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    Health savings accounts, with a triple tax advantage, are ‘perfect,’ advisor says — but only if used the right way

    Health savings accounts offer a three-pronged tax benefit: tax-free contributions, investment growth and withdrawals.
    Consumers should ideally invest their HSA funds, like they would a 401(k) account, for example, to allow the money to grow for future medical costs.
    Most people don’t do that; they save in cash.

    Delmaine Donson | E+ | Getty Images

    Health savings accounts offer perhaps the best tax perks relative to other investment accounts.
    But most account holders use them in a way that dilutes their benefits, data shows.

    Just 19% of HSA participants invest their account assets, according to a new survey by the Plan Sponsor Council of America, a group that represents employers. Those investments might be a stock mutual fund, for example.
    The rest park their money in cash, treating their HSA like a bank account.

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    This behavior runs counter to the advice of financial experts: to invest and grow HSA assets as a type of retirement account, like a 401(k) plan, to cover future health costs.
    “There’s a fair amount of health care you can expect to pay for in retirement, and this is simply a more efficient way to pay for it,” said Lee Baker, a certified financial planner based in Atlanta and member of CNBC’s Advisor Council.

    Why HSAs are ‘perfect’

    HSAs are tax-advantaged accounts for health expenses and are only available to consumers enrolled in a high-deductible health plan.

    They have a three-pronged tax benefit: Account contributions are tax-free, and investment growth and withdrawals are also tax-free if used for eligible medical costs.

    “An HSA is a perfect investment vehicle, if we dare say there is such an animal,” said Baker, founder and president of Apex Financial Services. “You can’t beat it under current tax law.”
    There’s a long list of health costs that qualify for HSA use. Even if used for a non-qualified expense, the account’s tax benefit is still like that of a traditional 401(k) or individual retirement account: a withdrawal would be taxed as income.
    HSAs don’t carry requirements to “use or lose” the money each year, unlike many healthcare flexible spending accounts.

    The best way to use an HSA

    The optimal way to use an HSA is by holding cash in the account equal to one’s annual insurance deductible and investing the remainder, Baker said.
    Consumers would pay for current health costs out of pocket, if possible, allowing HSA money to grow for the future. In the event consumers have a big health bill, they can use the HSA cash to cover the annual deductible, if unable to pay for it out of pocket, Baker said.
    Of course, “that’s just not the reality for everybody,” said Hattie Greenan, PSCA’s research director.

    There’s a fair amount of health care you can expect to pay for in retirement, and this is simply a more efficient way to pay for it.

    founder of Apex Financial Services

    Most people likely can’t afford to pay out of pocket for current medical bills, so continually draw from their HSAs instead of investing the assets, Greenan said.
    “If they need to tap it to pay current health expenses, they’re not using it as an investment vehicle,” she said.
    Additionally, about 40% of employers don’t even offer HSA investment options to their workers, according to the PSCA survey. They only offer cash options.
    However, there’s a workaround: Unlike with 401(k) accounts at work, employees aren’t beholden to the HSA options offered by their employers; they can open an HSA account elsewhere with a different provider to access investments. More

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    ‘Maid’ author Stephanie Land’s new book tells the story of how this homeless single mom clawed her way out of poverty

    Your Money

    While Stephanie Land’s first memoir, “Maid,” which became a best seller and then a popular Netflix series, chronicled her work cleaning houses for $9 an hour, her new book, “Class: A Memoir of Motherhood, Hunger, and Higher Education,” tells the story of how she clawed her way out of poverty and became a writer.
    A new report by the U.S. Department of Agriculture found that, like Land, more than 33% of single mothers reported food insecurity in 2022.

    Stephanie Land
    Source: Simon and Schuster

    Stephanie Land’s daughter, Emilia, was 7 months old when Land was forced to leave her volatile partner. What came next for the single mother was homelessness and food insecurity — but somehow, at the same time, Land also worked to finish her college degree and pursue a writing career.
    Her memoir, “Maid” became a best seller in 2019 and then, two years later, a popular Netflix series, chronicled Land’s work cleaning houses for $9 an hour. Her new book, “Class: A Memoir of Motherhood, Hunger, and Higher Education,” published on Nov. 7, tells the story of how she clawed her way out of poverty and became a writer — taking out nearly $50,000 in student debt to do so.

    Like Land, more than 33% of single mothers reported food insecurity in 2022, a recent report by the U.S. Department of Agriculture found.
    “The fight to make rent, eat and find child care was constant,” Land writes. “I never got a break from it.”
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    CNBC interviewed Land last month. The conversation has been edited and condensed for clarity.
    Annie Nova: I notice that whenever you’ve been faced with a big setback or problem, you don’t really have time to feel much about it. You write that immediately you have to figure out what to do.

    Stephanie Land: Yeah. There’s a line in the book that says, ‘I didn’t have the privilege to feel.’ And that extended to my daughter, too. There was just no time. I’ve had the same therapist now for five or six years, and it’s mind blowing how lacking in that kind of care I was. Just acknowledging that an experience was really hard, and taking the time to try and process it, we never had time for that. It was always, ‘Okay, we got to go.’ And I think there were many layers to it: I couldn’t get angry at the lack of government assistance programs because, you know, an angry person is often not treated very well. They’re often given fewer resources.

    Arrows pointing outwards

    Simon and Schuster

    AN: The child support you received from your daughter’s father never seemed to be enough. What problems do you have with the child support system in the U.S.?
    SL: I really struggled with the fact that they kept imputing my income at full time, but I didn’t have enough childcare to work full time. I got $40 a week, or something like that. So, it didn’t really feel helpful.
    AN: What is it like to have to be in court demanding money from someone you’ve dated?
    SL: It’s hell. There’s really no gentle way of putting it. Especially as a domestic violence survivor. When I first went to court after he kicked us out and punched out the window, the judge said in open court, ‘The question we’re presented with is if a reasonable person would feel threatened.’ And he said, ‘No.’ And so I was shown to be unreasonable. I also think I was looked down upon because I was homeless. And I had left a home that, you know, to everybody else, seemed stable. He had a full-time job, and I wasn’t working. And so I was the ‘bad parent.’ Because he hadn’t been charged with abuse or because it wasn’t visible, it was like it never happened.
    AN: For how long were you and your daughter homeless?
    SL: The first time, it was for almost six months. We moved in with my dad for a little while. That didn’t work out. And then, we got the little cabin in the homeless shelter system. We really didn’t have that much stuff. All of our main stuff that we used could fit in my car.

    You can’t really move out of homelessness if you don’t have money to pay rent.

    Stephanie Land

    And so, it was just kind of like, ‘Oh, well, we’re sleeping here now.’ I don’t think my daughter was really affected by it all that much because she was so little. My main concern was just finding a job. You can’t really move out of homelessness if you don’t have money to pay rent. But that was impossible because I didn’t have childcare.
    AN: Your daughter was so young when there wasn’t enough to eat. How did that affect her?
    SL: It was hard. It took several years for her to not be scared of new food, because as much as I tried not to be stressed about what she ate or what she didn’t eat, there was kind of this fear in her of, ‘What if I don’t like it?’ Because we couldn’t waste food. And it’s not like I had yelled or anything. But it was frustrating when your kid won’t eat, and you don’t have money to buy something else. I couldn’t make another dinner.
    AN: You wrote about getting this desire to flee, like your mother did to Europe. What do you think that fantasy was about?
    SL: I needed a break that was longer than a couple of minutes in the bathroom. As a poor woman, and a single mom, the stress we have of not being able to feed and house ourselves, they’ve documented how much of a toll that takes on your body. Cognitively, it lowers your IQ. And it’s pretty recognizable, the amount of stress you are under. It’s constant, and you can’t get away from it. And there were times that I just really wanted to get away from it.

    AN: While you were struggling to work and raising your daughter, you were also studying literature. How did you focus on topics like Shakespeare while facing eviction?
    SL: I just had to get it done. It was homework. And when I started working as a freelancer, it was the exact same situation. I think one of the most valuable things college taught me was how to write a paper even when my life is in chaos.
    AN: You’ve published books and own a house now. What is it like to be more stable?
    SL: I still worry about everything. A weird smell, or a weird noise, and I’m nervous that everything will just disappear. But that may live with me forever. More

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    31% of millionaires say they’re part of the middle class, survey finds. ‘People feel squeezed,’ advisor explains

    Only a small share of millionaires say they feel wealthy, according to a recent report.
    Persistent inflation has taken a toll on most Americans’ financial security, making it harder to feel well off.
    What does it take to be rich? “The short answer is more,” said Jason Van de Loo, chief client officer at Edelman Financial Engines.

    Feeling “rich” is increasingly elusive.
    Even among millionaires, only 8% would characterize themselves as wealthy these days.

    Roughly 60% of investors with $1 million or more of investable assets said they are more likely upper middle class, according to a recent Ameriprise Financial survey of more than 3,000 adults.
    To that point, 31% consider themselves decidedly middle class.
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    Between persistent inflation, high interest rates and geopolitical and economic uncertainty, fewer Americans, including millionaires, feel confident about their financial standing.
    “Many people feel squeezed between higher prices and lower asset prices,” said Kim Maez, a certified financial planner and private wealth advisor at Ameriprise. “While a necessary part of the economic cycle, it’s also uncomfortable.”

    Even doctors, lawyers and other highly paid professionals — also referred to as the “regular rich” — who benefit from stable jobs, homeownership and a well-padded retirement savings account, said they don’t feel well off at all. Some even said they feel poor, according to a separate survey conducted by Bloomberg.
    Of those making more than $175,000 a year, or roughly the top 10% of tax filers, one-quarter said they were either “very poor,” “poor” or “getting by but things are tight.”
    Even a share of those making more than $500,000 and $1,000,000 said the same.
    Despite their high net worth, just 44% of all millionaires felt “very comfortable,” another report by Edelman Financial Engines found.

    What it takes to feel wealthy

    What would it take to feel wealthy?
    Jason Van de Loo, chief client officer at Edelman Financial Engines, recently told CNBC, “The short answer is more.”
    Most people said they would need $1 million in the bank, although high-net-worth individuals put the bar much higher. More than half said they would need more than $3 million, and one-third said it would take more than $5 million, Edelman Financial Engines found.
    When it comes to their salary, Americans said they would need to earn $233,000 on average to feel financially secure, according to a separate Bankrate survey. But to feel rich, they would need to earn nearly half a million a year, or $483,000, on average.
    Of course, higher costs continue to make it hard to make ends meet. Households are facing surging child-care expenses, ballooning auto loans, high mortgage rates and record rents along with the resumption of student loan payments.
    To bridge the gap, more people rely on credit cards to cover day-to-day expenses.
    In the past year, credit card debt spiked to an all-time high, while the personal savings rate fell.

    But a deterioration of the American dream has been decades in the making, according to Mark Hamrick, Bankrate’s senior economic analyst.
    “Structural or long-term changes have been injurious to Americans’ ability to manage their personal finances,” he said.
    “Where there was a time in the U.S. when a married couple, with children, could get by with a single-wage earner in the house, those days are mostly vestiges of the past.”
    Money continues to be the No. 1 source of stress among households, Van de Loo added. “The last couple of years just lit a match to those concerns.”
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    Here’s why it ‘doesn’t make financial sense’ for Americans living abroad to give up their U.S. citizenship, one expert says

    Year-end Planning

    Americans who move abroad still have a responsibility to file their taxes with the IRS.
    While giving up American citizenship to avoid paying U.S. taxes may sound like a tempting idea, experts advise against it.
    “It typically doesn’t make financial sense, and there’s a few reasons why,” said Italy-based Alex Ingrim, a financial advisor for Chase Buchanan Wealth Management.

    Alexander Spatari | Moment | Getty Images

    Americans who move abroad still have a responsibility to file their taxes with the IRS, sometimes in addition to taxes paid in their place of residence. Unsurprisingly, the thought of renouncing their U.S. citizenship may have crossed their minds at least once.
    However, experts advise against the move.

    “It typically doesn’t make financial sense, and there’s a few reasons why,” said Italy-based Alex Ingrim, a financial advisor for Chase Buchanan Wealth Management.

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    While there may be some instances where “the pain of being American” arises in the tax liability, “you’re very rarely double-taxed” as an American, Ingrim said.
    Additionally, citizenship renunciation is not an easy process and can be difficult to backtrack on if you change your mind, said certified financial planner Jude Boudreaux, a partner and senior financial planner at The Planning Center in New Orleans.
    Therefore, taxpayers looking to move abroad in the coming year may need to plan ahead of time to figure out what their tax residency will look like.

    ‘The pain of being American’

    Before you move abroad, make sure what your income situation will be: whether you will be working or will depend on retirement savings.

    “The U.S. and the country [of residence] might have an income tax treaty, it might have an estate tax treaty [or] it might have a normalization agreement, which deals with retirement income like Social Security,” said Boudreaux, a CNBC FA Council member. “It all depends on the different rules.”
    To that point, some European countries, such as Portugal, tax retirees’ streams of income, so expats’ tax liability under the double taxation agreement is to the foreign country where they reside and not the U.S., Ingrim said.

    Under such an agreement, those filing U.S. tax returns can use the credit from what was paid in the other country to extinguish their tax liability back in the States, he added. For example, if Portugal has higher tax rates, it expunges your U.S. liability.
    Similarly, if you earn Portuguese income and pay Portuguese income taxes, you will get some credits on your U.S. filing for taxes paid overseas, according to Boudreaux.
    “The pain of being American comes when you go to file … and the fact that it costs more money to file your taxes in two different countries,” he said. 

    Why American expats renounce U.S. citizenship

    Americans who end up rescinding their U.S. citizenship might do so to explore different investment options or really low tax jurisdictions, Ingrim said.
    For example: An American moves to a place with little to no taxes, like Monaco or Dubai. However, they still have the U.S. tax liability.
    “For those people, it’s a pain, and [they] opt for giving up their citizenship to avoid paying taxes,” Ingrim said.
    Others may want to explore investment options, like European mutual funds, exchange-traded funds, savings products and wealth-structuring solutions.
    However, “if you buy a mutual fund, you may end up under a really kind of negative set of tax rules,” Boudreaux said.

    Jordi Mora Igual | Moment | Getty Images

    The IRS considers these products as passive foreign investment corporations, or PFIC, and the federal agency has rules around the types of structures American taxpayers can invest in, Ingrim said.
    “The reporting is extremely onerous and costs a lot of money,” he said. “For people that are just trying to build their savings, it can be really frustrating.”
    This may especially apply to Americans making money in euros who do not want to send money back to the U.S. and invest in dollars, or if they want to reap the tax benefits some European mutual funds may offer in certain jurisdictions.
    However, despite the hefty guardrails, American citizens still have access to the U.S. financial system, which is something to consider before giving up the passport.

    U.S. financial system is ‘huge benefit to have’

    The U.S. financial system is “really is a huge benefit to have, where you can invest, trade and hold your money for almost nothing,” Ingrim said.
    Most European banks typically charge high fees for the same services and are constantly trying to sell you new products.
    “The U.S. system is more evolved, and if Americans took that view when they live abroad … they’d be a little bit happier about being American,” he added.

    Altogether, renouncing your U.S. citizenship is a much bigger process than may be necessary, Boudreaux said.
    “It’s not necessarily easy, could be a little expensive and it’s one of those things it’s kind of hard to undo once you’ve done it,” he said.
    Additionally, you might owe exit taxes as an expatriate under the Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008, Boudreaux added.
    “You can’t just expatriate and not pay taxes on things you owned in the U.S. and then went overseas,” he said, “There’s basically no way to get out of not paying U.S. taxes in one form or fashion.” More

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    IRS announces new income tax brackets for 2024

    The IRS has released higher federal tax brackets for 2024 to adjust for inflation.
    The standard deduction is increasing to $29,200 for married couples filing together and $14,600 for single taxpayers.
    There are also changes to the alternative minimum tax, estate tax exemption, earned income tax credit and flexible spending account limits, among others.

    Getty Images

    The IRS on Thursday announced higher federal income tax brackets and standard deductions for 2024.
    The agency has boosted the income thresholds for each bracket, applying to tax year 2024 for returns filed in 2025. For 2024, the top rate of 37% applies to individuals with taxable income above $609,350 and married couples filing jointly earning $731,200.

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    Federal income brackets show how much you’ll owe on each portion of your “taxable income,” calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

    Higher standard deduction

    The standard deduction will also increase in 2024, rising to $29,200 for married couples filing jointly, up from $27,700 in 2023. Single filers may claim $14,600, an increase from $13,850.

    Adjustments for other tax provisions

    The IRS also boosted figures for dozens of other provisions, such as the alternative minimum tax, a parallel system for higher earners and the estate tax exemption for wealthy families.
    There’s also a higher earned income tax credit, bumping the write-off to a maximum of $7,830 for low- to moderate-income filers. And employees can funnel $3,200 into health flexible spending accounts.
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    ‘Fear is an opportunity,’ expert says. These steps can help you use what scares you to build wealth

    Your Money

    Farnoosh Torabi, author of “A Healthy State of Panic,” says financial fear can help you build wealth if you lean into it. 
    “People who go and do that thing that presents as scary … they’ll come out of that on the other side of that road potentially more successful,” Torabi said.

    Too often, people are encouraged to be fearless, according to personal finance expert Farnoosh Torabi, but fear is a valuable tool, particularly when it comes to building wealth.
    “If you are feeling fear at life’s crossroads, pertaining to your finances, your career choices, your relationships, I think it’s important to listen to that,” said Torabi, host of the “So Money” podcast and author of “A Healthy State of Panic.”

    Torabi made her comments during CNBC’s Your Money event.
    Amid today’s persistent inflation, high interest rates, bank failures, geopolitical uncertainty and the lingering possibility of a recession, “it’s normal to fear these big ‘what ifs,'” she said. But once you distill that fear, you can use it to better your financial standing.

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    “Fear, here, is an opportunity,” Torabi said. The following two steps can help you harness fear to build wealth.

    1. Get informed about what scares you

    “People who go and do that thing that presents as scary … they’ll come out of that on the other side of that road potentially more successful,” Torabi said.
    For example, “if you are fearing investing in the stock market, maybe it’s because you are afraid to lose money, which is understandable,” Torabi said.

    “But the solution is not to not invest,” she added. “The solution is to get educated and understand that the market is volatile — but when you invest for the long run, when you are in a diversified portfolio, there’s a much higher chance of success.”
    While market downturns are inevitable, long-term investors have historically earned a nearly 10% average annual return.
    “Sometimes fear is a nudge to get more educated,” Torabi added.

    2. Play out the worst-case scenario

    Often, it’s women who feel financially insecure, according to Northwestern Mutual’s 2023 Planning and Progress Study. Women are also more likely to live paycheck to paycheck and consider themselves financially fragile, a separate report by Varo Bank found.
    Torabi, who said she’s wrestled with her own relationship with fear as a young adult, advises playing out the worst-case scenario.
    “If you are afraid of a recession, better to think about what might happen if you lost your job,” she said.

    In fact, nearly six in 10 women said they don’t have a long-term financial plan that factors for up and down economic cycles, Northwestern Mutual’s study also found. That may mean determining how to lower your expenses and build up a cash cushion so you can maintain your current lifestyle in the event of a temporary income disruption.
    “Our brain is prompted to find a lasting cure and usually that cure is to make a plan,” Torabi said. “You’ve taken this fear and you’ve used it as a tool to make a road map.” More

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    Use these 3 money tips heading into 2024, economist says

    Consumers should “economize” their budgets, pay down debt and save even a little more money to boost personal finances in 2024, said Dana Peterson, chief economist at The Conference Board.
    The Federal Reserve has raised interest rates aggressively to rein in pandemic-era inflation. That has raised borrowing costs significantly.
    However, it has also increased the rate consumers can get on their cash.

    Simpleimages | Moment | Getty Images

    Heading into 2024, consumers should “economize” their budgets, pay down debt and save money, if possible, to boost their personal finances, Dana Peterson, chief economist at The Conference Board, said Thursday at CNBC’s Your Money event.
    This “three-point action plan” is important for households since there’s “a high risk of recession” in 2024, probably in the first half of the year, Peterson said.

    However, that recession likely wouldn’t last long: It would end in the second half of the year, she estimated.

    1. Budgeting

    Consumers can “economize” by looking at their weekly budgets and trimming expenses where possible, Peterson said.
    That might include buying store-branded rather than brand-name items at the grocery store or at clothing retailers, or shifting to different types of entertainment, like streaming movies at home instead of going out to the movie theater, for example, she added.

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    Pandemic-era inflation ate into household budgets at the fastest pace in 40 years. While it has fallen significantly from its peak in summer 2022, inflation likely won’t fully retreat to its target level around 2% until sometime next year, Peterson said.
    “Everything, just about, is very expensive,” she said.

    2. Pay down debt

    The Federal Reserve has raised interest rates aggressively to rein in inflation. That has dramatically increased borrowing costs for households, for everything from mortgages to auto loans, student loans and credit card debt.

    For example, average credit card rates — known as annual percentage rate, or APR — are at all-time highs, over 20%.
    Put any extra money toward paying down debt, Peterson said. Financial experts generally recommend prioritizing the highest-interest debt first, and paying bills on time and in full each month, if possible.

    3. Save if you can

    Even if consumers don’t much disposable income to save, “every dollar counts,” Peterson said.
    For those with a 401(k) plan at work, financial advisors generally recommend first saving enough to get their full company match, which is essentially free money.

    Then, consumers might consider building an emergency fund, health savings account (if they have access at work) or individual retirement account, for example. (However, those with high-interest loans should generally prioritize paying down that debt after saving enough for their 401(k) match, experts say.)
    One benefit of high interest rates: Savers are getting higher rates on cash than they’ve seen in decades.   More

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    The ‘dupe’ trend hit travel in 2023. It’s a good way to save on your next trip, experts say

    “Dupes,” short for duplicates, was popularized as a broad consumer trend by social media platform TikTok.
    Travelers adopted the strategy of seeking out cheaper alternatives in 2023 as prices soared, and will continue to do so in 2024, experts said.
    It’s not always about flight price. In many cases, travelers can also save on hotels, food and local transportation, too, experts said.

    Klaus Vedfelt | Digitalvision | Getty Images

    Flight searches for travel ‘dupes’ increased in 2023

    Dupe is, of course, a new term that puts a spin on the old concept of bargain hunting.
    Data shows that travelers leveraged the strategy more in 2023. For example, flight searches more than doubled for several “dupe” destinations internationally, according to Expedia data.
    Searches to Taipei, a dupe for Seoul, were up 458% in the U.S. and 2,786% globally, according to Expedia. Those to Pattaya, Thailand, an alternative to Bangkok, rose 163% in the U.S. and 249% globally.

    Likewise, flight searches to the island Curaçao, a stand-in for St. Martin, were up 228% in the U.S. and 185% worldwide. Those to Perth, Australia, a dupe for Sydney, jumped 33% in the U.S. and 109% globally. Additionally, those to Liverpool, England, a London alternative, spiked 138% in the U.S. and 97% worldwide, according to Expedia.
    The data compared searches in the 12-month period through Aug. 31, 2023, to the same period the prior year.
    “TikTok popularized the idea of dupes … and the concept is increasingly taking off in the world of travel,” Expedia said in a report published Wednesday.

    Affordability is a top driver of travel dupes

    Coroimage | Moment | Getty Images

    Affordability is among the top reasons cited by consumers for seeking out these alternate destinations, Expedia said.
    “If you are looking to save money on your next trip, consider an alternate destination,” said Hayley Berg, lead economist at Hopper, a travel app. “Oftentimes you can save on airfare and hotel rates by picking a destination off the beaten track.”
    For example, the average round-trip flight from the U.S. to Hanoi, Vietnam, is $1,564. Travelers would save money by flying instead to Ho Chi Minh City, where a flight averages $1,326, Hopper said.
    In a similar vein, let’s say you’re considering a trip to Spain.
    A round-trip flight to Tenerife, in Spain’s Canary Islands, costs $827, on average. Instead, you might consider a trip to Barcelona, a popular metropolis, where a flight costs an average $572, according to Hopper. Likewise, flights to Phuket, Thailand, an island getaway, cost $1,705 round trip, while flights to the capital Bangkok cost $1,404. The Hopper prices are current averages for departures in December to March.

    In 2024, Americans are more likely to choose hidden-gem destinations over tried-and-true tourist hotspots for their vacations.

    Jon Gieselman
    president of Expedia Brands

    More Americans planned trips abroad this year as their pandemic-era health fears waned and countries largely reopened their borders to visitors. Americans applied for passports in record numbers in 2022 and 2023.
    That surging demand caused prices to surge across the travel spectrum. Airfare to Europe, the most popular destination for U.S. tourists, was the most expensive on record in summer 2023.  
    Internet search traffic in the U.S. for travel dupes spiked throughout 2023, peaking in July, according to Google Trends data.

    It’s more than just the flight price

    However, Hopper flight data indicates that not all dupes will necessarily pay off for travelers. They may need to try a few different alternatives to find savings.
    For example, the average round-trip flight from the U.S. to Perth, the aforementioned dupe for Sydney, currently costs $2,389, while a flight to Sydney costs $1,572, according to Hopper. However, travelers who look a bit farther afield — to Nadi, Fiji, or Auckland, New Zealand — would spend $1,365 and $1,394, respectively, Hopper said.
    However, dupes aren’t just about the airfare. People traveling off the beaten track can often save on food, hotels and local transportation, said Sara Rathner, travel expert at NerdWallet.

    Avoiding “way over-touristed” locales, especially if traveling during peak season, can also be a more enjoyable experience due to smaller crowds, Rathner said.
    When picking a “dupe” destination, travelers should research details such as amenities, infrastructure and safety considerations, Rathner added. Reading online travel articles and blogs, and asking friends who may have visited before, can give a general sense as to potential itineraries and the ease of lodging and getting around, she said.
    To save money on general travel, try being flexible with trip dates, Berg said. For example, flying on a Tuesday can save you $100 on domestic airfare, while departing Monday through Wednesday can save up to $150 per international ticket, Berg said.
    Hotel stays are most expensive Friday and Saturday night. Starting a stay on Sunday can save an average of 25% off weekend rates, she added.Don’t miss these stories from CNBC PRO: More