Have you taken a vacation this year? A good relaxing vacation is such a great way to have fun doing some of the things you may not normally get to do, to reconnect with the family, and not worry about the outside world for awhile. Maybe you even got to see the world’s biggest ball of yarn while you were thereBut what happens when you get back? Are you rested and refreshed, ready to get back to the working world, or does that worry in the back of your subconscious kick in and start saying “My God, how much do we owe for that vacation we just took?”Vacation Hangover
Maybe you took a really nice vacation at an upscale resort, or a smaller and cheaper one close to home since times are tight. But if you’re like most people, you put most or all of that wonderful vacation on a credit card and now its payback time. When you use credit to take a vacation it can have a huge effect on your finances even for years to come. A holiday can really become expensive even if it wasn’t that expensive to begin with (more on that later).
For a one week vacation at the beach it’s very easy to spend well over $1,000 (even on the cheap side) for a hotel room(s) or a condo depending on the size of your family. Add in room for Gramma Schwartz and maybe your son’s pimply friend that he just had to bring along and the cost is even more. Add food for the whole crew to that. Then come the activities (Touring the national yarn museum) that are rarely cheap. In the end you have spent at LEAST a couple thousand dollars for a weeklong vacation.
So now, on top of the credit card debt you already had, there is a vacation added to the pile and that little sick feeling is starting to kick in. Is the stress of trying to get that paid off negating the de-stressing effects of the vacation? It’s not a good feeling I know.
When you use credit to purchase anything, there are a few things that happen that you may not realize. Using a credit card is such a frictionless way to pay for things that you end up buying more than if you had just paid cash. It’s so easy to use that you end up spending on average 12% more on each purchase and in the end, after interest and fees, the average credit card purchase ends up costing 112% more than the original purchase.
Is it really worth it to pay all that extra hard earned money to the credit card company for the privilege of using their money to go on vacation? I don’t think it is.
Here’s a good way to pay cash for your vacation every year:
- First, decide how much you want to spend for next year’s vacation including gas or airfare, food, lodging, activities, etc.
- Next, divide that number by 12 and begin putting a monthly installment into a bank account.
- When it comes time to book the vacation you will have money in the bank to pay for it. You take the remaining cash with you to cover food, expenses, etc.
- You come home from your vacation rested, relaxed, and free from the worry (a “vacation hangover”) of how you are going to pay for it.
- Then you start the process again for the next vacation.
It’s a very simple process but it never ceases to amaze me how few people do it this way and then live a life full of money stress the other 51 weeks of the year because they are constantly worried about their debts.
I am going to keep repeating this till everyone in the world gets it. You CAN be debt free! Just educate yourself, change your mindset, make a plan, and stick to it and you’ll never suffer from a vacation hangover again!
Question: Have you ever suffered from a vacation hangover? How do you pay for your vacations?
Please leave your comments!