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Overspending on a holiday is perhaps one of the most common problems that we face, no matter how well we plan for the trip.

Having fun while vacationing is great but what about those times when you fall short of cash towards the end of your journey? Or maybe regret having spent those extra pennies, after coming back home and checking your bills?

What makes us exceed our travel budget, after all? Here are some of the possible reasons.

1. Difference in currency value: This becomes crucial especially if you are visiting a place whose currency value is lower than the Indian rupee. Many might have the tendency to avoid monetary calculations when travelling, which, in turn, can trick one into believing that he or she has more money to spend, when abroad, Klaus Wertenbroch, marketing professor at INSEAD business school’s Singapore campus, was quoted as saying by BBC.

2. Malleable mental accounting: Sometimes, travellers are seen to be setting what Esta Shah, marketing professor, University of Cincinnati, calls ”unrealistic budgets” that are either too low or way too high. This happens due to ”malleable mental accounting” whereby one mentally justifies spending based on existing circumstances, rather than restricting oneself to a controlled budget. “Your budgets are not as good as you think they are–things fall apart based on your motivations,” said Shah.

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3. Influence of a now-or-never situation: The fear of missing out is something that travel thrives on. Besides, one often feels pressed for time which is only natural, given our hectic daily schedules. On such occasions, travel expenditure can also be effected, said Deepak Chhabra, associate professor at Arizona State University, who specialises on tourism. “You are viewing life from a short-term perspective and can get carried away,” he said.


According to Shah, one of the options to avoid increased spending is by treating a holiday like daily life.

Also, while making travel bookings in advance is always recommended, Shah suggested that the payments should be made within a short period of time. Incurring expenses over a few months bears the risk of making one lose track of the total amount spent.