Are You Planning a Vacation That You Can’t Afford?

In the past, avid travelers had their favorite travel agent down the street with whom they could plan for vacations either one state over or around the world. Today’s vacation planning is primarily done via the internet.  With just the click of a button, you can impulsively plan dream vacations from the comfort of your bedroom. The lush photos and visitor endorsements are difficult to ignore. What must not, however, be ignored, is the cost of the vacation, it’s affordability and impact on your overall financial plan.

When planning a vacation, consider it’s affordability and impact on your overall financial plan.

People Take Debts to Pay for Vacations

The holiday cost situation is already very precarious. People take small to medium debts to pay for their vacations. About 74% of Americans have gone into debt to pay for a getaway, according to a study from LearnVest. The study, which surveyed 1,000 adults, showed on average, Americans take on about $1,100 in debt on their excursions. In addition, according to the study, 55% of Americans forget to even consider their vacation when laying out a budget for that year.

There is an always impulsive tinge about planning a vacation. We all get a kick out of flying away on a new adventure. Vacations evoke images of a happy paradise and people want that dream of a week or two of blissful R & R. As a result, many of us find ourselves sacrificing financial prudence for a week or so of fun. The truth is, the financial implications of not budgeting ahead are often far-reaching.  You might find yourself paying off that ‘great deal’ vacation for the next few months, or even years. Lesson to be learned? Set a budget and stick to it.

What Price is Too High for Wanderlust

The US hasn’t reached Germany’s level of vacation-crazy where people prioritize and spend more on holidays than cars. However, on average, as reported by VacationKids.com, the average US family vacation costs between 5-10% of your total income.  With this in mind, if your income is $80,000 per year then your yearly family vacation budget should average between $4,000-$8,000.

How to Rein in Your Vacation Budget

Travel and wanderlust is exciting. Many feel that the best memories are not material things, but are experiential. A hop into the infinity pool in Singapore, a tropical paradise in Thailand or Malaysia, a skiing tour in Switzerland…there is a lot of beauty to explore in the world. However, don’t  do it at the expense of your long-term financial security.

There are plenty of ways to rein in that budget and realign it with what you can afford based on your current income. If you are financially stressed because of your travel spending, here are some tips on how you can plan vacations that you can afford:

Plan and Start Saving as Early as Possible

Vacations can be quite costly.  Begin saving for them: the earlier you start saving, the less ‘bite’ you’ll notice.  You can automate your savings process with a bank, or, even create a piggy bank or savings jar where you can stash away some cash to pay for your vacation. Just be sure not to spend it on anything else.

Saving over the long-term works wonders because our incomes are limited and it is usually difficult to raise a hefty sum all at once. It is a more gradual process. The impact of your disciplined savings will become apparent after a few months. Start with small goals and soon enough, you will be realizing larger ones.

Bargain Hunt

Bargain tours save a lot of money. Just make sure that the ‘bargain price’ is a bargain to your budget!

Take time to search the internet for flight and accommodation offers that you can take advantage of. The availability of these may depend on the time of travel and luck. Some travel providers offer generous deals at certain times such as during off peak travel seasons.

Cut Back on the Discretionary Spending to Pay for Vacations

If you are saving for vacation, you can cut down on some of your discretionary spending and put the money into savings. Consider reducing some aspects of your social life over the short term to fund the trip of a lifetime.

Dreaming of vacationing in an exotic destination can be quite alluring, especially if we forget the financial implications of taking a luxurious holiday. However, with a little planning and budgeting on your part, even the costliest of vacations can be within reach.

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.