Travel Travel Budgeting & Financial Planning 5 — Questions and Answers
Question 1: You have $3,000 for a 10-day trip. After booking flights ($600) and accommodation ($900), what daily budget remains for food, activities, and transport?
- $120/day
- $150/day (Correct answer)
- $180/day
- $200/day
Correct answer: $150/day
$3,000 - $600 - $900 = $1,500 remaining ÷ 10 days = $150 per day.
Question 2: Which type of travel insurance add-on specifically reimburses you if you must cancel a trip for ANY reason, not just covered reasons like illness?
- Cancel for Medical Reasons (CFMR)
- Cancel for Any Reason (CFAR) (Correct answer)
- Trip Interruption Coverage
- Supplier Default Protection
Correct answer: Cancel for Any Reason (CFAR)
Cancel for Any Reason (CFAR) is the most flexible — and most expensive — cancellation coverage, reimbursing 50–75% regardless of why you cancel.
Question 3: A traveler is deciding between staying in an Airbnb with a kitchen ($90/night) vs. a hotel ($75/night). If cooking saves $40/day in meals versus eating out, which is financially better over 7 nights?
- Hotel is cheaper by $105
- Airbnb is cheaper by $175 (Correct answer)
- They cost the same
- Airbnb is cheaper by $70
Correct answer: Airbnb is cheaper by $175
Airbnb costs $105 more in lodging (7×$15) but saves $280 in meals (7×$40), netting $175 in savings over the hotel option.
Question 4: What is the primary financial advantage of booking 'refundable' flights and hotels even when they cost more upfront?
- They always include travel insurance automatically
- They protect you from losing money if plans change (Correct answer)
- They earn more frequent flyer miles
- They guarantee the lowest price available
Correct answer: They protect you from losing money if plans change
Refundable bookings act as financial insurance — the premium you pay upfront protects the full amount if circumstances force a change.
Question 5: Which of these is the LEAST recommended way to access local currency abroad?
- Withdrawing from an international ATM with a low-fee debit card
- Using a no-foreign-transaction-fee credit card for purchases
- Exchanging currency at airport currency exchange kiosks (Correct answer)
- Using a travel-specific prepaid card loaded before departure
Correct answer: Exchanging currency at airport currency exchange kiosks
Airport currency exchange kiosks typically offer the worst exchange rates and highest fees of any option available to travelers.
Question 6: You're planning a trip to Europe and the euro is currently strong against the dollar. Which budgeting approach best addresses this?
- Delay the trip and hope exchange rates improve
- Build a 10–15% currency buffer into your total budget (Correct answer)
- Only spend US dollars and refuse local currency
- Book everything in advance with fixed USD prices where possible
Correct answer: Build a 10–15% currency buffer into your total budget
Adding a 10–15% currency buffer to your budget accounts for unfavorable rate movements without canceling or drastically altering your plans.
Question 7: A traveler pays $200 for a flight, which is then canceled. The airline offers a travel voucher for $200 or a cash refund of $200. From a financial planning perspective, which is generally better?
- The travel voucher, because it often comes with bonus value
- The cash refund, because it preserves financial flexibility (Correct answer)
- They are always equivalent in value
- The voucher, because cash refunds take too long to process
Correct answer: The cash refund, because it preserves financial flexibility
Cash refunds are almost always preferable — vouchers restrict your money to one airline, may expire, and reduce your financial flexibility.
Travel Travel Budgeting & Financial Planning 5
You have $3,000 for a 10-day trip.
After booking flights ($600) and accommodation ($900), what daily budget remains for food, activities, and transport?