected travel complications. Delayed flights illustrate this category. Examples that stem from this include additional taxi fare, car rental costs or bus rides.
  • Expenses can also come from emergencies affecting your health or vehicle. These include illnesses and auto accidents.
  • Entertainment costs can add to your budget. For instance, you might find a souvenir, or your friends might want to go out for dinner and a movie.
  • Finally, some costs result from forgetfulness. You might find yourself facing unexpected expenses because you forgot to factor in the cost of a meal, a gratuity or a currency exchange rate.
Financing Sources

It is important to budget for your trip and unexpected expenses that you may incur. But if you are on your trip and you have an unexpected expense that you haven’t budgeted for, where can you find funds? There are a number of potential resources. Ask relatives or friends to wire you money. If that is not an option and you have Internet access, you can possibly apply for a cash loan and have it deposited into your bank account so you can withdraw it with your ATM card.

To protect yourself, avoid keeping all your funding sources in one wallet. Spread them out between your person, your luggage and remote resources.

Setting a Travel Emergency Budget

How much should you set aside? A good emergency stash is a function of sound general travel budgeting. Travel Made Simple expert Ali Garland recommends that a complete budget should cover major transportation costs such as flights, minor transportation expenses such as taxis, accommodations, food, activities and spontaneous spending such as unplanned stops and souvenir purchases. For a more detailed breakdown, Prepared for Travel's online guide provides a Travel Budget Calculator. Use these guidelines to factor in how much you might need. Ideally you should have enough available to cover extra flight and hotel bills, with $1,000 to $3,000 serving as a good rule of thumb.