why do we spend more when we travel

Why Do We Spend More When We Travel?

Travelling has become an annual must-have experience for many people. After working hard across the year, we want to enjoy ourselves when we finally take a holiday. Many of us have been stuck within our borders for more than two years. As more borders are opening, we are seeing a surge in demand for people renewing their passports. We tend to spend more while travelling. So before we pack up and leave for our destination, let’s visit the combination of reasons why we spend more when we travel and how can we combat overspending.

Singapore Outbound Travel Statistics

In a 2016 study by Visa, Singapore is estimated to be the 7th highest spender on overseas travel. In the last household expenditure survey in 2018, Singapore households spent an average of S$4,080 annually, a 30% increase as compared to the last survey 5 years ago.

Before Covid, Singaporeans took the top spot in the number of international trips in the Asia Pacific region.

Country Average Number Of Trips Over 2 Years
Singapore 6.62
China 5.81
Thailand 5.72
Malaysia 5.08
Hong Kong 5.02

Covid has impeded travel for the last two years and the number of Singapore residents travelling out dropped from 10.7 million in 2019 to 1.54 million in 2020.

Currency Conversion

When we spend in the currency we are used to (e.g. SGD), we know exactly how much we are spending. We can easily relate prices to our salary, bank balances and budgets. If we see items that are cheaper or more expensive than normal, we can identify them easily as we should know how much things should cost in our home country.

If you are unable to do what is mentioned above as you are less price-sensitive, you will fare even worse when you have to do currency conversion.

However, when we deal with a foreign currency, unless we are a math genius, we won’t be able to do conversions accurately on the fly. Most of us will just pick a whole number to divide or multiply to get back to our local currency. We will just have an agar agar amount on how much that thing costs. Across the entire trip, every inaccurate rounding can be significant.

The cost of living is also different between countries and this makes it hard to make a direct comparison if we are getting a good deal when we are making a purchase.

Cashless Payments

The world is moving towards cashless payments. My friend recently went to Australia and his expenditure was 100% cashless. When we can’t see the money going out, we also tend to spend more. When we spend using physical cash, we can feel the money and also see the money balance depleting in our wallets.

However, when we spend using cashless methods, unless we consciously keep track of how much we are spending, spending by just tapping our phones or cards reduces the pain of paying. We don’t have to wait for change or handle cash, making spending easier and reducing the association with cash. Consumers may be willing to spend more when paying via cashless methods as compared to physical cash as it is so seamless.

Credit Payments

There are specific credit cards that reward spenders with bonus points, cashback and miles when spending overseas. If we are frequent travellers, we would benefit greatly from such credit cards. However, paying via credit can make us more willing to spend more. This phenomenon is not exclusive to overseas spending. Also, if we justify spending more overseas with the potential rewards we will get, it will make our calculations and tracking of our spending even more complicated, potentially increasing our expenditure.

Paying via credit cards makes increases the price of everything, but by avoiding paying via credit, we will lose out on the potential rewards.

Holiday Mood

When travelling for leisure, the purpose is to relax, recharge and have fun. There is an “inhibition switch” that is turned off once we travel. The troubles at home (work, debt, commitments) are temporarily set aside and our focus is on leisure. We think of short term enjoyment when we are travelling while we think of long term commitments in our daily lives.

What is the point of putting in the effort and money for the trip, then tracking every dollar we are spending while travelling? It’s like deciding to go to a fast food place but choosing to eat a salad. We will then rationalize that it is okay to overspend. The time and energy we have during the trip are limited so we don’t want to spend too much of these resources controlling our budget.

We might think twice about going to an S$80 buffet in Singapore but when travelling, some of us wouldn’t even blink an eye. The standard of the local option won’t necessarily lose to the overseas option but we are just more willing to spend while travelling.

If we have some cash leftover during the last day, some of us will just finish it as we don’t want to bring back the foreign currency. Also, we already budgeted the amount to spend, we might have the mental accounting that it is ok to spend it all. Some of us treat converted currency as already spent and are lazy to convert it back.

The S$1 leftover in our budget is the same S$1 in our daily lives. We shouldn’t recklessly spend just because we are on a trip. We shouldn’t spend just for the sake of spending just because we don’t want to bring change back home.

For The Gram

Sharing our lifestyle on social media is very common nowadays. Even though it is not a competition for many of us, we still want to take “social media worthy” photos and videos to post. I believe/hope that this is the minority but there are people who spend to try to keep up with their peers on social media.

Those that are active in posting on social media, will also look for instagrammable moments or destinations during trips. These moments or destinations can be expensive or out of the way, which means we will spend more on transport to reach these places.

When considering where to go, whether that activity is suitable for posting might also be taken into consideration. A value is placed on the “instagrammable factor” on top of the usual criteria like quality, reviews, taste and price etc. This might also make it more “worth it” to spend slightly more if that activity is just because it is instagrammable.


Many of us have not travelled for the past two years or so. Some of us have a budget for travelling during pre-covid years. Since we are unable to travel, some of us might rationalize that this budget could be allocated to other budgets (e.g. entertainment, food, online shopping) to make up for the loss of enjoyment.

Now, when more borders start opening, planning for travel can start. However, it is easy to forget that we have spent some of our travel budget on other areas already. In our mental accounting, we have not travelled for two years. Including this year’s budget, we have three years of travel budget to go for a 1 x good one. If we spend less than 3 x our budget (e.g. 2 – 2.5 x), we might even psycho ourselves that we are saving money. Two years of not travelling might result in rationalizing in going to a further destination. A further destination and a bigger budget will lead to overspending. We have conveniently forgotten that we have already spent some or all of that budget in previous years.

Strategies To Combat Overspending

Here are some tips to help prevent yourself from going over budget while travelling.

Do Our Homework

Even before deciding on a destination, we will need to consider if that location’s cost of living is within our budget. Even if we don’t look for specific stores to patronize, researching a general area that can fit our budget will be helpful. Typically we don’t want to spend too much time and effort comparing between stores so doing our homework is essential. We can look at Google Maps to check the cost and reviews to that we don’t get chopped. This can even be done every night before sightseeing. There is a useful feature in Google maps where we can save lists of self-shortlisted destinations that we would like to visit.

Without doing homework, it will be left up to chance so we might overspend or even visit a place that we will not enjoy ourselves.

Also, researching tourist traps and scams in the area can really save your wallet. I previously got scammed in Thailand where we got brought on a boat ride and dropped off at a temple without completing the itinerary. We were lucky that we only got cheated of our tour fees and remained safe.

Set A Budget

We can set an overall and daily budget so that there is less chance that we will overspend. We will also need to do our homework on how much of a budget is suitable. If our budget is set too high, we will tend to overspend while if it is too low, we will be torturing ourselves.

If we are using cash, it is very straightforward where we take a daily portion out of our total budget every day and keep to it. There are now options of pre-paid debit cards like YouTrip/Wise, setting daily limits on our cards and e-wallets. There is even a travel mode on DBS, but we will need a multi-currency account plus a visa debit card. I believe there should be similar options for the other two local banks.

We can just top up the amount we would like to spend for the day or the entire trip. This will help us in controlling our spending. We don’t have to handle cash and might also be able to gain rewards by using these cashless options. We are also able to immediately terminate or block these cards if lost and our losses are limited to the amount topped up to the card or wallet.

Round Up Instead Of Rounding Down

It is better to think that we are spending more by rounding up any currency conversion. If we round down the conversions, we will think that we are spending less than reality.

For example, if our travel destination is Japan, the current exchange rate is 1,000 JPY : 10.80 SGD. We are looking to buy a 10,000 JPY item (108.03 SGD).

If we round down to 1,000 JPY : 10 SGD, we will think that we have spent 100 SGD when the actual price is 108.03 SGD, an 8% difference.

What we can do is to either round up to 1,000 JPY : 11 SGD or just add a few dollars when using the 1,000 JPY : 10 SGD as this exchange rate is easier to convert to our local currency by dividing by 100.

Treat Yo Self (Sparingly)

If we have plans to eat somewhere premium for dinner, The budget for breakfast and lunch can be lowered accordingly. Or if we are visiting multiple cities, we can save on the first few accommodations and then spend on the premium option on the last leg of the trip. This will allow us to both control our budget while also experiencing the premium options while travelling.

Don’t Buy Unnecessary Souvenirs

Some of us might feel obligated to purchase souvenirs for our family and friends while travelling. We can treat this as a bonus instead of an obligation. If we come across something worth purchasing that our family and friends would enjoy, great! However, if we buy souvenirs just for the sake of buying, it is a waste of money, time and effort. These souvenirs will be collecting dust somewhere and thrown away during a future spring cleaning session.

If we just want to get this out of the way, we might just purchase some stuff at the airport while waiting for our flight. Since this is the last chance to purchase souvenirs plus we have leftover foreign currency, we will tend to spend without thinking about whether it is worth it or not.

Don’t Beat Yourself Up Too Much

If we go too crazy with budgeting and tracking, it can be hard to enjoy ourselves. If we are not enjoying ourselves, what’s the point of spending money on travel?

There is always a spectrum between the two extremes. We don’t have to pick between spending way over budget and being super thrifty. Depending on our circumstances, we can pick somewhere in between. This is why setting a suitable budget and doing your homework is important. As long as our spending fits within our travel budget and doesn’t interfere with our long term goals at home, we will do just fine.


More borders are opening and many of us will be looking to travel. We tend to spend more when we travel due to several reasons. There are some strategies to help curb overspending. If we utilize some of these strategies, we will be able to enjoy ourselves without overspending. Since we have already decided to travel, we shouldn’t be too hard on ourselves. That is why it is important to do our homework and set a budget for us to enjoy our holidays without overspending.

Do you tend to overspend while travelling? Do you have any tips to prevent yourself from spending over budget during a trip? Drop a comment and let us know.

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