By Daniel Rodriguez | Dr. Budgets
It’s officially summer and, for many of us, that means summer vacations! For many of my clients, the idea of saving for a vacation throughout the year had never occurred to them before working with me. They would simply charge all their vacation expenses to their credit card, which would just add to their overall debt. Budgeting for your vacation is advantageous for many reasons. So today, I’m going to share with you the benefits of debt-free vacations and how to make it happen. Also, I’ll share some tips to make it fun!
Benefits of Debt-Free Vacations
- Remove the Guilt. When you’re on vacation, you don’t want to worry about anything. Budgeting for your trip (airfare, hotel, rental car, meals, activities, souvenirs, etc.) allows you to feel okay about spending that money because it’s already accounted for. And, you aren’t going into debt (or deeper into debt) to go on your trip!
- Credit Card Rewards. If you budget for your vacation throughout the year, then you’re able to charge the airfare, hotel, and rental car when you book your trip, and then pay it off with the money from your “vacation fund.” This will allow you to earn the credit card points for those purchases (often, you can earn better benefits for travel purchases than everyday credit card purchases, depending on the credit card).
- No Excuses. Some people have a hard time taking time off, but there are so many benefits to vacationing! If you budget money to take some time off, then you won’t delay your vacation (or never take one!) because you don’t have the money for it. You deserve some time off, so take it!
Deb-Free Vacation Steps
- Plan your vacation. Take some time to think about what you (and your travel companions, if applicable) want out of this vacation. Why are you taking this vacation (rest & relaxation or travel & adventure)? What are the most important things you want to get out of this trip (feeling refreshed, feeling invigorated, socializing / visiting family and friends)?
- Estimate what you think a vacation will cost, include line items such as:
- Hotel / Lodging
- Transportation (planes, trains, and automobiles)
- Activities and shopping (amusement park tickets, souvenirs, etc.)
- Pet sitting and/or house sitting
- Loss of wages
- Take that number and divide it by 12
- Build that figure into your monthly budget (or better yet, save it into a savings account specifically earmarked for travel!)
- Repeat steps 1-4 for other vacations planned for the year
Here are some ideas to make budgeting or saving for your vacation more fun:
- Save Your $5 Bills. Every time you get a $5 bill, put it in a jar or envelope and turn that into some vacation fun money.
- Track Your Progress. Create a chart to track your progress while you save for your vacation.
- Start Planning & Look for Discounts. Experts have said that just planning or anticipating your trip can make you happier than actually taking it, so start planning early so you can spot discounts and start getting excited about your future trip!
Have you ever taken a debt-free vacation? Or, maybe (like many of my clients), have you never even considered taking a debt-free vacation? Please share in the comments below! If you would like to figure out how to build in debt-free vacations into your budget, contact us today!