It’s mid-winter here in Oregon — that bleak, grey time of year when it seems like the rain will never end. When I was young, the winter didn’t bother me. But now that I’m firmly entrenched in middle age, January makes me dream of leaving the cold to travel abroad to warmer destinations like Hawaii, or Mexico — or London.

I’ve always wanted to travel, but have never been able to afford it. Last summer, my in-laws were kind enough to pay for a family trip to London, Dublin, and New York. As a novice adventurer, I didn’t know what to expect. Over the course of our vacation, I learned some important lessons about traveling frugally while having fun. These tips aren’t just for summer holidays — they’re useful all year long:

  • Research your destination. Before you leave, make a list of sightseeing priorities. Use the internet to find free and inexpensive attractions. Every city we visited featured free museums and tours. You can spend a fortune on guided tours if that’s your thing, but the frugal traveler can find plenty to do on her own.
  • Budget. When you travel overseas, you generally know how long you’ll be gone and where you’ll be staying. I don’t keep a budget for daily life, but I did for our European vacation. Before I left, I saved $2100 for the three weeks we’d be gone. I spent some of that in cash, and charged some to a credit card. When I returned, I used the remaining cash to pay the credit card balance. By planning in advance, I knew exactly how much I could spend.
  • Carry a guidebook. A travel guide is worth its weight in gold. You’ll pay $20-$30 for a good one, but ultimately the book will save you money. Travel guides feature information on tourist attractions, local customs, and cheap places to eat and sleep. They can give you the inside scoop on the best days to visit museums, or tell you how to find seldom-visited free events.

  • Pack light. Experienced travelers always offer this advice, but rookies seldom heed it. Even if you’re staying in the same hotel for three weeks, packing light can prevent headaches. My father-in-law brought six bags for our three weeks of travel. He overpacked. Within days he had to pay to ship things home. Even I took too much: a small suitcase and a knapsack, both of which were crammed with stuff. In the future, I’ll take the knapsack, but when I use it as a carry-on, it’ll only have the essentials: a change of clothes, a book, and my iPod.
  • Pack smart. Take items that serve double duty. Don’t carry stuff you can buy at your destination. (You can buy shampoo in London, you know.) Leave room in your bag to bring home things you purchase while on vacation. Don’t neglect your sanity — there are a few items I like to have with me at all times: earplugs, an eyemask, my iPod (with noise-canceling earphones), a book, and comfortable shoes. Armed with these essentials, I can be happy almost anywhere — even when stuck for eight hours in an airport terminal.
  • Manage your money. Know which money source is best for each situation. I didn’t understand this, and was dinged with unnecessary fees. For example, you should know that Visa charges a 1% overseas usage fee regardless of whether you’re using debit or credit. Some cards waive this fee. If I had understood my accounts better, I would have used my credit card for most transactions — I would have received the best exchange rate and avoided a common fee. But because my credit card charges 3% to withdraw money from an ATM, I should have used my debit card to obtain cash. Some of this you learn with experience, but it never hurts to review your account policies before making a trip.

  • Carry a moneybelt. You’ll hear conflicting advice on this one, but I believe a moneybelt is cheap insurance. On our trip last summer, one member of our group had some cash in her purse when we reached London. The cash was not in her purse when we reached our hotel. (The thief had unzipped her purse, unclasped her wallet, and stolen the cash.) I had a few moments of panic in Ireland when I thought I’d lost my knapsack (which contained my credit card and some cash). Fortunately, I found the bag again, but it was nice to know that I had backups in my moneybelt.
  • Sleep cheap. My wife’s parents paid for us to stay in centrally-located hotels. This was great, but if I were traveling on the cheap, I’d explore other options. When one of my friends traveled to England a few years ago, he used The National Trust to obtain moderately-priced lodging. He loved it. Another friend kept costs down by staying in a hostel. The best way to find a cheap place to stay is to plan in advance. Research. Ask questions.
  • Eat cheap. Of course you’ll want to try good restaurants. But for many meals, you can save money by picking up food at the grocery store. We stocked up on our first day, and were able to eat light-and-easy meals throughout our trip. We didn’t have a fridge, so we purchased things that didn’t require one: fruit, crackers, etc. This food was especially handy on the days we were rushed.
  • Relax. Don’t be a slave to an agenda. Some places will be more interesting than you expected; others will be less so. For example, in England we only allocated half an our for Avebury, a prehistoric stone circle, yet I wanted to stay much longer. On the other hand, we allocated two hours for Stonehenge, but were done in twenty minutes. In retrospect, we ought to have allowed our schedule to be more fluid.

A final note: If you’re planning to travel overseas, then in the earliest planning stages, consider the exchange rate. For example, if you were currently choosing between traveling from the U.S. to either London or Argentina, you’d get the most bang for your buck from the latter. I realize there are other considerations, but if you’re in a position to leverage the exchange rate, do so. When my wife and I took our honeymoon to Victoria, B.C., the Canadian dollar was especially weak — we lived like kings!

This article first appeared as a guest post at Free Money Finance in a slightly different format.

This article is about Hints and Tips, Travel  Tuesday, 15th January 2008 (by J.D. Roth)