Incorporating vacation expenses into your budget throughout the year is effective in avoiding debt, but it is not always doable with a limited budget or unforeseen expenses.
When it does, the lack of a vacation spending strategy can leave you vulnerable to debt and overspending that delay financial goals. But it’s not too late to come up with a last minute plan to save money for the holidays.
The small year-end window can offer some time to make money moves to avoid getting stuck in a vacation debt hole.
Align your vacation budget with your financial goals
When determining how much to spend on vacation, start with your budget, says Jason Speciner, certified financial planner at Financial Planning Fort Collins.
“Start with how much money you’re willing to spend – and able to spend – on gifts, then work your list accordingly,” he says. “Don’t put the cart before the horse and end up spending too much because you’ve put dozens of people on your gift list. “
If your debt or budget doesn’t leave you room for holiday spending, plan to hang out with people through free holiday activities, give gifts, or save with a secret gift exchange. Set your expectations early by alerting people to your plans.
Adding to the debt pile while on vacation is expensive and takes longer to pay off. Develop a strategy to pay off any debt and prioritize high interest debt first.
With good credit, a balance transfer credit card allows you to transfer debt from a high interest credit card to a lower interest rate card. Interest-free, your monthly payments are applied directly to your balance, reducing your debt repayment time.
Take advantage of the favorable season for bonuses
If you are debt-free and are considering getting a new credit card, look for one with a signup bonus that may offer extra cash or rewards to cover vacation-related expenses.
Sign-up bonuses typically offer a three-month window to meet spending requirements, and they may be easier to achieve if you charge daily and vacation expenses.
Earn rewards with cash back apps
A cash back app can generate additional value on daily purchases. This may require uploading receipts, but for Krystal Sharp, coupon coach and blog creator Krys the Maximizer, it’s worth it.
She uses various apps to earn money or gift cards. These apps allow you to add in-store or online offers from select retailers and earn money on eligible items purchased.
Or you can download a receipt to take advantage of certain offers. You can also earn incentives by referring other people. For added value, Ms. Sharp uses a rewards credit card to make purchases and earn income.
“I try to focus a lot on how to earn gift cards, how do I get referrals, how can I save enough in store and use my in-store rewards to buy things we need for them. vacation, ”she said.
Save with a “no-expense challenge”
A sure-fire way to save money is to refrain from making unnecessary purchases for a certain period of time. You can try an expense-free month, expense-free weeks, or expense-free weekends, depending on your preference. The money saved can offset potential costs while on vacation.
For Courtney Clarke, a New York-based content creator at TheLifeOfCo The YouTube channel, a “No Spend November” helped her stay on track with her debt goals in 2020. For a month, she spent only the essentials, avoiding restaurant meals and activities that cost money.
“I certainly can’t say I was perfect at it, but it’s just a nice reset to retrain your brain,” Ms. Clarke says. “It’s just about making sure you’re trying to get the most out of it. “
She admits spending to eat out when there wasn’t enough time to prepare a meal, but even after getting lost occasionally, she still saved over $ 300 that month.
Start a secondary activity
Make money for the holidays by buying a side job now or decluttering your home. When it comes to working together, there are plenty of flexible side jobs you can do in your spare time. Or, if you’d rather save time, sell those dust-collecting items in your closet.
Update: October 20, 2021 4:00 a.m.