Everyone deserves a vacation, but when you are in debt spending money on a vacation might feel impossible. The first thing you need to do is to ask yourself if you can travel while in debt, and if so then can you begin making a budget?
Traveling While in Debt
The first thing you need to ask yourself is whether or not you can afford to go traveling while simultaneously paying off your debt. Of course, you can travel, but in some cases, it may put you further into debt.
Everyone wants to be able to enjoy life. Constantly working to pay bills isn’t exactly fun. Nevertheless, while you can take a vacation and just put it on a credit card, it is important to evaluate whether or not you can truly afford it.
Going into debt is not as uncommon as you might think. In fact, in 2021 a survey found that 45% of millennials had taken on debt to go on a summer vacation at some point in their lives and would do it again. Additionally, about 23% said that they had never done it but would be open to it. While going into debt for a vacation may be reasonable for some people, if you are already in debt, putting yourself further into a hole might not be the best idea.
However, going on vacation while in debt doesn’t have to mean that you put yourself deeper into debt. It is perfectly possible to save money for a vacation while simultaneously paying off your debt. When already dealing with a mortgage or student loan, adding a credit card bill to that can make it much harder to become debt free. You certainly don’t want to go into bankruptcy over just one trip.
Instead, here are some tips for determining whether you can afford to go into debt for a vacation and how.
Evaluate Your Circumstances
The first thing you should do before deciding to go on vacation is to evaluate your circumstances and see what your options would be. First, determine exactly how much debt you have, and how much longer it is going to take for you to pay it off. If you’re used to going on vacations in your private jet which is in danger of getting repossessed, you may consider meeting with an airplane repo attorney for legal advice.
In an ideal situation, you would pay off your debt, then take a vacation. However, for many people, this isn’t an option. If you don’t already have a payment plan in place, now is the time to make one.
Having a payment plan, or several payment plans is essential for determining whether or not you can afford to go on a vacation. For example, a payment plan could be the amount of money you need to put toward your debt to pay it all off in a year. Your payment plan can also include a portion of your savings, whether this is in general or for a vacation. If you allot a certain amount of your income towards saving for a vacation, it may now take you three years to pay off all of your debt.
Keep in mind that the longer you leave your debt unpaid, the more interest you will end up paying in the long run. If you are okay with this you can begin budgeting for your vacation.
Create a Budget
Budgeting for a vacation while in debt is just like budgeting for anything else, except this time your income after bills and necessities will have to be split between your savings and your debt. Ultimately it is up to you to determine how much you want to save and how much you want to put toward your debt. If going on a vacation is more important to you than paying your debt off earlier, you can make the minimum payments and put the rest towards your savings.
However, if you want to continue paying off your debt while saving, you’ll want to put a little bit more toward your debt payments than the minimum. No matter what you decide to do, make sure to calculate how long it is going to take you to reach all of your goals. If you plan on saving make sure you understand how much longer that is going to set you back from paying off all of your debt and reevaluate whether it is still worth it.
Roni Davis is a writer, blogger, and legal assistant operating out of the greater Philadelphia area. She writes for Medford Leas, a retirement community in Medford, NJ.