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As the weather warms up, it's the perfect time for group travel plans to take shape. And while coordinating a family vacation or getaway with friends should be fun, the question of who pays for what can add stress to what should be a good time.
CNBC Select gives you some tips below on how to plan your budget and split your expenses when traveling with a group. That way, you can avoid unnecessary financial strain and focus on enjoying your travels.
Figure out your costs
Establishing clear communication with everyone in the group about the trip's details goes a long way toward avoiding arguments when you're out and about. Whether in person or through email or text, have a candid conversation as a group about the following:
- What are the main transportation expenses for the trip?
- How much will accommodations cost?
- What group activities or experiences does each person prioritize? Are there any in particular that some group members are willing to pay more for, while others are not as interested in?
- How will expenses be tracked and paid for during the trip (cash, credit cards, payment apps)?
Once everyone in your group agrees with the trip details, it should be fairly simple to start calculating the cost of everything (i.e., flights, accommodations, group activities, etc.). This way, you can start creating a realistic budget for the group's shared expenses. If some group members don't feel comfortable with the cost of the trip, everyone can take some time to reassess the budget and see if there are any compromises that can be made to lower some costs.
If you're flying and it comes time to book your travel, you can do yourself a favor by using a credit card that earns you perks, like miles or points toward future travel. TheChase Sapphire Preferred® Cardis a popular choice among those looking for travel-focused rewards and a lofty welcome bonus. Cardholders can earn 60,000 bonus points after they spend $4,000 on purchases in the first three months after opening an account — that works out to $750 when you redeem your points for travel through Chase Travel℠.
Chase Sapphire Preferred® Card
On Chase's secure site
Rewards
Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases, and $50 annual Chase Travel Hotel Credit, plus more.
Welcome bonus
Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Travel℠.
Annual fee
$95
Intro APR
None
Regular APR
21.49% - 28.49% variable on purchases and balance transfers
Balance transfer fee
Either $5 or 5% of the amount of each transfer, whichever is greater
Foreign transaction fee
None
Credit needed
Excellent/Good
Terms apply.
Read our Chase Sapphire Preferred® Card review.
Find a way to split the expenses that's fair for everyone
Once you've agreed on a budget, your group can start to think about how these expenses can be split. Here are some recommended ways to approach this.
Dividing everything evenly vs. pay as you go
The simplest method is to split all expenses evenly among the group members. Although this approach requires the least amount of thought, it may not work well if members' personal budgets or activity preferences are wildly different from each other. For example, if you have a friend who insists on flying first class while the rest are happy in economy, then dividing airfare up evenly isn't fair for most of the group.
Again, this is where clear communication and compromises can help smooth things over. Determine as a group which of the trip's expenses can be split evenly for simplicity's sake, and which ones require a "pay as you go" method where each person shoulders the individual cost of their ticket, meal, etc. You can also adopt a "round robin" approach where each person takes turns covering the cost of one group activity during the trip. The important thing is for everyone to feel heard and to agree on the spending plan.
Assigning people a spending category
The group can also divide expenses by spending category. It requires more planning and coordination but can potentially reduce the overall cost of the trip.
While traveling, individuals may have credit cards that offer more bonus points for different categories. For instance, one person's card could earn more reward points for hotel bookings, while someone else's card earns more for dining out. By assigning each category of expenses to the respective credit card that offers the most points for that, the group can maximize the total rewards earned.
TheCapital One Venture Rewards Credit Card, for instance, offerssome of the highest rewards for booking hotel stays: cardholders can earn 5X miles on hotels (as well as rental cars) through Capital One Travel. TheBlue Cash Preferred® Card from American Express, on the other hand, lets you earn up to 6% cash back* at U.S. supermarkets on up to $6,000 per year in purchases (then 1%) thereafter and 3% cash back* at U.S. gas stations, making it a great fit for group road trips or for Airbnb stays where you plan to cook most of your meals. Terms apply.
Capital One Venture Rewards Credit Card
Learn More
Rewards
5X miles on hotels, vacation rentals and rental cars booked through Capital One Travel, 2X miles per dollar on every other purchase
Welcome bonus
Enjoy a one-time bonus of 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, equal to $750 in travel
Annual fee
$95
Intro APR
N/A for purchases and balance transfers
Regular APR
19.99% - 29.99% variable
Balance transfer fee
$0at the Transfer APR, 4% of the amount of each transferred balance that posts to your account at a promotional APR that Capital One may offer to you
Foreign transaction fee
None
Credit needed
Excellent/Good
Terms apply.
There are a few pitfalls to consider with this approach. It could lead to inequities in spending, as some group members may not have credit cards that offer bonus points for specific categories. If only a few people are responsible for the majority of the expenses, you'll want to have a discussion about paying the cardholders back some of the money they've spent.
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Use your apps
No matter how you decide to split expenses, using an app can simplify the process. Popular apps for sending and requesting money from others include Venmo and Zelle.
Venmo is a digital payment platform that lets you send money to your friends, provided you've connected a bank account to the platform. Another app called Splitwise lets you easily log individual expenses and keep track of who owes whom for the entire trip. It also integrates with Venmo, so when it comes time to settle up you can easily get the money to where it belongs.
If you want to avoid using a third-party app to send money to friends, opt for Zelle since you can sign up for it straight from most mobile banking apps and send money without having to open a different app.
App-based splitting can be especially helpful for complex trips where there are a lot of different costs and many people involved. But if you stick to a traditional paper-and-pencil or spreadsheet approach, you should designate one or two group members to monitor expenses and coordinate payments at the end of the trip.
Bottom line
There are many ways to make a group trip more enjoyable for everyone. To ensure a stress-free trip, think through money matters ahead of time, establish a realistic budget, and agree on a strategy to split expenses.
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* Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.