Don’t go into debt during vacation
By April Lewis-Parks
The week before vacation you can already feel the summer breeze and you may even be packed and ready to go. But before you say “Sayonara!” to work for a few days, there is still one chore you have to take care of: creating your vacation budget.
The words “vacation” and “budget” seem like an unlikely pair, and worrying about money when you’re supposed to be relaxing may be the last thing on your mind. However, coming back rested and relaxed will mean nothing when faced with a huge credit card bill and depleted checking account upon your return.
To ensure that you spend wisely and avoid breaking the bank on vacation, take these steps to discipline your spending:
1. Pay with cash
Several studies show that parting with your hard-earned cash creates an almost physically painful response in consumers, which makes you reevaluate your purchases. This is not to say that you can’t buy a new sundress or indulge in a sinful chocolate dessert each night of your trip. But it does mean that by paying with cash, you may be more mindful about which purchases and activities are priorities on your trip. As an added bonus, paying with cash will allow you to avoid those pesky foreign transaction fees charged by credit card companies.
2. Plan your activities in advance
When traveling across Europe, taking a cruise, or visiting an island resort you will be faced with an endless number of activities and excursions. Deciding beforehand which activities are more cost-effective, but still adventurous, can help you plan ahead and decide on fun events that fall in line with your budget.
3. Place a credit card spending limit
In some instances, it makes sense to pay with a credit card. For example, you may need your card to make reservations, book activities and pay for dinner. However, setting a limit on how much you plan to spend during the trip can help keep your purchases at back. Keep track of receipts to make sure you are still on target. Don’t forget to take your current credit card balance into consideration when setting a spending limit. This can help ensure that upon your return, you are able to stick to your regular budget and avoid overextending your finances.