Going on vacation is a great way to nurture your physical and emotional wellbeing. Traveling during the summer is a rite of passage for many families looking to get away, spend time connecting with each other in new settings and explore new destinations. A vacation, however, may be the last thing on your mind when you’re working to pay off debt.
Summer vacations can be expensive. And if you’re in debt, that may leave you wondering if travel is a justifiable expense. Here are a few things to keep in mind when balancing travel and paying off debt.
The case for going on vacation when in debt
Paying off debt requires sacrifice. But debt repayment doesn’t necessarily require sacrificing everything.
Giving up some expenses may have little impact on your overall mental health, such as that subscription you don’t use or getting lunch out every day. Vacation, on the other hand, can have a significant impact on your wellbeing:
• It helps you reduce stress.
• It helps you connect and become closer with your family.
• It makes you more productive.
• It makes you happier.
Although killing debt is an important undertaking, you must consider the impact forgoing vacation may have.
“Paying off debt is definitely a worthy goal. But it shouldn’t take precedence over everything a family does,” says Timothy Wiedman, doctor of business administration and professor at Doane College.
Assuming you have control over your debt, a summer vacation may be the best thing to do for you and your family. This is especially the case if you haven’t enjoyed a concentrated amount of time together as a family in recent memory.
“In the long run, skipping a summer vacation to reduce one’s debt load probably makes little sense,” says Wiedman, pointing out why you should consider travel, even when in debt.
The case against going on vacation when in debt
Travel is often quite expensive. And it’s easy to incur additional costs that you weren’t planning on, making it difficult to stay on budget. If you have high-interest debt, this may worsen your debt load.
“If you’re somebody who’s managing high-interest rates and unmanageable payments, it might be wise to hold off on a vacation until you can get your payments under control,” says Jennifer McDermott, consumer advocate with Finder.com.
Bringing additional debt into your life can make debt freedom that much more difficult, not to mention impact other things like your credit score. If incurring additional debt when on vacation would significantly worsen your situation, it may be best to avoid travel until you have things under control.
Let wisdom be your guide
There’s no clear-cut guide — aside from having maxed-out credit cards — on whether or not you should travel when paying off debt. You need to live your life and travel may a very important part of that. Look at your particular situation and judge how a vacation will benefit you from a health perspective, as well as a family.
“As long as you responsibly manage your debt and a vacation won’t push you three steps back, debt shouldn’t hold you back from taking time for yourself,” says McDermott. Assuming you have your payments under control and a clear path to full repayment, there’s no reason why travel shouldn’t be considered.
How to save on vacation costs this summer
It’s easy for travel costs to get out of hand with no planning. In fact, Americans spend, on average, 10% of their annual income on vacations. Spending this much might be ruinous when paying off debt.
You don’t have to spend a lot of money on vacation to enjoy your time as a family. Here are some ways to save on travel this summer without skimping on the fun:
• Stay somewhere local. Airfare can get expensive, so pick a destination that you can get to with just one tank of gas.
• Watch out for food costs. Instead of eating out for each meal, bring a cooler so you can have breakfast and lunch on the road.
• Rent a house instead of staying at a hotel. Staying in a hotel often means eating dinners out. When you rent, you may be able to make dinners at the rental.
• Look for free or low-cost activities. Consider going to the beach or a state park to help keep costs down.
• Take a shorter trip. Going on a long vacation is fun but may not be feasible given your financial situation. Instead of going for a week, consider shortening it to four or five days.
There are many other ways to save on vacation. Be creative and think outside the box to find savings. Ultimately, the amount spent doesn’t always equate to more enjoyment.
Going on vacation when paying off debt can be a challenge. With a little wisdom and creativity, you can enjoy a getaway that won’t deter your goal of debt freedom.