5 Ways to Vacation Debt-Free

Published April 2021
Vacation Debt-Free

Vacations should be about relaxation and the stress-free enjoyment of the moment. But how can you relax and live in the moment if you charge your trip to a credit card and have to worry about how you’re going to pay for it as soon as you get back?

Key Points

  • Set up a savings account and save up for your debt-free, stress-free vacation.
  • Create a budget for your vacation once you know your destination.
  • Research your destination and book your vacation on time.
  • Use gift cards and cash to head off impulse shopping. 

A debt-free vacation is a much better alternative. Imagine enjoying your vacation to the fullest and then coming home, not to a stack of credit card bills, but to a nice set of memories to treasure for a lifetime. It’s possible, if you take a few positive financial steps first. 

Step 1. Set Up a Dedicated Savings Account 

Your first step is to set up a savings account for your vacations. You do not have to know your next destination to begin saving for it. If you like to vacation regularly, make it a part of your regular budget and include it in your money management goals. Living below your means will give you some disposable income you can use the way you see fit. 

Determine the percentage of your disposable income that you want to allocate for a vacation and deposit the funds in the proper account. You do not have to save up large sums of money. Every little bit adds up, and by the time vacation season comes around, you will have your trip covered. 

If you already know your destination, check to see if it has a savings plan of its own. Some destinations support such savings plans, rewarding you for saving for your vacation. 

Plan and Budget Ahead 

Once you know the destination of your next vacation, you can draw up a budget and do some planning. 

Make sure that your vacation budget covers all the essentials such as: 

  • Accommodations
  • Food
  • Various vacation-related activities, such as local trips, tickets for venues and attractions, etc.
  • Transportation, including local bus/cab
  • Emergencies (It never hurts to pad your vacation fund just in case something unexpected happens.)

When planning your budget, do not forget to research your destination thoroughly. There is plenty of information on discounts, money-saving opportunities, and the value the local attractions deliver. 

Try to find feedback from other tourists about the local points of interest you plan to visit. Price-shop every possible option, from vacation packages to individual arrangements. 

Book Your Vacation Early 

For the best value, you should book your vacation as far in advance of your planned dates as possible. Deciding on something spontaneously and booking the trip just a few weeks in advance will set you back considerably. 

Such a course of action may upend your vacation budget and saddle you with credit card debt. To keep your money management goals on track, book your vacation at least three months in advance. A 2018 study concluded that the optimal time to buy your plane tickets is 70 days in advance. 

Consider Travel Insurance 

To some, travel insurance may seem like an unnecessary expense, but in some cases, it can really pay off. NerdWallet provides this advice for travelers: “There are two situations in which travel insurance can be worthwhile: to protect your trip and to protect your health. If you prepaid for your trip and cannot cancel without penalty, travel insurance is probably a good idea. If your trip is canceled or interrupted for a covered reason, this protection will cover your reservations.” 

Regarding protecting your health, while many U.S.-based health insurance policies will pay for medical expenses when you’re traveling anywhere in the U.S., some will not pay if you incur medical expenses while you’re traveling internationally. In that case, travel insurance may help you cover the cost of medical care.

To determine whether you need insurance or not, consider the following factors. 

  • Your geographic destination and its reputation
  • Cancellation policy
  • Your risk tolerance

Excited woman holding an envelope

Use Gift Cards and Cash to Stick to Your Money Management Goals 

Gift cards and cash do not let you overspend. They are palpable and have a fixed value. They do not give you access to additional funds. By using these payment methods, you can overcome any impulse shopping urges and save money. 

You can take other steps to ensure the debt-free status of your vacation. 

  • Stay with friends and family if possible.
  • Do not buy souvenirs impulsively. Plan and consider your options. Avoid tourist hotspots, where items are often marked up considerably.
  • If you eat out, do not be too shy to request a doggie bag for your leftovers.
  • Bring your own water bottles and snack food from home. 

It makes no financial sense to go into debt to enjoy a vacation. With some good advance planning, you can enjoy a great vacation completely debt-free.

If you find yourself buried in credit card debt, however, do not hesitate to get credit card debt relief. Contact a ClearOne Advantage Certified Debt Specialist at 866-481-1597 to learn what your credit card relief options are and get a free savings estimate today.

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Topics: Financial Education