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6 European Destinations Finally Cheap Enough to Visit

Christa Avampato — Fri, 03 Apr 2015 13:00:09 +0000

For years, visiting Europe has been considered a relatively extravagant vacation, thanks in part to the strength of the Euro. But that's changed in in recent months, as the U.S. dollar gains value. While visiting Europe may not yet be truly cheap, the decline of the Euro means it's at least starting to approach affordability for many Americans. Here are six European destinations that are now a great deal for American travelers. (See also: Visit Europe for a Lot Cheaper Than You Think)

1. Bucharest, Romania

This scenic city is nestled along the banks of the Dâmbovița River. Though the city was heavily targeted during World War II, many of its historic and cultural landmarks miraculously survived. The recent boom of economic and cultural activity has revived its pre-World War II reputation as the "Little Paris."

2. Sofia, Bulgaria

Sofia's history spans 2,400 years, so it's no wonder that its residents are rightly proud of their heritage. Sofia has an extensive greenbelt that makes this urban environment an oasis for nature lovers. Mountain hikes are a regular activity for residents and tourists alike, and one of the city's biggest draws. Lovers of the arts, particularly live theater, can get their fill and then some at cultural landmarks such as the Ivan Vazov National Theatre, the National Opera and Ballet, and the many fine art museums.

3. Prague, Czech Republic

It's hard to beat the romance of Prague. The Charles Bridge connects what's commonly known as Old Prague and New Prague, and it's a daily home for the city's artists who set up shop every morning to create and sell their work. Prague Castle, the anchor of Old Prague, is one of the grandest castles in Europe. The food and drink (particularly beer) are rich and flavorful, and the people are exceedingly welcoming to tourists.

4. Lisbon, Portugal

Often overlooked by tourists, Lisbon rivals other, more expensive European destinations such as Madrid, Barcelona, and Paris for its beauty and culture. It's the oldest city in Western Europe and one of the oldest in the world. With a comfortable Mediterranean climate, its economic prosperity has made it one of the most easily navigated cities with extensive and reliable public transit in many forms. Lisbon's rich and varied architecture is just the beginning of its cultural gems, which also include a substantial number of top art museums, film festivals, and theaters.

5. Santorini, Greece

If your idea of vacation includes stunning vistas, delicious local food, sunny beaches, and an easy friendliness with the locals, then Santorini is a city (or island) made for you. It's a bit of a trek to get there, but one look at the cerulean rooftops that line its winding and stunning coastline will make it worth the effort. The food is among the best I've ever had while traveling, and residents are more than happy to drop everything to make your vacation one you will never forget. It also can't hurt your pocket that Greece was one of the hardest-hit countries during the economic crisis; help revive their economy by spending your vacation dollars here.

6. Berlin, Germany

Forget Paris? Never! But if Paris is out of reach on your travel budget, Berlin's bustling arts scene will inspire and entertain you for days on end. Nearly 25 years after the city was reunified, it has managed to maintain every bit of its history, while also reinventing itself as a mecca for creatives. Whether your creative bent is literature, visual arts, music, or performing arts, Berlin has more culture than you could ever consume in one trip. Easy to reach and incredibly affordable, you're likely to leave Berlin wanting to return very soon.

If you've shunned Europe as a too-expensive travel destination in recent years (and who could blame you?), these cities are well worth a look as you plan your next vacation. Take advantage of this window to affordable Europe. World financial circumstances change quickly, and you don't want to miss this opportunity.

Are you planning a European vacation? Dreaming of one? Where are you going?

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This article is from Christa Avampato of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Things Don't Cost What They Used To: 10 Major Price Shifts in 2010

Darwins Money — Mon, 27 Dec 2010 13:00:08 +0000

With 2010 coming to a close, it's interesting to check out just how much more it costs to buy common goods and assets compared to the beginning of the year. We hear conflicting stories about the Fed printing money, which should lead to inflation, contrasted with two straight years of no cost-of-living increases for Social Security. While the "official" inflation gauges seem to indicate we have very little inflation in the system, take a look at these everyday items and form your own conclusions:

Oil: Up 25%

The rise in oil prices has been the sleeper inflation story of the year. With Americans practically shrugging off oil under $100 when we saw a superspike over $140 just a few years back, oil has been steadily rising all year without much fanfare.

Gasoline: Up 24%

The big move in oil prices this year carried through into gasoline prices. While there's more involved here, from refining capacity to varying state taxes, for 2010, gasoline prices roughly kept pace with oil. We're only at $3 gas now compared to the $4 gas nightmare still burned into our psyche.

Corn: Up 53%

Corn is just one of the "soft commodities" that saw a spike in 2010.

Sugar: Up 29%

Another key staple, we saw a rise in sugar prices over the year, especially as of late.

Cotton: Up 109%

There was a huge move in cotton this year, which should certainly be showing up in clothing prices in 2011 if this doesn't subside.

Coffee (Arabica): Up 64%

Coffee is hot. Consumption is increasing virtually everywhere as emerging markets form a new middle class and switch over from tea. Just when you thought a town or city couldn't sustain another coffee shop, another one pops up — kind of like banks and pharmacies. Have you ever calculated how much you spend on coffee each year? Scary!

Lumber: Up 47%

It's not like we're building a ton of houses this year, but we've seen lumber spike significantly.

Gold: Up 26%

Gold was the story of 2010. From late-night infomercials to new ATM machines spitting out gold coins, consumers were bombarded with commercials and "experts" telling us we should buy gold now (check out this Cash-4-Gold expose for instance).

Silver: Up 73%

What many people didn't catch on to until later in the year was the silver story (poor man's gold). For various reasons, silver is more volatile than gold and this year, we saw silver almost double.

Euro: Down 9%

One of the few positive stories for Americans was the decline in the Euro. This makes it that much cheaper to travel to Europe in 2011, as well as to import European goods. This is primarily due to Europe's folly, not a robust U.S. Dollar though. The bailouts of Greece and Ireland, with rumors that Portugal and Spain are soon to follow, have set off jitters in the currency markets, making the U.S. Dollar look a little less risky.

So, while there's talk of deflation and Ben Bernanke told us on 60 Minutes that he's 100% confident he can control inflation, chances are you are a routine consumer of at least some of the items on the list above...do you feel like things are getting cheaper? I don't. There are tons of different commodity ETFs to trade or hedge costs in many of these assets, but that may be best left to the pros unless you're actually in the business of purchasing these items — or you have a serious coffee addiction!

Don't you feel like life is getting more expensive?

Sources: Financial Times , Bloomberg

This article is from Darwins Money of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The sinking dollar, as viewed from overseas

Philip Brewer — Sun, 25 Nov 2007 13:39:39 +0000

To someone in the US, the decline in the value of the dollar has mainly made itself felt up to now in the form of increases in the prices of globalized commodities--everything from oil to nonfat dry milk. Consumer goods, even though many are imported, have only just very recently begun to show price increases. When you look at the picture as viewed from overseas, though, it's not as simple as just seeing the reverse.

The most straightforward effect of of a lower dollar is that stuff manufactured in the US would be cheaper overseas.

What, you may ask, is manufactured in the US anymore? Actually, quite a bit. The US still exports hundreds of billions of dollars worth of jet airliners, computers, telecommunications gear, and industrial machinery (together with parts for all those things). There are also thriving US industries selling things like chemicals and plastics. There's even good sales of consumer goods--especially medicines, but also toys, games, sporting goods, musical instruments, etc.

All that stuff, together with agricultural goods, has added up to some $850 billion so far this year. Which means, since those dollars are down from €1.00 for a dollar to just €0.67 over the past 5 years, all that stuff is on sale. (The dollar is down similarly against the Canadian dollar over the same period from close to $1.60 Canadian to about $1.00 now.)

So, on the one hand, with all that stuff on sale, you'd expect to sell more. And we are selling more, but only to a modest extent, due to the many delays and complications inherent in trade. (How many jet airliners that US companies sell depends more than anything else on how many were ordered over the past couple of years. Drug sales are mainly a function of the latest medical research on the best treatments for various conditions and how many people have those conditions.) Being able to get them with cheap dollars will change things around the margins, but even for things where price changes make an immediate difference in how much people want to buy, there are still manufacturing constraints, shipping constraints, and so on.

Even so, to the extent that US companies still make stuff--and that's a considerable extent, despite globalization and outsourcing--those companies can now sell stuff cheap enough that they can really compete.

What that means is that, where there's a direct foreign competitor, that competitor is now comprehensively screwed. Just like US companies, those companies have already outsourced as much as they can. Any work that hasn't been outsourced has only been kept because the skill set just doesn't exist overseas or national policy requires that it be kept. So, with US companies being able to pay their workers with dollars that are only worth €0.67, European, Canadian, and other manufacturers are facing some serious competition.

Of course, this requires that the US company actually be a competitor. This means, for example, that Airbus is in more trouble than, say, Toyota. (The yen is actually not up nearly as much against the dollar.)

To the small company that's providing goods and services for the local market, this isn't so bad. They were already competing with all the usual globalized suspects; giving the US an extra 30% edge doesn't help, but any market where it would make the difference has probably already been grabbed by some much cheaper global player.

For the major European and Canadian companies doing business in global markets, though, this is very bad news.

Of course, major companies have large tax bills and large workforces. A drop in business would lead to lower tax revenues for the countries. It would also lead to layoffs--layoffs of voters. Those realities are going to put serious pressure on governments to "do something" about the value of the dollar.

What can be done? Well, any central bank can hold the value of its currency down as low as it wants, if it's willing to buy an arbitrarily large amount of the other currency. That's what China has been doing for years now. The result, though, is inflation. The other central banks can join the game, if they want. They probably don't. In fact, even China is getting out, having decided that it's really got all the dollars it wants.

Beyond that, there will be political pressure brought to bear, but it's hard to bring that sort of pressure to bear on the US. A falling dollar makes Americans poorer in some sense, but not in ways that prompt ordinary people to demand better from their government. In the old days of the gold standard, the pressure would appear in the form of foreign sellers demanding actual gold instead of mere paper, the excess paper money that leads to a collapsing currency would be automatically curtailed. Nowadays, though, the pain of a falling currency is very much spread around--foreigners suffer about as much as Americans, and neither suffers so very much as to make the value of the dollar a major political issue.

Things will likely go on as they have, with people who have dollars trying to find something of value to spend them on. Once you've bought all the jet airliners, network switches, and soy beans that you want, you're pretty much down to buying stuff for investment. US treasury securities have been a popular choice, but US interest rates are now low enough that they wouldn't seem particularly attractive, even if they didn't face the obvious problem that your investment would still be in US dollars. US companies, with the credit problems stemming from the housing bubble and subprime loan debacle, should only be bought with a keen understanding of the underlying business. Still, there's plenty of other stuff worth buying in the US--land, for example. There's lots of that going on.

There's a lot of anxiety about this issue. The US dollar is important enough in world trade, that if it keeps going down, trade will become disordered. There are enough dollars in the hands of people all over the world--foreign governments and their central banks, major corporations, wealthy individuals--that there's a serious incentive for them to get their governments to do something. And there are plenty of theories about just how bad that something could turn out to be. Personally, though, I don't find any of the doom scenarios very compelling.

A complete collapse in the dollar is unlikely, because there's so much stuff you can buy with dollars that the currency will continue to have some value--it won't go straight to zero. Further, its slide in value is self-limiting because eventually both voters and the wealthy elite in the US will insist that it not fall further.

The individual outside the US is really a bit player in this. You're mostly not in a position to buy farmland in the US or hedge your future purchases against currency fluctuations. If you work for a multinational corporation that pays its workers in some currency other than the dollar, but which competes with companies that do pay their workers in dollars, you might want to be a bit worried about your job; even if jobs aren't lost, raises and promotions are going to be harder to come by. Beyond that, enjoy the occasional cheap thing you can get that's made in the US.

This article is from Philip Brewer of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: