Guest Post: We have a guest post today from Amy Nickson, a web enthusiast who completed her graduation from Oglethorpe University, Atlanta, Georgia. She works as a financial writer and she shares her expertise through her crisp and well researched articles based on money management, money saving ideas, debt, and so on. You can read some of her other articles here.
If you asked me the same question 2 years back, my answer would have been “NO”. Why? Because traveling was one of the main reasons for my debt. After realizing that I was in utter financial trouble, I had totally stopped traveling not to waste money anymore.
Like me, many people would say traveling while in debt reflects the irresponsible nature of a person.
But is that really true?
Now, I am free from the evil credit card debts, but not totally debt free as I have some student loans to pay off.
And how do I think now? Well, I think, it is possible to plan a trip while in debt.
Read the entire article to know the answer.
1. Depriving yourself of fun is demotivating
It could take quite a long span to pay off a big debt load. If you deprive yourself of fun throughout a long time, you may lose interest towards the debt payoff goal.
In my case, I had stopped doing anything that was related to extra spending. It was difficult to deprive yourself from everything all the time, but I was rigid. Sometimes, it felt unsustainable. So, this time, when I am planning to pay off my student loan debt, I am more flexible than before.
Now I am following a healthy budget focused on saving and have some room for fun, too.
I love traveling; so I save some amount every month to organize a small and refreshing trip once or twice a year. I repeat “small trip”, not a luxurious one!
2. Track your bank account before planning a trip
What I do now is planning, planning, and planning. But don’t plan only for what to wear or where to stay, think whether or not you have enough cash to pay for all expenses during the traveling. Remember, using a credit card to fund your trip is the biggest boo-boo. Don’t accumulate more debt just to travel.
Travel to de-stress yourself, not to gather additional financial stress.
Once you are confident that you have enough cash in your bank, create a separate budget for the trip and stick to it. Thus, you can avoid accumulating debt even if you use a credit card. Make sure you pay the balance within the period.
3. Don’t ignore the debt repayment plan you’re following
Don’t skip any single debt payment just because you’re planning a trip. Keep making your monthly debt payments. After doing so, if you can’t afford the trip, then simply drop the plan for travel. Or, set aside a portion of the money to travel later.
If you are still not sure what debt repayment plan to follow, then you’re probably not ready for a travel. Your first priority should be your debt. Track your debts and figure out how to pay them off.
4. Set up separate savings account
Keeping a separate savings account is helpful for a person who is in debt but wants to travel. How? Separate savings account dedicated to fund a trip helps to understand whether or not you have enough money for it. Another account, which is for debt repayment, will show you whether or not you have money for making the next debt payment.
Separate savings accounts help you to understand your willingness.
5. Find out about interest-rate free debt
Paying off debt is not easy. Debts are rigid; the interest rate increases the total debt amount. If you don’t have any options than taking out a loan, then consider interest-free debt.
If you want to fund your studies, then try to consider government student loan programs that are interest free, or, find out govt. grants. If the rooftop of your home needs a major improvement or the entire home needs a renovation, then find out low-interest rate loan or loan from family members or friends. Don’t take out payday loans. Usually, payday loans come with higher interest rate and you may get trapped into tribal payday loan debt as well. Better not to take out a payday loan.
6. Seek professional help when you feel like
It is not mandatory that everyone should know about all the ways to pay off debt. If you ask me, then I will agree with this statement, because when I was in horrible debt problem, I was totally a novice in term of handling money and debt.
One of my friends who has knowledge on finance had helped me to understand financial puzzles. I read a lot of personal finance articles based on debt story. I took professional help as well.
So, if you think you can’t manage your debt, then don’t hesitate to consider professional help. Seek credit counseling to understand how to create a budget focusing on debt repayment while considering a trip. The counselor will guide you as per your income and debt amount. If the counselor thinks that you can’t manage your debt by yourself, then he/she will also suggest you the best debt management service as well.
7. Be open for some lifestyle changes
Don’t assume that you can still live a lavish lifestyle while in debt. If you do so, you will be in serious financial trouble shortly. It is wise to accept the fact that you have debt and the situation requires some lifestyle changes. I am not saying to make major changes; you just need to reduce some practices like making unnecessary expenses, planning random trips, frequent eating out, and excessive use of credit cards.
While in debt, your main target should be to get out of it as soon as possible. Otherwise, the debt will spoil your financial life. It will hit your credit score majorly; you may get a rejection for a loan, even rent.
So, learn from your mistakes and build some good financial habits to stay financially blessed. You will see that you can still enjoy your life. A healthy financial life includes planning a trip and having fun. You just need to organize your money as per the priorities.
Lastly, I will suggest you not to stop earning extra money just because you’re on a trip. You may require some extra earning to pay off your debt. Yes, a side hustle works great to pay off debt fast. But, if you’re planning for the trip when in debt, don’t stop working. Try to continue the job while traveling.
How? If you’re doing an online job, then carry a computer and finish your job at any time when you’re free. If you’re doing a part-time job, then ask your employer to give a project that you can finish while on a trip. I know it may not be possible, but you should try your best to keep earning money while traveling. Thus, you can make debt payments as much as possible without worrying about the post travel financial problem.
Max: I chose to include this guest post from Amy because I thought it was an interesting subject. I’ve noticed that it’s become very common for people to take vacations despite being in debt. By debt I mean the credit card or student loan kind. The concept of delayed gratification is becoming less prominent in our culture.
As Amy points out, I don’t think people should deprive themselves of fun, but they also shouldn’t behave as if fun is an entitlement. I certainly wouldn’t spend $600 on a lavish dinner if I was carrying around debt obligations. The easiest way to ensure financial goals are not met is to consistently rationalize poor choices. Don’t be fooled, debt is not a good thing. As I’ve said before, you’re not truly free unless you’re debt free!
Readers, do you prioritize debt repayments over travel? What are some ways to enjoy traveling despite being in debt? Any other experiences related to travel and debt you’d like to share with others? Please leave your comments and thoughts below!