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I Wish I Knew This Cheaper Plane Ticket Trick Earlier

I Wish I Knew This Cheaper Plane Ticket Trick Earlier

Scoring the best airfare prices goes well beyond booking nearly a year in advance. If you use a “fake location” to buy your ticket, you could potentially get a much lower price. In Erica Ho’s article “Use A “Fake” Location to Get Cheaper Plane Tickets,” she let’s us in on this impressive airfare reduction strategy!

Use Point-of-Sale For Your Advantage

As it turns out, the same ticket that costs maybe $300 if you buy it from New York, costs $30 dollars if you buy it in Bangkok. Same ticket, but the only difference is the location you are purchasing it from or, a fancy way to say it, its “point-of-sale.” Ho managed to pay only $371 for a flight from New York to Colombia that was originally costing her more than $500.

Using the Trick for a Flight from Cartagena to Bogotá (Domestic Flight In Colombia)

Using travel search engines like Kayak, Skyscanner and Google ITA, Ho compared the prices of flights from large airlines LAN Airlines and Avianca. All travel search engines take a US-centric approach and displayed the cheapest LAN flight as $116 and the cheapest Avianca flight as $137. This is when Ho changed her point-of-sale.

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How to use Google ITA’s “Matrix Airfare Search” to change the point-of-sale:

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    Changing Point-of-Sale on Google ITS (image courtesy of maphappy.org)

    In this case, changing the point-of-sale can only be done using Google ITA. Ho changed her point-of-sale from New York City to Colombia, because she wanted her airfare to be in Colombian pesos, but you can change your point-of-sale to any place in the world (depending on whether you can get a cheaper rate from there).
    Remember, the departure and arrival location is fixed regardless of what your point-of-sale is.

    Here’s the price after changing the sale city to one in Colombia:

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    posgoogleitacop-mh
      Colombian Peso price (image courtesy maphappy.org)

      Now the cheapest flight from LAN is 173,820 COP ($91.96) and the cheapest flight from Avianca is 116,280 COP ($61.59). Just by changing the point-of-sale, you can save $74.41 on the Avianca flight and $22.04 on the LAN flight.

      How to buy the tickets on the airline’s website:

      posaviancachange-mh
        Where To Change Your Point-of-Sale on the Avianca Site (image courtesy maphappy.org)

        This price comparison proves that you can potentially buy a cheaper ticket from Colombia than you can from the US. But you can’t buy this cheaper ticket directly from a travel search engine like Google ITA. You’re going to have to buy it from the airline’s website.

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        One of the ways to change your point-of-sale on the airline website is to change your site location to Colombia but keep the site language English. Sometimes the website changes the language automatically, so you’ll probably have to either improve language comprehension or load Google Translate. You can also use a VPN approach – by changing your IP address to trick the website into believing you are purchasing from a computer within the country.

        posaviancaairfare-mh
          Avianca website prices in Colombian pesso (image courtesy of maphappy.org)

          You may not get the exact price you saw on Google ITA, but Ho assures that she almost always saves some money when she changes the point-of-sale. To save a maximum amount of money, it’s important that you use a credit card that doesn’t charge foreign currency conversion fees when purchasing your ticket.

          Even if you use a credit card that does charge currency conversion fees, though, the standard foreign transaction fee usually sums up to be around 3% surcharge, which in this case would only cost an extra $2.16. Not a bad price to pay for the overall savings!

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          Tips & Things to Keep In Mind:

          1. The best point-of-sales are the country the airline is based in and the country of destination (especially in the case of international flights).

          2. Sometimes airline websites may revert prices back to those of your original point-of-sale when you use your credit card. This differs from website to website.

          3. Sometimes airline tickets purchased from your home country also charge you the required visa and entry/exit fees, which may not be included in the ticket you purchase as a “resident.”

          4. There are some airlines that charge the same for local and foreign residents, so be on the lookout for those!

          Using this trick, you can save as little as $7 to more than $100! It doesn’t hurt to try changing your point-of-sale next time you’re buying airline tickets. And with that $7 saved, you could go ahead and buy an extra snack at your destination.

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          Last Updated on September 2, 2020

          How to Set Financial Goals and Actually Meet Them

          How to Set Financial Goals and Actually Meet Them

          Personal finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. That’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

          In this article, we will explore ways to set financial goals and actually meet them with ease.

          4 Steps to Setting Financial Goals

          Though setting financial goals might seem to be a daunting task, if one has the will and clarity of thought, it is rather easy. Try using these steps to get you started.

          1. Be Clear About the Objectives

          Any goal without a clear objective is nothing more than a pipe dream, and this couldn’t be more true for financial matters.

          It is often said that savings is nothing but deferred consumption. Therefore, if you are saving today, then you should be crystal clear about what it’s for. It could be anything, including your child’s education, retirement, marriage, that dream vacation, fancy car, etc.

          Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives that you foresee in the future and put a value to each.

          2. Keep Goals Realistic

          It’s good to be an optimistic person but being a Pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going beyond what you can realistically achieve will definitely hurt your chances of making meaningful progress.

          It’s important that you keep your goals realistic, as it will help you stay the course and keep you motivated throughout the journey.

          3. Account for Inflation

          Ronald Reagan once said: “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.” This quote sums up what inflation could do your financial goals.

          Therefore, account for inflation[1] whenever you are putting a monetary value to a financial objective that is far into the future.

          For example, if one of your financial goal is your son’s college education, which is 15 years from now, then inflation would increase the monetary burden by more than 50% if inflation is a mere 3%. Always account for this to avoid falling short of your goals.

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          4. Short Term Vs Long Term

          Just like every calorie is not the same, the approach to achieving every financial goal will not be the same. It’s important to bifurcate goals into short-term and long-term.

          As a rule of thumb, any financial goal that is due in next 3 years should be termed as a short-term goal. Any longer duration goals are to be classified as long-term goals. This bifurcation of goals into short-term vs long-term will help in choosing the right investment instrument to achieve them.

          By now, you should be ready with your list of financial goals. Now, it’s time to go all out and achieve them.

          How to Achieve Your Financial Goals

          Whenever we talk about chasing any financial goal, it is usually a two-step process:

          • Ensuring healthy savings
          • Making smart investments

          You will need to save enough and invest those savings wisely so that they grow over a period of time to help you achieve goals.

          Ensuring Healthy Savings

          Self-realization is the best form of realization, and unless you decide what your current financial position is, you aren’t heading anywhere.

          This is the focal point from where you start your journey of achieving financial goals.

          1. Track Expenses

          The first and the foremost thing to be done is to track your spending. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you will be surprised by how small expenses add up to a sizable amount.

          Also categorize those expenses into different buckets so that you know which bucket is eating most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pumping up your savings rate.

          If you’re not sure where to start when tracking expenses, this article may be able to help.

          2. Pay Yourself First

          Generally, savings come after all the expenses have been taken care of. This is a classic mistake when setting financial goals. We pay ourselves last!

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          Ideally, this should be planned upside down. We should be paying ourselves first and then to the world, i.e. we should be taking out the planned saving amount first and manage all the expenses from the rest.

          The best way to actually implement this is to put the savings on automatic mode, i.e. money flowing automatically into different financial instruments (mutual funds, retirement accounts, etc) every month.

          Taking the automatic route will help release some control and compel us to manage what’s left, increasing the savings rate.

          3. Make a Plan and Vow to Stick With It

          Learning to create a budget is the best way to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be organized

          Nowadays, several money management apps can help you do this automatically.

          At first, you may not be able to stick to your plans completely, but don’t let that become a reason why you stop budgeting entirely.

          Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options, and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

          You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

          4. Make Savings a Habit and Not a Goal

          In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that, in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

          Make savings a habit rather than a goal. While it might seem to be counterintuitive to many, there are some deft ways of doing it. For example:

          • Always eat out (if at all) during weekdays rather than weekends. Weekends are more expensive.
          • If you are a travel buff, try to travel during off-season. You’ll spend significantly less.
          • If you go shopping, always look out for coupons and see where can you get the best deal.

          The key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice, which will be harder to sustain over a period of time.

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          5. Talk About It

          Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission.

          Therefore, in order to stay the course, surround yourself with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

          6. Maintain a Journal

          For some people, writing helps a great deal in making sure that they achieve what they plan.

          If you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

          When you have a written commitment on paper, you are going to feel more energized to follow the plan and stick to it. Moreover, it is going to be a lot easier for you to track your progress.

          Making Smart Investments

          Savings by themselves don’t take anyone too far. However, savings, when invested wisely, can do wonders.

          1. Consult a Financial Advisor

          Investment doesn’t come naturally to most of us, so it’s wise to consult a financial advisor.

          Talk to him/her about your financial goals and savings, and then seek advice for the best investment instruments to achieve your goals.

          2. Choose Your Investment Instrument Wisely

          Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about the common ones, like a savings account, Roth IRA, and others.

          Just like “no one is born a criminal,” no investment instrument is bad or good. It is the application of that instrument that makes all the difference[2].

          As a general rule, for all your short-term financial goals, choose an investment instrument that has debt nature, for example fixed deposits, debt mutual funds, etc. The reason for going for debt instruments is that chances of capital loss is less compared to equity instruments.

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          3. Compounding Is the Eighth Wonder

          Einstein once remarked about compounding:

          “Compound interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.”

          Use compound interest when setting financial goals

            Make friends with this wonder kid. The sooner you become friends with it, the quicker you will reach closer to your financial goals.

            Start saving early so that time is on your side to help you bear the fruits of compounding.

            4. Measure, Measure, Measure

            All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments and taking stock of how our investments are doing.

            If we don’t measure progress at the right times, we are shooting in the dark. We won’t know if our saving rate is appropriate or not, whether the financial advisor is doing a decent job, or whether we are moving closer to our target.

            Measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

            The Bottom Line

            Managing your extra money to achieve your short and long-term financial goals

            and live a debt-free life is doable for anyone who is willing to put in the time and effort. Use the tips above to get you started on your path to setting financial goals.

            More Tips on Financial Goals

            Featured photo credit: Micheile Henderson via unsplash.com

            Reference

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