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How to Vacation without Going into Debt

Paying cash means that the only things you’ll have following you home are memories and a sunburn. Planning ahead will allow you to pay for that vacation before you take it. Vacations are a lot more fun when you know you aren’t ruining your finances to take them.

How to Vacation without Going into DebtVacations, whether on a local beach or exotic foreign city, are important rewards. Getaways both motivate and rejuvenate, and after a year of hard work, we deserve it.

Unfortunately, what we deserve and what we can afford can be two entirely different things. Here are six ways to save on your next vacation, so you don’t have to say: “I’ll have another Mai Tai and $623.94 in finance charges, please.”

Start Saving Now

Even if your vacation is a year away, now is the time to start putting some cash aside. Start a separate savings account just for your travel fund and add $100 – $200 a month.

Online savings banks make this easy, often giving you the option of creating several accounts with different designations for no charge.

Book in Advance

The sooner you purchase your airfare and reserve your hotel rooms, the more you will save. Not only will you get advance-purchase rates, you will also divide up the total cost of the vacation, paying for some of it now (airfare, for example), meaning you will have greater financial flexibility as the actual trip draws near.

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Create a Vacation Budget

It’s dangerous to take off for paradise without having an idea of how much you are able to spend on your trip. While it’s good to have an overall cap on your vacation spending (say $1,500 or $2,000), you’ll also want an idea of where that money will go. If $400 of your $1,500 went to airfare and another $500 will go to your hotel, how will you spend the rest of your $600?

Will you eat cheaply and spend the rest on local tours and transportation, or stay in one spot and splurge on nice meals? Don’t forget to add in the costs of gratuities and souvenirs.

Travel Together

You can significantly reduce your vacation costs if you travel with at least one other person. Even if you’re not traveling with your sweetheart, consider planning a trip (and sharing a hotel room) with a buddy.

Watch Your Currency

If you’re traveling abroad, currency exchange rates (and fees) can eat into your budget. With a weaker dollar, many destinations – particularly Europe – are more expensive for Americans. Wherever you’re headed, figure out how you are going to pay when you arrive. While Visa and MasterCard are accepted worldwide, they may charge currency transaction fees for credit, debit, and ATM withdrawal transactions.

You can order foreign currency, up to $1,000, online from American Express, and have it delivered via to your home. The cost is $15.00 plus shipping.

You may want to check with your bank and credit cards to see what their currency exchange policies and fees are before you go, and pick the most affordable option available.

Pack Smart

Forgetting important personal items – whether toiletries, clothing, or even your camera – can throw a wrench in your vacation budget should you need to purchase replacements upon arrival. Not only are you buying something you already have, you may be forced to pay more if you are in a touristy area. Not to sound like your mother, but you might consider making a list, and checking it twice.

That said, be wary of over packing. Many airlines charge $50 or more if your checked baggage exceeds their weight limit – usually 50 pounds. Remember that you may be returning with more stuff than you left with.

How do you save money on your vacations?

Published or updated on March 26, 2008

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.


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