economics 101: never pay for accommodation

In the late summer of 2007 Jessie and I set off on our first true road trip. We called it our West Coast “Epic” Road Trip, and epic it was. During the span of two months we covered the whole western coast of the US, from Vancouver down to San Diego. What was so special about this trip, though, was that we did it very, very cheap.

First off, since Jessie had finished her job and I my Master’s degree just a few months earlier, we had plenty of time to work with. So instead of booking our airplane tickets the conventional way, we used standby tickets which cost us $75 each. Our flight was scheduled to go from Detroit to Seattle by way of Newark. Yet when we got to Newark the airline employee informed us that they were very backed up and we wouldn’t be able to make it onto any flights that night or the next day. Luckily, with standby tickets we were able to change our destination without any penalties. We switched our city to Portland, which had two dozen available seats first thing in the morning. Then we found a quiet corner, pushed two benches together and tried to get some shuteye while we waited.

Once we made it to Portland, I called up the rental car company and told them about our change. They switched the port of origin for us. When I originally booked I’d selected a compact car because it was the cheapest. We were planning on picking it up in Seattle and dropping it off in San Diego, so we had to pay a fee for this on top of the 6-week rental fee. Even so, at $1,300 this was the most expensive part of our trip. An added benefit of flying into Portland, though, was that the rental companies didn’t keep many cars there because of the lower volume of customers. All the compacts had already been rented out, so they asked if I’d accept a free upgrade to a Jeep Liberty. Ah, let me think about this one for a second. Yeah!

Throughout the whole road trip, when we weren’t staying with friends, we’d drive until it was getting late, then stop in a big city and find a 24-hour supermarket. We’d park in the back of the lot, far away from the store. Often we’d see trailers parked up as well. Cramming our toothbrushes and hand towels into our pockets, we’d go in and wander though the aisles, sometimes finding a nighttime snack or breakfast for the morning. Then after hitting up the bathroom, we’d head back to the Jeep to convert it into our hotel. Front seats went all the way forward with bags piled high. Back seats folded down flat. Extra baggage got pushed to the sides. Sleeping bags and pillows went down the center. The doors were locked and we settled in for a rest.

Several times we couldn’t find a 24-hour, or the parking lot had a “no overnight parking” sign, so we found a strip mall to park in. Once, in a small town in Oregon, we drove into a residential area, pulled up to the curb in front of a house and slept there. We also stayed at several campgrounds along the way. Some of the national and state parks have alternate “primitive” campsites further out in the wild where you can stay for free or a fraction of the cost. Just drive in and use the showers on the way out the next morning. If your goal is a free place to lay your head, who needs that campground atmosphere anyway? And of course, there are always the interstate highway rest areas, although these can somewhat scary in certain areas. In more remote places of the country you can even get away with pulling to the side of the road and pitching a tent. We did this a couple times when we were touring the south island of New Zealand a couple years ago.

All in all, a parked car just looks like a parked car. As long as it’s in a legal zone there’s no reason for anyone to suspect that someone’s sleeping in there. The point is: look for creative ways to save money when you’re traveling. If you splurge a little to get a more spacious automobile, you might not have to pay accommodation costs at all. I estimate that for the 14 or so days that we slept in our car we saved about $1,000 by skipping the hotels.

West Coast Jeep picstitch

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economics 200: how we travel hacked three flights

For the last couple years Jessie and I have made it a mission to learn all we can about travel hacking. If you’re like us, you don’t have the bankroll to afford being constantly on the move or flying all over the world every year. But with travel hacking, you can!

Ask yourself this: if you could vacation anywhere this year, and money wasn’t an issue, where would you go? Peru? Thailand? Paris? No matter what your answer is (unless you picked somewhere ridiculous like Mars), you can do it! I learned about travel hacking two years ago and I’ve already saved thousands of dollars with very little upfront costs.

Originally we found out about travel hacking through a website called The Art of Nonconformity owned by a front runner in this field, Chris Guillebeau. He has an ebook called Frequent Flyer Master highlighting all the facets of travel hacking. It sells for $49. Quite expensive, I know, but the savings we’ve gotten from applying the information has made it well worth the cost. Plus, the book comes with a 25,000 mile or your money back guarantee. It’s true that you can find all the information for free on the web, but you’ll have to do a lot of searching. Chris’ book pretty much has it all in one place. You can check it out here!

One of the biggest misconceptions about frequent flyer miles is that you have to fly a lot to accrue enough miles to actually use them.  In truth, the greatest portion of my miles have come from opening up credit cards with huge rewards. I’m always keeping my eyes open for high mileage payouts. For instance, right now two great deals are going on. 1) Delta is offering 50,000 miles for signing up for their AMEX card. The catch is you have to spend $1,000 on the card within the first three months. I’ve linked to this deal here. 2) U.S. Airways is offering 30,000 miles on their Premier World MasterCard for making just one purchase. The catch with this one is the annual fee of $89 isn’t waived for the first year. I’ve provided the link to this one here. (The website says 40,000 miles, but 10,000 is only available if you make a substantial transfer balance to the card!)

***Important!: Before you open the credit card make sure you’ve gone to the airline’s website and signed up for a frequent flyer account. It’s free. Once you sign up they’ll give you a member number, which you can enter in the application for the credit card. You need to do this in order to get your miles!***

If you keep your eyes open you can get some really great deals just about any time of the year. The first card we got was the CitiBank AAdvantage VISA. We applied mid-December 2011 on a promo in which we earned 45,000 miles and also $150 spending money. The terms: 1) spend $1,000 within the first three months to get 40,000 miles, and 2) add an authorized user to your account to receive 5,000 miles. I signed up for an account and Jessie signed up for a separate one. Then we added each other later as authorized users. Most people living at home easily spend $500 a month on rent/mortgage, food, gas, gifts, car payments and insurance. But we don’t use credit cards very much when we’re not in America, so we asked around to our family and friends if anyone was about to make a big purchase. It just happened that some friends were buying flights from New Zealand to Canada. They put the money in our account and we bought the tickets on our cards. And just like that, for very little effort, we had 90,000 miles between us.

In case you’re new to mileage programs, 90,000 miles is more than enough to get one person a roundtrip to anywhere in the world flying coach. We used those miles to fly home from Thailand to Chicago on American Airline’s partner, Cathay Pacific Airlines, which is consistently ranked in the top 10 airlines of the world. That trip, even on a budget airline, would have cost us at least $2000 for two people. Instead, we paid $50 in phone booking fees and $325 for airport taxes (unfortunately these aren’t included in reward flights). That’s right, we saved at least $1600! AND, we scheduled a free 17-hour stopover in Hong Kong on the way, which was a great amount of time to get a nice taste of the city!

We applied for the Chase United Mileage Plus VISA at the end of December 2012 . For this card, we received 40,000 miles after $500 of purchases. We’ve already used our miles to book a flight from Kathmandu to London, and then a second flight a month later from Krakow to Detroit, in the fall of this year. These tickets would have cost us over $2500 to purchase. The total amount we spent: $247. That’s literally 1/10 the price.

The mileage credit cards usually have an annual fee, which they waive for the first year. Since we don’t use our cards much, we call up the companies after 11 months and ask to cancel them. CitiBank wanted to keep us bad enough that they deposited $89 into our accounts to offset the annual fee! They also gave us a mileage multiplier opportunity!

Many people have said to me that they don’t trust themselves with credit cards. Fine! Get an accountability partner you trust, spend the minimum amount you need to make the miles, pay the credit back immediately and cut the card up! Another thing I hear people say is they don’t want to destroy their credit by having too many cards. Since we’ve taken our cards out our credit score has improved by 50 points. As long as you make the minimum monthly payments on time or keep the balance at zero you build trust with the card companies. And if you can keep ahold of the card for a year or two it shows you are responsible, whether you use it or not.

Besides credit cards there are many other ways to make miles. I’ve tried a good handful of them. Every mileage program seems to have a legitimate survey site where you get paid in miles for taking surveys. I made 500 miles on American Airlines in 3 weeks. Another way to earn miles is to purchase things you already buy online through the airline’s website. I purchased an electric razor from drugstore.com for $50, but first I clicked through to the drugstore from American Airline’s shopping site. Because of this, I earned quadruple (200 miles). I also receive emails every once in a while that ask me to do some quick task in exchange for miles. (The best was to “Like” the company on Facebook for 250 miles!) And there are many, many more opportunities.

I hope this explains enough to get you started on that dream vacation! If you have any questions the comments section is open. Happy hacking!

A cloudy night on our free 17-hour stopover in Hong Kong

A cloudy night on our free 17-hour stopover in Hong Kong