You deserve a break. You really do. But we want to make sure that break doesn’t come with strings attached. Strings in the form of debt. A new study released by LearnVest.com states that Americans take, on average, six months to pay off vacation debt.
Seventy-four percent of people polled noted that they go into debt when paying for a week-long vacation. Most people rack up around $1,000 in debt for one week in the sun (or elsewhere). That $1,000 can quickly turn into a lot more when you add interest rates that span six months.
Instead of going into debt in order to go on vacation, consider these ways of paying for your time off - without regretting it until 2018.
Don’t go into debt in order to go on vacation. While it might seem like you really need a break - and we believe that you do! - it’s not worth paying for that vacation six months from now.
- Save cash for your vacation. This is the simplest and most straightforward way to avoid credit card debt. If you plan in advance, you can save enough money over the next year to take a really great vacation next summer - debt-free.
- Use credit cards to bridge the gaps - but save the cash too. You can’t book a flight with cash or pay for a hotel through a website. You need to have a credit card. But, you can set aside the cash for those transactions and pay off those charges immediately.
- Make sure the card you do use has a low-interest rate. It doesn’t make sense to pay triple the amount of your vacation in credit card interest.
- Snag those rewards. You may as well use points if you are going to use a credit card, right? Find a card with decent rewards (miles or otherwise) and start using it. But, remember to pay off that balance every month.
- Rethink vacation time. Everyone wants to get away during the summertime, which is why vacations during this time of year are so pricey. Think about postponing your vacation to the fall or even wintertime - you may wind up with a deep discount.
- Look for lower-cost lodging rentals. Sites like Airbnb often provide vacation housing for a much cheaper price than a hotel. You won’t have a maid service and you might have to cook a few meals, but you’ll save money this way.
- Set a spending budget. It can feel like you have no limit on spending while you’re taking a carefree vacation - but this is a mistake. Set a daily budget, give the kids a spending allowance, and make sure that you don’t break the bank while traveling (you don’t really need all of those souvenirs anyway!).
- Look into food deals and packages. If you’re going to a resort area, research package deals, and packages that include food. If you really think about what you will and won’t eat, you might save a lot of money. For example: maybe you don’t need endless drinks on a cruise if you don’t drink!
- Check out last-minute packages. Many airlines offer packages for last-minute travelers. If you have nothing else planned this summer (and can give your boss a short notice), you may be able to head to a great destination for less.
- Be a tourist in your own town. When is the last time you did those touristy things at home? Get a spot on the city tour bus, check out calendar events like fireworks, and spend some time at home - you can still take a week off (that means putting down your phone!) without spending a ton of money or going anywhere.