While on vacation, you expect to splurge on little luxuries to get the most out of your time away. By definition here, “splurge” doesn’t mean a shop until you drop spree that blows your checking account or credit card limit.
The beauty of credit cards is that you can spend now and pay later, but when you overspend you risk paying more than you bargained for. You may end up spending money used to support your family and keep a roof over your heads.Overspending happens to every person at one point, and your well-trained card-swiping hand goes off to the shopping races. What’s done is done, and it’s time to overcome vacation debt:
1. Plan Ahead
Preventative measures are best to learn first. Plan ahead and research where you’re going to stay and if free breakfast is included. Calculate and create a budget for your expenses, such as eating out, tour fees and transportation.
Create a souvenir budget before you travel. While it’s beneficial to cash in your travel points and rewards on your credit cards, you may want to get a Visa or other gift card that will work where you’ll be staying, to use for discretionary spending — this way you’ll have a physical limit to not exceed. Where possible, look for free street concerts, tours and other entertainment.
When booking lodging and transportation, compare travel saver site rates, such as Which Budget or Google Flights, some of which will use budget airlines and flexible dates to find the best rates.
2. Buy Souvenirs First
Visit the major tourist attractions first and buy a hat for your collection. Get the souvenir shopping out of your system first.
If you know what you’ll want, shop for those items online from home. That way you’ll not have to worry about overspending and transporting the souvenirs home. You also have room in your budget that lets you purchase a small piece of art created on the sidewalk, if you want a truly unique and local souvenir.
3. Cut Back on Excess Spending
To pay back credit card debt and replenish your checking account, cut back on excess spending at home. Make your coffee at home and skip the coffee shop. Do the same thing with your lunch: make your meal at home and take it with you daily.
Rent a DVD instead of going to the movies, and host a BYOB potluck to avoid dinner and drinks out. When you do go out, take advantage of specials.
4. Take Advantage of Bonuses
Are there bonuses you’ve already earned you can cash in, such as travel points? Don’t open accounts or cards just for the sign-up bonuses without thinking.
Sign up cash bonuses may be earned with single purchases while others require a time frame or a certain amount of cash to qualify. Make smart purchase decisions, such as buying gift cards for yourself for groceries and gas to meet the minimum.
5. Double Your Minimum Payments
With what you save on cutting back, double up your minimum payments to reduce your debt faster. If you only pay the minimum, it takes longer to put the debt to bed, and the interest quickly adds up.
Start small and don’t tackle every payment at once. Pay down your small debts first with double payments, and maintain minimum payments on your other balances. Slowly but surely the debt will be paid down.
6. Work With Creditors
The best thing you can do is to take action when it comes to repaying debt. The stress sets in and it’s understandable to want to hide and not face the overwhelming details. The more questions you ask and the more willing you appear to work on the problem, the more creditors are likely to work with you.
If you have medical debt as a part of your vacation debt, most hospitals and their subsidiaries will work with you. If you have a low income, some hospitals will write off the debt or a charity will step in to help.
If you have a mortgage or college loans, contact your lenders to get a forbearance on student loans and home payments. At least keep paying interest, because it adds up quickly. Prioritize what you owe and do your research to know what interest rates and late fees apply.
You have worked hard to earn your vacation days and want to get the most out of them, but be careful not to overspend. Plan ahead and set up a budget for discretionary spending. If you’ve overspent, create a new budget, make double payments where possible, work with creditors and use whatever bonuses and rewards you have at your hand.
Paying down debt takes patience, but with every step, you get closer to a zero balance. Invest your money in experience and savings in the future, and your vacation will be truly soul-satisfying and save you money for more adventures ahead.