DON'T LET VACATION ZAP YOUR BUDGET
Posted on: Jul. 03, 2017 in Money, Debt

Are you taking a summer vacation this year? For many, this is the only time of year that travel is even an option because of school schedules and the like. No matter what time of year you choose to get away, getting out of town can be very expensive.

According to the 2017 LearnVest Money Habits and Confessions Survey, “74% of people say they’ve gone into debt to pay for a vacation, to the tune of $1,108, on average.” This number includes people who haven’t gone on their trips yet, but are already planning and have made credit card purchases toward them.

How much do people spend? LearnVest found that Americans spend an average of 10% of their annual budget on vacations and that 25% of the survey’s respondents spend as much as 15%. Unfortunately for many, this is too much of the annual budget spent on a leisure activity and more than many can afford. Considering some financial experts say 10% of your take home pay is the most you should spend on entertainment, spending that entire amount on one vacation should leave you never eating out, going to the movies, or doing anything fun for the rest of the year.

So how can you get away without racking up the debt? Here are some tips:

  • Plan for it. Make saving for vacation a priority. Set a little bit aside each month so that you have cash available before you go rather than charging everything and paying it off when you get home.
  • Set a vacation budget. Figure out what your desired vacation will cost, then divide that number by twelve to determine how much you need to save monthly to afford it. If you want to take a trip, you need to budget for it with a reasonable cost in mind.
  • Use a separate bank account. For those who finding saving tricky, designate a separate vacation account and have a small amount deposited to from each paycheck to make your savings goal.
  • Avoid falling for flash airfare sales. Sometimes the deal is just so good that you rush to whip out the credit card. However, even if the airfare is half the usual price or less, if you don’t have the money, you can’t afford it. When it sits on your card for months and interest charges pile on, will it still be a good deal?
  • Plan your vacation early. Start by picking a destination and then looking for travel deals for that area. LearnVest’s survey revealed that 75% of respondents said they were more likely to save up for a vacation to a place they really wanted to visit, as opposed to a place they were less interested in but chose because it was less expensive.
  • Cut back other expenses. One great way to be able to afford your vacation is to cut back on other leisure spending during the rest of the year. Spending less on shopping, restaurants, and other entertainment week after week will help you afford that big trip later.
  • Spend less. Many destinations have discounts, coupons, and other deals available if you do your homework. Take the time to research.

Another way to save on vacation is to drive to your destination. If you need a better car in order to do that, but your credit is keeping you from getting approved, CreditYes can help with our bad credit auto loan program! We can match you with a dealership in your area that will be with you every step of the way. Our service is fast and free. Fill out our secure online application and get behind the wheel of your next car today!



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