Financing Your Fun: Because Who Doesn't Love Paying Interest on a Margarita?
A vacation that is remembered by acquiring new monthly payments from credit card debt should be avoided as much as syphilis. A memorable vacation should include happy children, a smiling wife and/or an amazing experience.
36% of Americans planning vacations said they expect to take on debt to fund their trip. Of those, 26% said they will use a credit card and carry the balance over multiple billing cycles.
59% of travelers said they have gone into credit card debt from past trips.
8% of people who used credit cards to finance a vacation carry debt from the prior year's vacation.
Vacations are supposed to be relaxing, a time to make memories, possibly reassess your life goals, and return feeling refreshed and invigorated. If you are financing your fun, the opposite is true for you. Stress increases and the chain on your desk just got a little tighter.
Ways to avoid financing your fun:
1) Pay cash/debit for everything. Bring cash in an envelope and when it runs out you'll be forced to go for long walks on the beach and make sandcastles (all free) Recommended reading: An Old School Budget Hack that Actually Works
2) Go on a cheaper vacation. Not all vacations have to be at Disneyland or Jackson Hole. Not all vacations need to involve flights. Many adventures can be had within a day's worth of driving. There are numerous cool small towns throughout the world to explore. A week spent swimming in lakes, hiking, making smores over a campfire and falling asleep to loon's beats drowning yourself in cotton candy, Ubers, traffic, smelly public bathrooms and constant noise.
3) Focus on the physical. Hiking, swimming, running, biking, sex, and camping are all free. Plus, as a bonus you get fitter, healthier and happier.
4) Set a budget before leaving on your vacation. Include meals, excursions, flights, rental car, etc. There should be NO surprises on vacations when it comes to expenses. (the exception is an accident or health emergency). Surprises are excuses. If your budget is 5k for vacation, and you saved 5k, going into your vacation will feel like an actual vacation.
5) If you feel like having a seizure before swiping your credit card, most likely it's the wrong choice.
Financing your fun is a horrible decision. If your goal is to become wealthy, follow the steps above. Everyone deserves to go on vacation, but no one deserves to be paying it off for months after.
Suggested Reading:
Dear Johnny Q&A: I'm Tired of Being Broke, Where Do I Start?
Financial Advice to My 20-Year-Old Self.