I wasn’t expecting to go on a Christmas cruise this year. I originally expected that I’d spend Christmas the same way I’d spent the previous two holidays: with my ex and my son. But things change, and I found myself wondering what I’d do.
Turns out my cousin was at loose ends, as well, and we hatched a plan: the Christmas cruise. But how should we pay for it? Could we make it work for our finances?
The answer turned out to be yes.
Not only did we find something inexpensive, but I managed to arrange matters so that my cruise will practically pay for itself in the long run, thanks to credit card rewards points, a tax deduction and cost-splitting with my travel buddy.
Finding a Cheap Cruise Option and Using Discounts
Our first step was to find an inexpensive cruise. We were surprised that we could book a four-night trip for about the same cost of staying in a hotel. It only cost us each about $500 (we sprang for a fancier berth than the cheapest option and bought a couple of shore excursions).
We received discounts by buying during a sale, too. Part of the discount came because I’ve used SkyMiles Cruises in the past to book experiences, so we had access to a slight discount by having me book the cruise. Although we didn’t get access to some of the other discounts available, I found that in the future, it’s possible to get discounts for:
- Being a past guest with the same cruise line
- Being a senior citizen
- Living in a certain ZIP code
- Choosing certain less-popular dates
I was surprised to discover, too, that by going a week earlier, we could have saved close to $200 apiece. But we wanted to go over Christmas, and that’s a more popular time to cruise, so we paid the extra for going during a peak time.
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How the Cruise Practically Pays for Itself
Because I made the booking through SkyMiles Cruises, and I’m a SkyMiles member with a SkyMiles credit card account, I was able to get triple points for booking. But I didn’t just book my cruise. I paid for my cousin’s cruise, as well, and she gave me cash.
Being able to pay for the total cruise boosted my rewards points, and between the points for the dollars spent (I’m at Platinum level with the SkyMiles program) and the points for using SkyMiles Cruises for the booking, it’s enough to provide me with enough points for a plane ticket worth about $300 — at least in the scenarios I tested online for some of my common travel experiences.
That’s more than half the cost of my cruise back already.
Also, I’m writing about the experience for more than one outlet, so I’ll be able to deduct the cost of the cruise on my taxes. Now, the reality is that a tax deduction is not a dollar-for-dollar reduction in your tax bill. Instead, a deduction reduces your taxable income, so it’s not as valuable as a credit. But, it’s still worth having.
A quick and dirty way to figure out how much a deduction is “worth” to you is to multiply the amount you’re deducting by your marginal tax rate. For the tax year of 2018, I’ll be solidly in the 24 percent tax bracket, so I multiply the $500 for the cruise by 0.24 to get $120.
So, to do the math, it was $500 for the cruise, minus the $300 reward discount and the $120 tax deduction value, which comes out to $80 total cost to me. That’s not bad at all for a cruise.
I didn’t come out to $0, but it’s close enough to make me happy. My Christmas cruise is practically paying for itself, leaving me plenty of money left over to buy presents for family and friends.
Click through to read more about money-wasters to avoid on cruises.
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This article originally appeared on GOBankingRates.com: How My Upcoming Christmas Cruise Will Pay for Itself