Your family had a blast on its recent vacation, splashing in the waves of the ocean, enjoying the thrill of amusement park rides, or taking in the sites of a big city. Now that you’ve returned, it’s back to the daily grind. You might also have a bit of a shock when you look at your next credit card statements and see just how much vacation debt you accumulated. Once you’ve gotten over the shock of seeing the amount you owe, it’s time to make a plan to pay it off.
Tackle the Biggest Debts First
One of the best ways to handle vacation debt is to pay the balance on your credit card in full before the due date. But, depending on the amount you owe and your budget, that might not be possible. If you can’t pay your debt in full, and you used multiple cards over the course of your trip, focus on the card with the either the biggest balance or highest interest rate first. Paying off a small debt quickly might give your self esteem a boost, but focusing on the highest balance or highest interest rate card will save you money in the long run. Pay as much you can towards that one card, and pay either the minimum or as much as you can afford above the minimum, on the remaining cards.
Adjust Your Budget
To afford to pay off your debt, you may have to make a few changes to your current budget. Review your budget and see if there is any room to cut back or to avoid certain purchases for a little while, so that you can put the money that would ordinarily go towards those purchases towards paying off your vacation debt. Start with the things on your budget that you don’t really need, such as meals out or other entertainment. Although cutting back can be difficult, remind yourself that you just had a great vacation and that those little extras will be back in your life as soon as the debt is paid off.
Consider a Debt Management Plan
If the debt from your vacation is too much for you to manage on your own, getting help can be the next step. You might consider speaking with a credit counselor and enrolling in a debt management plan. A debt management plan won’t excuse you from paying what you owe, but it can make your monthly payments lower and result in lower interest rates and waived fees. If there doesn’t seem to be room in your budget to pay off your debt, a management plan can be the best option.
Make a Plan for the Future
Once you’ve paid off your debt, making a plan to avoid future debt while on vacation can be a great idea. If your family travels regularly, start a vacation fund. Contribute to the fund every week or month, just as you would to an emergency fund or retirement plan. Wait to go on a trip until you have enough in the vacation fund to cover the cost of it and to cover the cost of any incidentals and souvenirs on your vacation.
Family vacations are a time for making last memories with the people you love. Make your vacations even more enjoyable and meaningful by having a plan to tackle any debt that accrues and to avoid debt on future trips.
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