I'm a Travel Expert: These 6 Moves Free You To Take a Debt-Free Vacation
Summer travel season is approaching fast. There’s no reason to doomscroll social media and dream of all the places you could visit if only you had the funds. With a little planning, you can enjoy a vacation without going into debt.
Create a Line-Item Budget So You Know How Much You Can Spend
Traveling without debt requires careful planning.
“We have clients break down every line item of an upcoming trip, including how they'll pay for it and how much they anticipate spending on each item,” said AJ Schneider, founder and financial coach at Beyond The Green Coaching.
Let’s Go! Create a Budget — And Actually Stick to It This Month
Find Out: 9 Unusual Ways To Make Extra Money (That Actually Work)
Line items may include food, excursions or attractions, ground transportation and even souvenirs plus new clothes and beauty treatments before the trip.
“People forget that they’ll want to buy things,” she said.
Save on a Schedule
Once you’ve set your budget, start saving.
“You can fund a $3,000 trip by setting aside $250 per month over one year,” said Evelyn Duran, sales manager at Ecuador & Galapagos Insiders.
She recommended using a savings app to track your progress visibly. Deposit it into a high-yield account or even a six-month CD to maximize interest.
Plan For Emergency Spending
Experts recommended an emergency savings buffer of 5% to 20% of your total trip costs. This extra money can help pay for areas where you underestimated the costs or travel emergencies like medical emergencies requiring copays, delayed flights that require airport food or even overnight hotel accommodations. These may be reimbursed, but you might have out-of-pocket expenses.
Book in Advance
Book flights and accommodations in advance so you won’t be surprised by the costs. Factor in checked luggage fees or stick with a carry-on bag.
Avoid room charges at the hotel, since these can quickly get out of control, leaving you with a surprise bill at check-out.
Use Envelopes To Budget
Several experts recommended the envelope method to budget. Once you’ve saved what you need, pull it out of your high-yield savings account and put cash in envelopes.
“When amounts within a category run out, stop spending in that area. This physical restriction prevents the invisible overspending that credit cards easily create,” Duran said.
Paying cash in restaurants and local stores in the U.S. may also save you 3% or more in service charges.
Not a fan of cash on the road? Look for a travel reward debit card that will earn cash back. You’ll want to use a budgeting app to track line items, and/or use multiple debit cards or a mobile wallet to track your spending.
For instance, you could use a debit card, PayPal wallet and Apple Cash to represent different spending categories.
Enjoy Free Experiences
If you’re on a trip and worrying about dwindling cash reserves, you can always revise your plans.
“Choose free experiences like hiking, hitting the beach or walking through neighborhoods rather than taking a paid tour,” Duran said. “In terms of food, opt for local marketplaces with big serving sizes and avoid restaurants in tourist areas.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion: