How to Travel and Avoid New DebtJun 27, 2018
Whether you have a trip planned or in the midst of deciding on a summer vacation destination, this podcast episode is worth your time. Listen as our Licensed Insolvency Trustees (LITs) talk travel and debt. Get answers and advice to questions including:
- Should you travel when you’re in debt?
- What should you consider financially when you’re planning a vacation?
- What is the advice for people who are tempted to blow the budget on a once-in-a-lifetime trip?
- How to return home from a trip without adding to your debt load?
For the rest of this blog we’re going to focus on that last question. So you’ve taken the plunge to travel while carrying debt. What’s your best strategy for keeping your finances on track?
- Do your research
The cost of travelling can vary widely depending on:
- Where in the world you’re going
- Currency exchange rates
- Type of accommodation
- Time of year
- Your desired activities
Take the time to research your dream trip in its entirety so you understand what the financial obligation of this trip will be. Don’t forget to include costs of food, items you may need to buy before you leave, passport and visa fees, etc. The website Money We Have offers good advice and tips on budgeting for a trip.
Once you’ve done your research you’ll have a very strong indication of how much the trip will cost. Now you can move onto the next phase.
- Put together a travel budget
Travelling with debt? Prioritize cash over credit throughout every phase of your trip. This means you may need to postpone and save up for your trip.
This 50/20/30 budget guideline can help you prioritize travel saving without sacrificing retirement and emergency savings.
How much you need will be dependent on how much your trip will cost and what you can afford to set aside. Remember, saving for a trip shouldn’t come at the expense of your effort to reduce debt.
- Track your expenses
It’s easy to lose sight of what you’re spending while you’re on vacation — and that can mean going over budget and taking on new debt. The best way to prevent this is to get a budgeting app. Set a spending budget while you’re away and use the app to help you stick to it. This will be your best tool to help you return home without a bigger debt load.