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Planning a Debt-Free Vacation

Financial Planning

A vacation should be a time to relax, explore, and create lasting memories, not a financial burden that follows you home. Yet, according to a Bankrate survey, more than one in three (36 percent) are willing to go into debt to pay for it.1

The good news is that you can enjoy a fantastic trip without going into debt. Here are some tips for planning a debt-free vacation.

Set a Realistic Budget

Before choosing a destination, determine how much you can realistically afford to spend without going into debt. Consider all possible expenses, including the following:

  • Transportation
  • Lodging
  • Food
  • Activities
  • Extras (souvenirs, tips, emergency costs, etc.)

Some people suggest spending no more than 5 percent of your annual income on vacations. Once you set a budget, commit to sticking to it.

Start a Vacation Fund

If you don’t have the money for a trip right now, start saving in advance. A dedicated vacation fund will help you stay on track and avoid dipping into your emergency savings. Here are some tips to help you save for your next vacation:

  • Open a separate savings account and contribute a set amount each month via automatic transfer.
  • Use apps such as Acorns or Qapital to round up your purchases and save the difference.
  • Cut unnecessary expenses. Small sacrifices, such as skipping a few takeout meals or canceling unused subscriptions, can add up to hundreds of dollars over time.

Even saving $50 a month means you’ll have $600 a year—enough for a weekend getaway!

Choose an Affordable Destination

You don’t have to travel to expensive tourist hotspots for a great vacation. Many hidden gems offer incredible experiences for a fraction of the price. Check out national parks, smaller cities, and more affordable international destinations. Researching lesser-known locations can lead to a more unique and cost-effective trip.

Travel During the Off-Season

Timing can make a huge difference in travel costs. Flights, accommodations, and attractions are significantly cheaper during shoulder seasons (between peak and off-seasons).

For example, traveling to Europe in May or September instead of July can save you 30–50 percent on flights and hotels.2 The same applies to tropical locations; for example, visiting the Caribbean in the fall instead of the winter can save you hundreds of dollars.

Look for Deals and Discounts

Travel costs can add up quickly, but there are plenty of ways to save:

  • Use flight comparison sites such as Google Flights, Skyscanner, and Hopper.
  • Sign up for airline alerts. Airlines and travel sites often send promotions to subscribers.
  • If you have a travel rewards credit card, redeem points for flights or hotels.
  • Use discount sites such as Groupon, TravelZoo, and Secret Escapes to find deals on accommodations and activities.

By spending a little time researching, you can easily save hundreds—if not thousands—of dollars on your trip.

Consider Alternative Accommodations

Hotels can be expensive, but there are plenty of budget-friendly alternatives, such as these:

  • Vacation rentals, such as Airbnb (especially helpful for families or larger groups)
  • Hostels
  • House-sitting or home exchanges
  • Staying with friends or family

Accommodation is often the biggest expense after airfare, so being flexible about where you stay can save you a lot of money.

Cut Unnecessary Expenses

Of course, you want to have a great time while on vacation, but small expenses can add up quickly. Here are some tips to keep your spending in check:

  • If your accommodation has a kitchen, cook some meals to save money. A simple breakfast and lunch at home can save you $20–$50 a day.
  • Instead of renting a car or relying on Uber or taxis, use local buses, subways, or bikes.
  • Find free or low-cost attractions: Many cities offer free walking tours, parks, beaches, and museums with free admission days.

Use Credit Cards Wisely

Credit cards can be helpful if used responsibly, but they can also lead to vacation debt if not managed properly.

Charge only what you can afford to pay off immediately. Use travel rewards cards to earn cash back, airline miles, or hotel points. Look for cards with travel perks, such as no foreign transaction fees, free checked bags, or trip insurance.

If you’re worried about overspending, consider a prepaid travel card instead.

Plan and Prepay Where Possible

One of the best ways to stay on budget is to book and pay for major expenses in advance. Booking hotels and flights early can often lock in lower rates. The same is true for excursions, activities, and car rentals.

Paying in advance means fewer surprises and less temptation to overspend while on vacation.

Avoid Impulse Spending

Souvenirs, last-minute excursions, and unplanned meals can quickly derail your budget. Stay in control:

  • Set a spending limit for extras.
  • Instead of pricey trinkets, collect meaningful but inexpensive items, such as postcards or local crafts.
  • Say no to unnecessary upgrades.

A dream vacation doesn’t have to be a financial nightmare. By planning ahead, budgeting, and making smart choices, you can enjoy an unforgettable trip without coming home to a pile of debt.

  1. https://www.bankrate.com/credit-cards/news/survey-summer-vacation/
  2. https://www.travelandleisure.com/travel-tips/when-to-book-flights-for-cheapest-airfare

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.