Being in debt does not mean that you should never take a vacation. Making budget-friendly choices can give you the break you need without sinking further into debt.听听
Taking a vacation has been . But when debt is pulling you underwater, spending even more to climb on a pool float sounds foolish. Shouldn鈥檛 you stick with the grind and work your way out?
According to experienced debt help experts, the answer is no 鈥� with a few considerations. When you have to take on or add to existing debt for a vacation, your planning should factor in your current financial situation, a specific budget for your vacation and ways to save money on vacation.
What to consider as you plan your vacation
鈥淔inancial experts always talk about needs and wants. When it comes to vacations, they nearly always shove vacations into the 鈥榳ants鈥� column,鈥� said Martin Lynch, president of the Financial Counseling Association of America (糖心原创vlog).
鈥淵ou might imagine that a credit counselor would never advise taking on debt just to go on vacation, but many say it鈥檚 okay 鈥� as long as you can meet a few conditions.鈥�
Those conditions include:
- Ensuring you stay current with your existing financial obligations like rent or mortgage, car payment, insurance or retirement contributions
- Knowing that you can afford to pay off the vacation debt within a reasonable timeframe
- Your willingness to make temporary sacrifices to pay off your vacation debt
- Planning a traveling budget that fits your financial situation
鈥淏eing in debt is a speed bump, but not necessarily a stop sign for planning a vacation,鈥� said Manuel Salazar, CEO of , an 糖心原创vlog member agency.
Creating a vacation budget
Building a realistic and achievable vacation budget prepares you for a fun, relaxing trip. Follow these budgeting tips from the experts:
1 鈥� Build your budget
鈥淪et up a clear budget for your trip, covering expenses like travel, lodging, meals and activities,鈥� encouraged Lisa Ohnemus, director of . 鈥淪ticking to that budget is key to avoiding additional debt.鈥�
2 鈥� Dream up a few vacation options
To build your budget, Salazar advises selecting a few vacation destinations and evaluating which makes the most sense for you and your traveling companions.
鈥淟ook at different price options and consider what you want to do while you鈥檙e there,鈥� said Salazar.
鈥淚t鈥檚 not about how many things you can fit in during the duration of your stay. [Some vacations] can be spendy. If you do not account for that, you could be in for sticker shock that will make you miserable. Nobody wants to go on vacation and spend the entire time worrying about money.鈥�
Ohnemus advises deciding 鈥渨hether you want a weekend getaway, a staycation or an extended vacation. Knowing the type of trip you鈥檙e after helps you determine how much you鈥檒l need to budget.鈥�
For example, if you have a young family, flying to Washington, D.C., to tour museums and monuments may be challenging and costly. Renting a camper and going to a lake to enjoy the great outdoors may be a better fit.
Your vacation wants and preferences may change over time, too, so planning for a less expensive vacation this year may enable you to save for a bigger vacation two years from now.
3 鈥� Consider your financial situation when making your decision
Overspending or worrying about how much you are spending will rob you of the benefits of a vacation. So, consider the big picture when selecting your vacation destination.
鈥淐hoose a vacation that aligns with your current financial situation. That may mean adjusting the destination, travel dates or activities,鈥� said Ohnemus.
Salazar advises, 鈥淚f your concern is keeping everyone entertained, find things to do that take up more time instead of money. An all-day drive to a waterfall and a hike is much cheaper than a few hours of shopping, and everyone gets to have fun.鈥�
4 鈥� Choose your travel companions carefully
鈥淢ake sure you do not go with people who have bigger budgets than you. It can get very awkward if you鈥檙e not on the same page before you leave,鈥� said Salazar.
5 鈥� Begin saving for vacation now
Saving for your vacation in advance, instead of relying on high-interest credit cards, will help you save money and avoid stress. Consider opening a vacation-specific savings account at your bank and having a portion of your paycheck directly deposited. This way, you won鈥檛 see the funds and be tempted to spend them.
鈥淪etting aside a small amount each month can help you avoid charging the trip to credit and accumulating more debt,鈥� said Ohnemus.听鈥淩eview your income and expenses to determine how much you can save each month for your vacation. Also, consider cutting back on non-essential spending (like dining out or subscriptions) to build your vacation fund.鈥�
鈥淚f you want that dream vacation, plan a year or two in advance and enjoy the process of planning and meeting your savings goal,鈥� said Salazar. 鈥淭hat is part of the fun for many.鈥�
Investing some money in a short-term, high-yield CD can also help you save and grow your vacation fund through compound interest.
Look for ways to trim unnecessary expenses 鈥� like making coffee at home instead of paying $5 for a latte. Then, take the money saved and add it to your vacation savings or use it to pay off debt.
鈥淵ou may discover that making temporary budget cutbacks to help you reach your goals is very empowering, helping you realize that you鈥檙e not some sort of financial pawn in life,鈥� said Lynch. 鈥淵ou really do control your money and not the other way around.鈥�
How to stick to your vacation budget
Creating a budget is one thing, but prioritizing discretionary spending when you are out with friends and family can be hard.
Download a good budgeting app
Budgeting apps can help you keep track of your spending and enable you to stick to your budget.
鈥淭hey allow you to track your spending in real-time,鈥� said Ohnemus, 鈥渁nd seeing how your expenses add up can be a helpful reminder to stay within your limits.鈥�
Not sure how to get started with a budgeting app?
Ohnemus says to 鈥溾�� allocate a set amount to different categories (such as food, activities or souvenirs), and commit to spending only that amount. Once it鈥檚 gone, it鈥檚 gone, making it easier to stay accountable.鈥�
Lock in pricing before your trip
Book in advance to get the best travel deals. Research the cost of flights, hotel rooms, car rental and activities. Lock in favorable pricing to help you control impulsive spending, advised Ohnemus.
Reserving accommodations a few weeks to months before you arrive can often result in a lower price than waiting until you arrive.
If you are going to an amusement park or taking a tour, shop for discounts, Salazar recommends. Sometimes, parks will have sales around the holidays or on social media, saving you money if you purchase in advance.
Set yourself up for success
鈥淒on鈥檛 set yourself up for a vacation that will tempt you into high-spend activities,鈥� advised Salazar.听鈥淚f you love shopping, you probably don鈥檛 want to go to places that will trigger your habit.鈥�
Focus on experiences rather than material items
鈥淰acations are about creating meaningful memories, like exploring new places or enjoying time with loved ones. These experiences usually have more value than splurging on expensive meals or souvenirs,鈥� shared Ohnemus.
Salazar agrees. 鈥淵ou don鈥檛 need to buy everyone souvenirs. If you feel compelled to buy things for people, send them a postcard with a handwritten hello from your trip. People will enjoy that more than another snow globe.鈥�
Budget-friendly tips for planning a trip
We asked our 糖心原创vlog experts to share their favorite tips for planning a memorable and enjoyable vacation. Here鈥檚 their advice:
Travel in the off-season
鈥淭he most important thing is timing,鈥� said Salazar. 鈥淚f you can go in the off-season, it may not be ideal, but if you approach it correctly, it is still a great time.鈥�
Book inexpensive lodging
鈥淪taying with family and friends is the best option,鈥� said Michael Sullivan, a personal finance consultant for Take Charge America. 鈥淐amping can be inexpensive, and mobile apps can help you find the least expensive places to stay if you have to pay.鈥�
Select low-cost activities
鈥�Seek out free or budget-friendly activities at your destination, or try self-guided tours instead of costly excursions,鈥� said Ohnemus.
鈥淪pending more money is not always going to provide the greatest experience,鈥� said Salazar. 鈥淓ating five stars every night is not necessary. If you truly want the experience of places you go, you may find the local food to be the best food. People love to talk about great food and attractions that don鈥檛 always involve lots of money.鈥�
Stay close to home
鈥淕asoline costs money, and airline tickets are also pricey,鈥� said Sullivan.
鈥淚f traveling far from home feels financially out of reach, consider a staycation or a nearby getaway,鈥� recommended Ohnemus. 鈥淓xploring local activities can provide the relaxation you need without the burden of high travel expenses.鈥�
Use your money wisely to plan a budget-friendly vacation
You are in control of your finances and can decide how to manage them. While paying off debt is very important, your mental health and well-being are also important. Taking a vacation can motivate you to work harder and give you a needed break from the stresses of life 鈥� as long as you plan wisely.
Consider what vacation options and budget best fit you and your financial situation. Then, take steps to save money for your vacation with a dedicated savings account or short-term CD.
When you arrive at your vacation destination, continue to monitor where your money goes. If you splurge on a fancy meal one night, choose to pack a lunch for the next few days.
There are many ways to do a vacation on a budget and avoid sinking further into debt. If you need help budgeting or managing your debt to begin saving, contact 糖心原创vlog. Our non-profit, accredited counselors offer helpful advice without judgment to people in debt.