How I Decide when to Splurge and when to Conserve Miles, Points or Cash

When I first started this site years ago, I clearly stated that this is NOT a “budget travel on miles and points” blog. To be sure, many (most?) of my redemptions lean towards economy angle. However, I’m not opposed to splurging and happy to do so on occasion. Well, perhaps “happy” is not the right word, but I can say with absolute certainty that spending more miles, points or money can enhance your travel experience.

Getting out of scarcity mindset (is hard)

If you grew up poor, you know what I’m talking about. There was no such thing as eating out, travel or splurging of any kind in my family. My sister and I were happy to see a few Indian movies in the local theater, get some ice cream cones and if we were lucky, ride a few rides in a rusty Soviet amusement park during summers. Those were the days.

It took me a long time after moving to the US to finally give myself permission to spend money on fun without overthinking it. In fact, I got into this hobby because I love travel and was looking for ways to do it on the cheap. But even then I went to extremes. My first award redemption was two roundtrip tickets to Maui from Florida. Boy was I excited.

I was debating between getting a small studio in a local neighborhood for $65 per night or reserving  an oceanfront condo for $110. Naturally, I went with a former. Honestly, it worked out fine and it was quite a deal even back then. But here is the thing. We went to Maui during whale season, and I could have watched them right from the balcony of an oceanfront condo. I wanted to, but I just couldn’t justify paying an extra $45 per night.

If you have a scarcity mindset when it comes to money, it will likely carry over to miles and points. And indeed, that’s what happened to me. I used to reserve flights that left at an ungodly hour, with multiple connections, all to save a few miles. I would burn points on a hotel that was located “only” three miles from the beach rather than splurge on a beachfront resort.

It’s a work in progress, but getting older and hopefully wiser made me rethink my priorities. I’ve found out that paying extra for convenience is almost always worth it. Seeing an ocean from your room for a bit more cash is a good kind of splurge.

Twelve years ago, I took my parents on their first and only cruise in the Caribbean. It was on Carnival and we ended up sailing in the hurricane season, so the price was right. I was debating on whether I should pay an extra $300 so my parents could enjoy having a balcony. We had a lot of bills at the time, so my inclination was to save the money, but I resisted. They ended up loving the cruise and talk about it to this day. Their best memory is sitting on their own private balcony and watching the waves.

Two years ago, we paid for my relatives in Belarus to meet us in Montenegro. I ended up spending $550 (a stupid amount of money) to rent a sailing yacht for a day to explore the Bay of Kotor. What a treat for my relatives who rarely see the ocean!

The younger me would probably have a heart attack at the mere thought of dropping that kind of cash. But here I am, no regrets.

I’m a firm believer that collecting miles and points is the easy part. Spending them in the way that truly enhances your life and accomplishes your personal goals is the real challenge. There is a reason many folks stick to the usual trope of mainly focusing on maximizing CPP, CPM or whatever gives them bragging rights on Instagram.

There is nothing wrong with doing so if that’s always been your dream. But I have a hard time believing that everyone who participates in the miles and points hobby has the same travel goals. It happens, of course, and I’ve been wanting to go to Bora Bora even before I’ve discovered miles and points. So when I learned that I can actually stay at an overwater bungalow for 60k IHG points per night, it was a no-brainer (deal is now dead).

Plus, overthinking can be unhealthy. Last week one of our readers mentioned that when it comes to points, one should follow  their “Bauchgefühl” (belly feeling), as they say in German. I love that!

It’s  how I try to approach redemptions these days. If I see something that truly excites me and where using my existing points makes sense, I book it. I don’t need to maximize CPP.

That’s how I ended up using Hyatt  points on Rio Perdido resort (part of SLH), despite the fact that I only got 1.4 CPP in value. And it’s a good thing I did because Hyatt lost that partnership a few months ago. I saw it and immediately changed my plans, so we could spend one night at this special place. No regrets.

Another place I will never regret booking is Nayara Tented Camp. We actually got lucky, since I originally reserved a cheaper unit at their sister property. Even then, at $375 per night  it’s the most money I’ve ever spent on a hotel. But wow, what an experience. We got to enjoy a place that goes for $1k per night all because I was willing to splurge in the first place. Btw, if you have a healthy stash of Citi Thank You points, you can get 1.5 cents per point on this property by transferring them to Leading Hotels of the World program.

Of course, since I am a compulsive optimizer, it’s just not in my nature to throw points around without thinking first. Plus, it’s not like we have an unlimited supply of them. So, below is my thought process on when to splurge and questions I ask myself before burning miles or points.

How I approach booking flights 

1) Will I need to transfer flexible points in order to book business class?

Flexible points are basically cash to me, full stop. I’m not here to debate folks, that’s just how I look at them. Here is an example. I had the option of booking business-class award seats for me and my husband on our flight from JFK to Brussels. My SIL could sit with the kids in economy, so it was a perfect opportunity to be a bit more comfortable for seven hours. I passed and here is why.

Business class would cost me 63k Avianca miles per person compared to 22k miles in economy (the price is higher now). In order to have enough miles, I would need to transfer an additional 73k Capital One points. Or I could redeem those points towards $730 hotel bill in Bruges. I chose the latter because being uncomfortable for 7 hours is worth saving $730 ( to me). Now, I would be more than happy to spend extra for my tall husband to be comfortable. Unfortunately, he refused to sit alone and reluctantly agreed to suffer with me.

We had several financial setbacks in the last year, so $730 is nothing to sneeze at. For others with more money the juice may be worth the squeeze. But not for me.

Now let me give you another example. In 2018 my husband and I had an amazing anniversary trip exploring the South Pacific. We had to get to New Zealand from Tahiti and had two options. I could pay 15k miles per person in economy or 30k for business class. I had the miles to cover the latter, so that’s what we did. Was it a game changer? Nope. But it was a fun treat, and the only business-class redemption on that trip.

2) Will I need these miles for a trip in a near future?

Most of the trips we make are optional, but going to Europe to see my family is not. So, I try to make sure we have enough miles for four roundtrip award tickets at all times. Obviously, I am always in the process of acquiring more points, but that’s been my general rule over the years in case this hobby comes to a screeching halt.

How I approach booking hotels

1) How much time will we be spending in the room? Can we take advantage of the included amenities?

A good example is our recent stay in NYC. I ended up booking Hyatt Place New York Midtown- South for 20k points rather than Park Hyatt New York for 40k points per night. I knew we would be super busy, and would not have time to use the cool-looking pool in the Park Hyatt property. Basically, in this case, the hotel was just a place to sleep, so I didn’t feel compelled to spend more than necessary. The only thing that mattered was location.

However, if my husband and I were to go back to NYC without kids, I would likely spend 25K Hyatt points per night and stay at  The Beekman It doesn’t have a pool, but it looks like a unique/historic property. The CPP would not be as impressive compared to Park Hyatt, but I don’t really care. In fact, I would have paid an extra 5k points to stay here instead of Hyatt Place, but unfortunately regular rooms only have one bed.

I do occasionally splurge on Hyatt resorts, and that’s one area where I think ROI is often worth it. When we go to Hyatt Regency Coconut Point resort, we spend almost the entire time on-site enjoying the included amenities.  It’s not cheap on points, but to me the value you get is incredible.

2) Are there better/unique options if you pay cash?

As much as I prefer using points on lodging, it doesn’t always make sense. Even the most luxurious and splurge-worthy hotel won’t be a good fit when it’s not located conveniently in relation to my sightseeing plans.

Occasionally, a property looks just about ideal, like Park Hyatt Kyoto, for example. I can totally see myself splurging on it, and I actually had the chance to do so last year. However, it would mean giving up renting a historic machiya, a traditional restored house. I simply couldn’t do that. Machiya was itself a splurge at $270 per night, since we could have stayed in a hotel room for $100. But I honestly have no regrets.

 

Final thoughts

I wish there was a formula that would make decisions like splurging vs. saving simple.  But there is no such thing, and everyone has to determine their own priorities. It will ultimately come down to how many points and how much money you have. But I think even for those of us with limited cash/points there should be room for occasional splurging. Just throwing caution to the wind, and going with your Bauchgefühl.