Despite high interest rates and ongoing inflation, many Canadians continue to prioritize travel. In August 2023, Canadians took 924,900 return trips overseas — a 22.9% increase year over year and just 17.4% below pre-pandemic levels, according to Statistics Canada. Bookings for overseas travel by Canadians have risen month over month throughout 2023, which shows a strong appetite to get away despite rising costs.
To make travel affordable, many households are making trade-offs. A FlightHub Group survey found 41% of Canadians reduced their grocery spending to afford travel, and 28% of those who couldn’t otherwise afford a trip have used credit card debt to fund it. Heading home to a large credit card bill is a common and costly consequence, so it helps to plan and use smart strategies to avoid debt while still enjoying a vacation.
Instead of relying on credit, combine practical budgeting with expert travel hacks to save. Below are effective, actionable tips to help Canadians reduce trip costs without sacrificing the experience.
3 ways to save money on travel for Canadians
1. Choose an affordable destination
Your destination is one of the biggest cost drivers. Personal finance influencer and frequent traveller Danica Nelson, who lives in Toronto and has visited 25 countries, recommends choosing places where the Canadian dollar goes further, such as Indonesia, Thailand and Vietnam. These destinations often offer high-quality accommodations, low-cost dining and affordable services.
Nelson shares examples: you can find five-star hotels in Vietnam for as low as about $55 CAD per night, enjoy fresh seafood and a beer for roughly $5 CAD, or pick up a banh mi for around $1 CAD. In Bali, she’s paid around $60 CAD for a flower bath and a one-hour massage. For Canadians who want longer-term low-cost living while working remotely, there are also affordable hubs like Panama, Costa Rica and parts of Greece that stretch travel budgets.
“What’s your strategy for saving on your next trip? ✈️” — MoneySense
2. Use a travel credit card to save money and earn points
Booking flights, hotels and car rentals through a travel credit card’s rewards program can reduce your net cost and help you earn points toward future trips. Co-branded airline cards can provide preferred pricing on flights and lower the number of points needed for certain redemptions. Travel cards can also help you avoid foreign transaction fees (typically around 2–3%) and earn rewards redeemable for hotels, flights or statement credits.
When evaluating cards, consider the rewards structure and whether the card offers flexible redemption options or preferred pricing with specific airlines. Also check the insurance benefits—many travel cards include travel delay, cancellation and emergency medical coverage, which can save money if something goes wrong on your trip.
3. Switch to carry-on luggage
Traveling with only a carry-on can reduce baggage fees and save time at the airport. Nelson recommends investing in a suitcase that meets airline carry-on size limits plus one personal item like a backpack or tote. Before you travel, check whether your ticket includes free checked baggage; some fares and classes do, while others charge for each bag.
Other simple money-saving habits include buying groceries for breakfasts and lunches and budgeting for dinners out in advance. Small choices like packing snacks or limiting daily splurges can add up into meaningful savings without undermining the trip.
Flight booking hacks to use for your next trip
To find deals, use flight search tools and deal sites that track flash sales and provide price alerts. Tools such as Google Flights offer calendars highlighting the cheapest departure and return dates for your trip length, helping you compare options quickly.
Sign up for airline newsletters and follow carriers on social media—Air Canada, WestJet and other airlines often promote targeted discounts, flash sales or package deals. Flexibility in travel dates makes it easier to find lower fares: avoid long weekends, major holidays and peak summer travel when prices typically spike. If possible, choose weekday departures, which are often cheaper than weekend flights.
If your dates are fixed, you can still find early deals posted months in advance. Setting up price alerts and subscribing to airline newsletters increases your chances of spotting those offers as they appear.
Using travel rewards points to save money
Pick a rewards program that matches your travel habits. Travel credit cards that earn flexible points are useful if you don’t always fly the same airline, because you can redeem points for flights, hotels, Airbnbs or even statement credits. Cards tied to specific airlines or alliances may be better if you consistently travel on a single carrier and want perks like upgrades.
Nelson saves on flights and lodging by redeeming reward points through programs that allow flexible redemption, such as scene-based programs or transferable points offered by some major card issuers. She recommends doing the math before redeeming points: sometimes paying cash is a better value than using points, depending on blackout dates, fees and the program’s redemption rates.
When choosing between airline-specific programs and flexible point systems, consider how often you travel, where you travel and whether flexibility or airline loyalty will give you the most consistent value.
How much money should you save to travel?
Start by creating a vacation budget that lists all expected costs: flights, accommodations, local transport, food, activities and a contingency fund for unexpected expenses. A sinking fund dedicated to travel helps you separate discretionary savings from money needed for bills and essentials.
High-interest savings accounts (HISAs) are a practical place for a travel sinking fund. They offer better returns than standard chequing accounts and keep your travel money accessible. Nelson suggests looking for accounts with competitive interest rates and welcome bonuses. Keeping travel savings in a HISA helps your balance grow while you wait for the trip.
How to budget for travel
Certified Financial Planner Joseph Curry recommends a “pay yourself first” approach for discretionary savings. Direct your income into a central hub account that covers fixed expenses like mortgage or rent, utilities and retirement contributions. From what remains, allocate discretionary money for groceries, entertainment and travel. If you leave all discretionary funds in one account, they tend to get spent quickly; designating a portion specifically for travel prevents last-minute credit card reliance.
Curry advises opening a separate HISA for travel and setting up automatic transfers from your discretionary account after each paycheck. This consistent, automatic saving builds your travel fund without requiring constant oversight. At the same time, ensure you leave enough discretionary funds for essentials like groceries, phone bills and memberships you want to keep.
Relying on credit cards to pay for vacations can create a cycle of debt and interest that makes future travel harder. A dedicated savings routine keeps you in control and helps you avoid paying interest on past trips instead of saving for the next one.
The ultimate travel budgeting hack: Know your values and priorities
Be deliberate about how you use discretionary money. Clarify whether travel is a top priority or whether you prefer spending on dining, shopping or other experiences. If travel is a priority, commit to a sinking fund and be willing to skip or decline invitations that don’t fit your budget. If other priorities matter more, it’s fine to say no to expensive trips so you can spend on what adds the most value to your life.
Read more about travel:
- The best credit cards for airport lounge access in Canada for 2023
- Working towards your dream lifestyle? Here’s how financial goals can help
- The best travel insurance credit cards in Canada for 2023
- Is your credit card’s travel insurance enough?