8 Tips for Planning Debt-Free Vacations

Are you looking forward to taking a vacation? However, you must take time to carefully plan your trip and avoid getting into debt. Here are a few tips to help you prepare for your summer vacation and avoid financial stress.

In short

Start saving a few months in advance
Then you can easily set aside what you need.
Make a budget
This is key to avoiding debt.
Open a line of credit for unforeseen events
The interest rate is much lower than a credit card.
Compare prices before you set off
You’ll save a lot of money.
Avoid getting into debt
Use cash or a debit card.
Avoid impulse buying
Track your spending.
Pay any fees when you return
If you use a line of credit or credit card, make sure that you pay the balance quickly.
Pack a copy of your budget
You can refer to it if you’re tempted to buy something!

1.

Start saving a few months in advance

Saving enough to cover all your expenses is the best way to ensure your debt free vacations. As a result, you won’t have to use your credit card.

Open a dedicated savings account for your vacation.
Start planning your trip between 6 and 12 months in advance. Then you can set aside a small amount every paycheck and build up what you need.

2.

Make a budget

Ensure that your budget is realistic and reflects all your expenses (accommodation, gas, excursions, activities, food, shopping, insurance, etc.). Be reasonable and make sure you’re spending within your means. If the total exceeds your vacation budget, cut out any unnecessary expenses. For example, if you initially planned to travel by car, consider public transit instead. You’ll also avoid paying for gas.

3.

Open a line of credit for unforeseen events

Unplanned expenses can often arise while on vacation. If possible, plan accordingly by increasing your budget by 10%. Otherwise, you could jeopardize your hard work!

Keep track of any excess spending! You should be in a position to pay off any debt shortly after your return.

4.

Compare prices

These days, you can easily compare the prices of accommodation and activities online. Before you set off, research and plan your trip to ensure it matches your budget. Use price comparison apps to find the best accommodation rates. Since you’ll be spending most of the day exploring, consider whether basic accommodation would be sufficient. This will free up money for other expenses. Choose accommodation that offers cooking facilities so you can limit your restaurant bills.

5.

Avoid getting into debt

As mentioned above, the best approach is to avoid using your credit card while on vacation. However, if you have no choice, set a maximum amount that you won’t exceed. Otherwise, use cash, a debit card or a prepaid card to pay for expenses where possible. This will help you enjoy your debt free vacations.

6.

Avoid impulse buying

We all want to let loose on vacation. However, you should let go of your stress, not your budget! Track your spending and stick as closely as possible to your budget. Otherwise, you could regret it when you return home. Bear in mind that the purpose of your vacation is to relax and spend time with loved ones. It shouldn’t add financial stress.

7.

Pay any fees when you return

If you used a line of credit or credit card to cover unforeseen expenses, pay the balance shortly after your return. You shouldn’t spend years paying for a few weeks of vacation!

8.

Pack a copy of your budget

To ensure that you stick to your vacation budget, pack a printed copy or save it on your phone. If you’re tempted to buy something you don’t really need, you can check your budget (and reconsider!)

In a nutshell, don’t forget that the purpose of a vacation is to create happy memories with your loved ones, and to rest and recharge your batteries. Vacations don’t have to be expensive and you shouldn’t have to go into debt. Enjoy your time off!