Summer is almost here! Warmer weather and the end of school signals summer get aways. Vacations are always something to look forward to and makes budgeting all year worth it! But summer vacations can take a toll on your finances. Take a look at these tips to make a vacation possible without having to derail your financial plans. Making your trip the most affordable but still enjoyable should be your goal!
If you are able to pack your own food do it. Bring some snacks, make some meals like sandwiches for the drive to your destination, and instead of eating out all the time go to the store and create your own meals once you get there. Research AirBnB’s that may be cheaper than a hotel for a couple of days. This may help cut down cost while still enjoying destination.
Don’t risk taking your credit card along. You will be tempted to use it. This will increase the chance that the vacation will cost more than you budgeted for. Use cash for purchases to keep you in budget. Paying off credit card bill will be like a hangover after your vacation because of the added interest rates. If it takes years to pay off you may end up spending twice as much for the trip.
Some may be tempted to use their 401(k) or IRA but don’t touch your 401(k) or IRA to pay for your vacation. You will pay taxes when withdrawing plus, you will have to pay a 10% penalty fee for the early withdraw. If you leave the money in your account you are able to keep it growing and earn more money on it. By taking out your money early for a vacation you are only hurting your future self.
Making and sticking to a budget can be difficult. It’s never too early to start saving for a vacation. If you didn’t plan in advanced for this summer start now for next summer. Overspending on vacation is easy to do if you don’t have a plan. Have you been budgeting every month to set aside money for your vacation? Creating a new savings account dedicated to your vacation goals will remove the temptation to spend it on other things. Take a look to see how much you will spend on food, rooms, activities, and incidentals. Make sure that you have saved enough over the months to cover the costs. If you are needing help or want to know the options on a budget that will work best for you Credit Advisors Foundation is here. Our counselors can make a budget and help you along the way toward your vacation and becoming debt free!
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