Avoid a Vacation Financial Hangover
As summer approaches, many of us start to gear up for fun and vacations! You might find yourself thinking about where you want to go during the warmer months, or contemplating which relaxing or exciting activities you want to try.
But before you plan the ideal summer vacation, you’ll need to ask yourself this important question: How much money can you afford to spend?
Sure, that question might feel like a buzzkill, but doesn’t have to be. In fact, it’s the key to avoiding a vacation hangover, or the dreadful feeling that comes with overspending on a vacation.
If your bank account and your vacation plans are out-of-synch, you could end up with a major vacation hangover that takes a toll on your finances (and your emotions). So Instead of breaking the bank with car rentals, new vacation outfits and fancy hotels, try a different approach this summer.
1. Set a realistic vacation budget
Before Googling pictures of white sand beaches or booking flights, check in with your budget.
If you don’t have any emergency savings, or if you’re struggling to pay off credit card debt, you might need to plan a vacation that costs little-to-no money. That might sound impossible, but here are some ways you can stretch out a small vacation budget:
- Visit family members and avoid a hotel.
- Travel during the off season.
- Look for a Groupon for discounted tickets to attractions.
- Use credit card rewards to cover flights or hotels.
- Plan a “staycation,” or a vacation where you stay close to home or just relax at home.
2. Research options near you
You don’t have to travel far to have a good time. And you don’t have to travel fancy either. In fact, think of some of your best memories of summer from the past. Do they involve staying in 5-star hotels? Being on first-class flights? Or do they involve simple joys like day trips to a lake or having a barbeque with friends and family? For most people, it’s the latter.
For an affordable experience you’ll remember for years to come, consider going to places and events you can visit without a flight, a rental car, or a big gas budget. That could include:
- A national or state park
- Museums
- Concerts
- A nearby lake or beach
- Other local attractions
3. Save on food and drinks
Dining out is expensive, and the cost adds up fast when you’re paying for multiple meals and snacks a day, especially if it’s for several family members, over the course of a few days or more.
Instead of dropping money on overpriced water bottles and low-quality theme park food, pack your own supplies. A loaf of bread and some meat or peanut butter can go a long way.
If you feel strongly about dining out, consider doing your research to plan one special meal at a local restaurant. For lower prices, look for a discounted lunch menu or happy hour menu.
4. Avoid using a credit card
Charging vacation expenses to a credit card is certainly convenient — and some purchases require a credit card — but using credit can become a problem fast.
For many people, the temptation of making last-minute vacation purchases on a credit card is too much to resist. With a credit card, it can even feel like you’re not actually spending real money. But you won’t feel that way when you look at your credit card balance later.
As a general rule of thumb, it’s always good to limit credit card purchases to the amount of money you already have saved for the purchase. That way, you can pay off your debt before the credit card payment is due and avoid expensive interest charges.
For souvenirs and other one-off expenses that pop up while you’re on vacation, plan to take a set amount of cash that won’t break your budget.