How to Balance Travel When You’re in DebtJun 01, 2018
Suns out, it’s summer…but you’re in debt. What next? You may get many opinions about whether or not you should prioritize leisurely activities while carrying a debt balance, but there are often more factors to consider. For instance, the type of debt you’re carrying, how you’re managing your debt(s) and whether you’re able to meet all your other financial responsibilities. Only you can make that call, but you definitely should weigh it out beforehand.
How to strike a balance between wants and needs
Of course a summer vacation isn’t a need, but if you’re sacrificing in other areas in order to afford a trip, why not? Christine Drummond from The Wallet Diet says this about traveling when in debt: “Some girls can’t live without shoes. I can’t live without travel. It’s super important to me so I find a way to make it possible. This usually means I spend less on other life luxuries (getting my hair done, dining out at restaurants, etc.) to save up for my annual vacation.”
This strategy can apply to anything that may seem frivolous to some, as long as you are able to offset the costs overall. That means:
- Not incurring extra debt in order to travel. Your debt balances should feel manageable and not pressing.
- You’re carrying more good debt than bad. Student debts are good debts and often have simple fixed monthly payments. However, credit card debts can be bad debts, especially as interest rates rise, which could make it harder to pay back.
- Not putting off financial responsibilities or long-term goals in order to fund a vacation.
How to fit travel goals into your budget
Before you start planning a travel itinerary, you need to make sure your finances are in order. Here are some ways to keep your budget balanced in order to afford travel:
- Don’t sacrifice necessities – Debt repayment, monthly bills, groceries, savings and transportation are necessities. Don’t sacrifice any of these categories in order to make room for a short term goal.
- Treat your goals like a bill – Each month, after everything is paid, delegate a certain amount toward your travel fund, or any goal you have in mind. You can set it up as a direct withdrawal into a savings account or you can go old school and add it to a jar in cash.
- Be honest about what you can afford – If your bills are pressing and your debt balance is bulging, a vacation will add to your stress instead of relieve it. Delay your vacation until you can comfortably afford to save up enough money, get on top of your finances and travel without the guilt.
- Deal with existing debt – When you’re fighting an uphill battle against high debt balances, it’s time to change your strategy. This might mean looking at your debt relief options such as consolidation or credit counselling services. Or, you can book a free consultation with an LIT to go over everything and find a solution that works for you.
- Get thrifty – Even when you have the money to travel, you should still find ways to save a buck. Do your homework ahead of time so you can weigh out what you want to spend money on and which areas you can compromise.
Millennials report that they prioritize travel over savings, which can lead to debt, unmet milestones or delayed life goals. Instead, practice the above strategies so you’re able to cover all your bases while still allowing yourself to travel – guilt free!