Among the highlights to look forward to in the summer season is that of travel and leisure. Especially so in the month of July, vacationing seems to bring about a sense of freedom that rejuvenates our spirits, rekindles our relationships, and re-establishes family bonds. However, in doing so it’s also very easy to create a sense of post-travel remorse by overspending your budget and not being intentional in your financial planning. As with any other life activity that affects your budget, the key to enjoying your summer vacation plans is to be financially proactive instead of taking a reactive approach. Below are some of the key strategies that can be used to help keep your budget in tact while you enjoy traveling this the summer season.
#1) Start A Vacation Fund
Building up a vacation fund may seem like a difficult task to juggle among all of life’s other financial priorities. But the fact is that having such a fund forces you to think proactively in the context of coming up with your summer vacation plans. And similar to any other savings account (i.e. an emergency-fund), putting away small amounts consistently will ultimately add up to a significant balance over time. So the key to managing a successful vacation fund is to figure what monthly amount you can reasonably commit to without compromising your budgeted fixed & discretionary expenses. And if you’re not sure that your current monthly budget will allow for any additional savings try starting out with a nominal amount such as $25 each paycheck. As you get more comfortable you can then increase the amount every month or quarter. Eventually you may even want to consider the pros & cons of purchasing a time-share plan that will ultimately provide you with vacation ownership.
#2) Pay For Anything You Borrow In Full & On Time
Booking a vacation is often more convenient to accomplish by swiping your credit card or opening a new line of credit. Therefore it’s no coincidence that everyone from airline companies to car rental agencies are lined up waiting to offer financial incentives if you borrow the necessary funds to go on vacation. So depending on how well you’ve maintained your credit history, be very cautious as to whether this is in your best interest financially. The key thing to remember here is that any vacation expenses paid for with credit should always be repaid on-time without carrying a monthly balance. That’s because nearly two-thirds of your credit score is determined by payment history (35%) and credit utilization (30%). Therefore, you should never allow any short term credit promotion or financial incentive to damage your credit simply to take a vacation. And if you’re not totally sure you can repay what you’re planning to borrow, the best solution is to just save up and pay cash instead.
#3) Consider A Side-Hustle For Additional Funds
Because of the unexpected expenses that tend to pop up on vacation it’s generally best to have some extra funds coming in beforehand. One advantage of having this separate source of income available is that it helps keep your normal budgeting plans in tact. This is turn allows you to continue working toward your same financial goals aside from taking a summer vacation. But the bigger advantage may just be that you can vacation with peace of mind knowing that you have a little extra income to cushion the blow of your travel expenses.
The true blessing in taking a vacation is not just the sightseeing, but the ability to enjoy your time away from home. This mentally allows you to push the reset button so you can come back rejuvenated and ready to tackle life’s goals with greater productivity. With this in mind, the best way to maximize your vacation plans is to prepare in advance so that you can alleviate any potential financial stress in the process. By doing this you can truly enjoy traveling while building the kind of memories that will last your entire lifetime.