There are many useful tactics you can employ in order to pay off your vacation debt. But the one thing you can do to limit debt even before you start planning a vacation is to lower your expectations. Don’t think five days four nights in Hawaii if you know you really can’t afford it. That’s just asking for trouble. After all, you have airfare, rental car, hotel rooms, and a host of other costs that may end up on your credit card. When it’s all said and done, you’ll be paying off your vacation debt for years.
Use these useful tips to prevent yourself from falling farther into debt and to help pay off your vacation.
Save in advance: Create a vacation fund and have the whole family pitch in each week. You can save change or cut out costs by not going out to eat or ordering takeout. Once you collect all the money saved, you can use it to pay for expenses that you incur during your vacation.
Credit card debt: If you have a few credit cards with accumulated debt from your vacation, start paying off the cards with the highest interest rates first. That way you’ll be saving money on interest and paying down your debt simultaneously.
Minimum payments: It’s tempting to only make the minimum payments on your credit card debt because it seems like your saving money. But in reality you’re costing yourself more money because the interest keeps accumulating and your balance never really gets paid off. Make more than the minimum payment and pay off your debt quickly and efficiently.
Debt management program: If you are in severe debt and don’t see yourself able to get out any time soon, you might be a candidate for a debt management program. Look for a credible, non-profit credit counselling agency that offers such programs and talk to a trained counsellor regarding your financial situation. At most companies, such as Consolidated Credit Counseling Services of Canada, Inc., they may be able to set up a program that will enable you to pay down your debt.
Budget: You can avoid hefty bills and continuing debt by using more cash on your vacation. One way to do that is to budget. Create a line item in your household budget for vacations and save year-round. If you don’t have the extra money, then cut spending in other areas of the budget. Cancel your gym membership, don’t go to the movies as often, make dinner at home and save on the restaurant bills.
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