How to Handle Work-Related Travel Reimbursement for Personal Gain

Travel reimbursements are the worst. Here’s how to make the most of them.

Travel reimbursements suck!

Out of all the twisted ideas of employer-employee relations ever foisted by the MBA crowd on university administration, forcing employees and even freakin’ grad students* to pay up front to do keep aspects of their jobs — such as attending and presenting at conferences and other institutions’ talk series — is the worst this side of adjunct expansion. It’s the travel equivalent of the shift from defined benefit to defined contribution retirement plans, taking a longstanding expectation for decent employers’ behavior and spinning the burden and risk onto the employee to limit the employer’s liability. Plus it comes with tons of paperwork, documentation, and administrative delays, and if you screw up details in ways you can’t fix, it comes out of your pocket. Not to mention the opportunity costs of how you could be using that money in the meantime, and the added risk of screwing up your personal finances due to big, irregular variation in your expenses.

It’s terrible policy in general, and particularly for institutions seeking to promote any semblance of a commitment to diversity, equity, inclusion, and belonging. Making your employees be perpetually owed $2,500-7,500 that they’re expected to fund on their credit cards and savings is not exactly the way to open up the gates to the ivory tower.

Not all institutions work this way. Heck, at my university, not even all colleges work this way. Other colleges in my university have institutional credit cards and let you book travel directly with university funds. But does my college let us do the same? Absolutely not, for reasons that are completely opaque to me.

But you should still game them for maximum personal advantage!

Mandatory reimbursement policies shouldn’t exist. But since they often do (because your employer is trying to convert their liabilities into yours), you might as well take max advantage of the situation.

I have four major strategies (and 3 advanced variations) to leverage this situation for my personal advantage that you should use too:

Create and fund a savings account with enough cash in it to pay for two separate work trips while you’re awaiting reimbursement.
Sign up for every travel rewards program you can, and use them efficiently.
Get and use travel-oriented credit cards to maximum efficiency.
Use your credit card and travel rewards points to fund as much of your personal travel as possible.

1. Create and fund a savings account with enough cash in it to pay for two separate work trips while you’re awaiting reimbursement.

If you use only one of these four strategies, make it this one. The biggest issue with work-related travel reimbursement strategies is that they make it way harder to manage your personal budget. If you can save up a few thousand dollars, this strategy will solve this problem entirely (except for the paperwork — can’t help you there, pal).

A Scenario

Let’s say you normally live on $4,000 a month take-home pay. Something like this:

Rent: $1500 per month
Other fixed expenses: $700 per month
Food: $500 per month
Investments & savings: $800 per month
Disposable / fun: $500 per month

Then in March, you have a conference with the following costs:

Registration: $500 (paid in January)
Airfare: $625 round trip (booked in January)
Block rate hotel room: $250/night for 3 nights = $750 (booked in January)
Daily expenses at conference: $125/day, 3 full days = $375
Total: $2,250

That conference in total costs 56.25% of your monthly budget! And you can’t just shift the money around within the month since the biggest expenses were all 2 months beforehand, and you won’t be reimbursed until 1-2 months after your conference (if your university is like mine). Without specifically planning for this eventuality, you have a few (bad) options:

Raid your emergency fund: If you follow standard personal finance advice and have 6-12 months of expenses saved in an emergency fund, you can swing it, but this is a regular part of your job, not an emergency. What if an emergency happens around the same time?? This is not ideal. Plus most people don’t have that much sitting in cash.
Reduce your other spending: Sure, you can cut back some on other expenses (see below for a suggestion on how to do this advantageously), but you can only cut so deep for yourself, and if you have dependents, it’s unrealistic. In the budget above, you could maybe cut $600 per month, but then it will still take like 5 months to pay if off — and meanwhile, you’re paying credit card interest, probably at exorbitant rates.
Stop saving and investing: This is also a bad idea. If you have an employer match on your 403(b) contributions, you’ll lose them for these months, further reducing your compensation to your employer’s benefit. Regardless, investing and saving work best psychologically if you just get used to the idea that that money is already gone and there’s nothing to be done about it — this approach would break that very helpful illusion.
Carry the balance: This is the worst option. Credit card interest rates are generally 20-30% APR, and there might be a 4-month gap between your expenditure and reimbursement. And when the reimbursement comes, your university certainly will not be covering those interest charges. Avoid this if at all possible!

Basic Strategy: What to do instead

One key to personal finance budgeting is to anticipate irregular but predictable expenses and pre-fund them as part of your monthly budget (regardless of whether the bill is due this month or not). Use this strategy for things like home repairs, vacation costs, annual memberships, health care costs, and other expenses you know will be coming along sometime, and your spending on other stuff every month will be much more in line with what you can afford.

My approach to all these kinds of issues is the digital envelope system. This is not my idea — among many others, I got this idea from Ramit Sehti’s excellent book I Will Teach You To Be Rich — but let’s tailor it here to the travel reimbursement issue.

I go to 4-6 conferences a year domestically. They vary in their costs, but $2000-3000 is the usual range. Given that reimbursements are often slow (since staff are overloaded processing reimbursement requests when my whole department attends the same conference), as a rule it’s best to assume that you need to be prepared to be owed reimbursement for about 2 conferences at a time, meaning you should be ready to be owed $4000-6000 at any time. (You can also look at your own expected travel schedule in advance and tailor the amounts to your specific needs.) I split the diff and assume $5000. Since that’s more than my monthly take-home spending budget, I have to plan ahead.

So, what do I do? Simple. I have 10 Marcus savings accounts with nicknames for their intended purposes. One of them is Travel Reimbursement. I funded it with $5,000 when I got extra lump sum summer pay one year. When I pay reimbursable work expenses, I put them on my credit card, then pay off my credit card’s next statement from the Travel Reimbursement account (at least the expenses that are reimbursable). When the reimbursement comes back, I put it back in the Travel Reimbursement account. In the mean time, the money accrues interest, so this fund gradually increases in size, hopefully in line with inflation. That’s it!

Advanced Strategy #1: Use travel reimbursement to boost your savings and investments.

If you have more slack in your monthly budget than the above scenario, and/or have few/no dependents and want to be hardcore about this, there’s another way to leverage this shitty situation to your advantage: Treat work-related travel expenses as personal expenses, then contribute reimbursements to your investment and savings accounts. I’ll admit that I’ve never been this hardcore, but my friend did it for years. The way I think about this is that conferences are often fun: you’re going out to eat, often at good restaurants, you’re exploring a new city, and you’re catching up with friends. If you have a well-designed personal finance budget, you have funds dedicated for all of these things every month. ‘Spend’ them on the conference then put the reimbursement straight into your high-yield savings account, Roth IRA, or brokerage investment account.

2. Sign up for every travel rewards program you can, and use them efficiently.

Every airline and hotel chain has a loyalty program. Every time you fly or stay with them, you get points which you can then use to fund your future personal travel. You should sign up for all of these and save your account numbers in a password-protected spreadsheet or password manager.

It’s best if you primarily travel with one airline and one hotel chain whenever possible. This way you stack up points within one program so that you can redeem them more quickly, and may travel enough to earn status with them so that you get additional perks such as seat and room upgrades, and can also earn points at a faster rate.

To decide which airline to focus on, research how many flights leave your area airports and to what destinations. If your airport is a hub for an airline, you should focus on that one. Otherwise choose one that goes to more destinations, more regions of the country, and/or more cities where your field regularly has conferences. Your major national airline options are American Airlines, United Airlines, Delta Airlines, and Southwest Airlines. Airlines like JetBlue, Alaska Airlines, Hawaiian Airlines, etc offer good regional service but often can’t take you nationwide.

To choose a hotel chain, there are tradeoffs between their footprint and the relative generosity of their loyalty programs. The four major options are Hilton, Marriott, Hyatt, and IHG, each of which except Hyatt cover numerous subsidiary brands. I prefer Hyatt thanks to its favorable redemption rate for Chase points and solid status perks, but it has the smallest geographic coverage of all the major chains.

3. Get and use travel-oriented credit cards to maximum efficiency.

Travel-Related Credit Card Reward Categories

This is effectively a way to double-dip on travel points from work-related travel. When you spend money on a rewards credit card, you’ll get rewards in the form of cash back, points that could be spent on travel, and points that can be transferred to various airlines’ and hotels’ rewards programs to book personal travel. But not all cards are created equal — see my guide to the best credit cards for academics (*when I get around to writing it). Many offer especially attractive rewards rate on key forms of travel:

Airfares: Each airline offers co-branded credit cards with low or $0 annual fees, and there are higher-fee, higher-reward options for every airline and each credit card point ecosystem. At the high end, the American Express Platinum charge card offers 5x points on airfare (worth about 10% back on the expense), but also comes with a $695 annual fee (which you can reduce with work-related spending — see below).
Hotels: Just as with airlines, every major hotel chain offers co-branded credit cards which can often offer very attractive reward rates, perks during your stay, and fast tracks to loyalty program status. Credit card points also transfer to each of the major US-based hotel chains, but the redemption rates for Hilton, Marriott, and IHG are generally very poor, so I would only do this for Hyatt (which has attractive reward rates and is a transfer partner for Chase credit cards).
Dining: Many credit cards offer rewards bonuses on dining. Some great examples include the Chase Sapphire Reserve/Preferred, Capital One Savor/SavorOne, and American Express Gold charge card.
Other travel: Many credit cards have catch all travel bonus categories, such as the Chase Sapphire Reserve/Preferred. Chase cards also have favorable bonuses with Lyft. Amtrak is generally outside the US credit card point transfer system, but they do offer a co-branded card with Bank of America.

You should note however that many of the most rewarding credit cards require high credit scores, so the best options will likely not be available to younger grad students or the structurally disadvantaged.

Using Credit Card Credits on Work-Related Travel

Many of the most rewarding travel-related credit cards offer statement credits for travel-related expenses. You can take advantage of this to effectively lower or eliminate some of these cards’ annual fees by earning them on work-related travel. Here are a few examples:

Chase Sapphire Reserve: Has a $550 annual fee, but includes a $300 annual travel credit. If you use this every year, the effective annual fee becomes $250 before you consider the other credits and perks.
American Express Platinum: Comes with a hefty $695 annual fee, but you can drop it to $295 easily with work-related travel: By using the $200 annual airline fee credit for United TravelBank funds which you can then apply to work travel, and by using the $200 annual hotel credit on a hotel booking for conference travel.
Capital One Venture X: Has a $395 annual fee, but offers $300 in annual travel credits for travel booked through their online portal. Use that once a year for work travel, and the annual fee is $95 (more than compensated by its other benefits for regular travelers).

As you can see, work-related travel can make these luxury credit cards with a ton of travel perks and protections a lot more affordable.

Advanced Strategy #2: Credit card churning.

As good as some of the reward rates discussed above can be, the highest ROI you’ll get on credit cards is from sign-up bonuses companies offer on their high-end cards like those discussed above. Often these points can be worth more than $1000 net of the annual fee (which is sometimes waived for the first year). Since 4-6 conferences a year means $8,000-$18,000 in annual work-related travel spending, it’s fairly easy to hit several minimum spend requirements for these sign-up bonuses every year. And if done well, it will actually increase your credit score over time after an initial small decrease. See my guide to credit card churning for academics.

Advanced Strategy #3: Sign up for a rotating set of 0 APR promotional credit card offers.

Not everyone can scrounge up $4000-6000 for their conference travel savings account, especially grad students and starting assistant professors — I certainly didn’t. So here’s another strategy that’s a less ambitious version of the credit card churning approach: Instead of signing up for a series of high-end credit cards with big bonuses, sign up for cards with 0% APR promotional rates. Typically these interest holidays last for about 18 months, so you could cover all of your work-related travel during this period without ruining your monthly budget. Then when the first card’s promotional period runs out, you can sign up for another. If you take this approach, please note five very important cautions:

Make sure if at all possible to sign up for cards without annual fees, or else cancel/downgrade them at the end of the promotional period.
Make absolutely sure you at least pay the minimum payments on these cards each month even during the promotional period, since failing to do so will typically terminate the promotional period and hurt your credit score.
As soon as you get your reimbursement, pay down the credit card by that amount immediately.
Keep in mind that credit card applications will slightly decrease your credit score in the short term, whether you’re approved or not. So I wouldn’t recommend this strategy if you’re about to apply for a mortgage or some other situation where your credit score matters a lot.
I do not recommend using this strategy to cover other expenses except in an absolute emergency. That’s an easy way to dig yourself into a ton of debt. Keep it simple and use this tool only where it’s most beneficial and least harmful, and don’t do it at all if you can’t.

4. Use your credit card and travel rewards points to fund your personal travel.

Here’s the payoff of strategies 2-4 — you’ll amass a war chest of airline/hotel-specific and flexible credit card points that you can use to fund your personal travel. I’ve paid for most of my non-work travel for years in this way, and honestly currently have more than I can spend. However, remember that you’re paying for these points in annual fees, the risk of interest and late fees, and the threat of accumulating high-interest debt. It’s only worth it to accumulate these points if you avoid these pitfalls.

For those who can avoid those pitfalls, these points can go a long way for your personal travel. I’ve covered most of mine this way for years.

Final Thoughts

A lot of modern living in a period of global pandemics, late stage capitalism, and deteriorating politics comes down to making the best of a Russian doll of nested shitty situations. Your employers should pay upfront for things you need to do your job. Sometimes they do; often they don’t. When they don’t, the strategies above will help you minimize the harm and maximize the benefits to your finances.

Footnotes

*: This isn’t just a matter of inconvenience, either. When I was in graduate school, I had a paper accepted for a prestigious international conference held that year in Asia. I reached out to the graduate school and secured some funds to support part of that travel, and my department committed in writing to funding the rest. Great! So I booked the trip, gave the talk, and came back to the US bearing receipts. In the middle of all of this, the Great Recession hit in full force. When I went to my department for the reimbursement I’d been promised, they flatly told me no, even when I showed them the emails where they’d promised to cover it. “You can’t make blood out of water,” the administrative assistant told me, whatever that means. And look, I get it was the biggest financial crash of the past 90 years, but if you’re balancing your budget on the backs of students acting in good faith and consistent with departmental policies and assurances, you’re just being shitty. And travel reimbursement policies allowed them to do that.