Borrowing with smarts (part 6)

Vacation planning

Everyone likes to go on a great vacation. Whether you have a family or you want o treat yourself to a great experience somewhere far away, a great vacation is something we all look forward to. Planning for them is another story, but if you do it properly, you will be able to save enough money ahead of time to pay more most or all of it upfront. Then, if you do have to use a credit card for a few purchases on the vacation, you will be borrowing with smarts. It really isn’t a good idea to take off on a trip on a whim. You always want to save and plan your vacation as far ahead as you can. After all, the longer you plan for it, the better the time you will have and the more you will be able to do when on this vacation. This article will show you some pointers and explain to you ways you can effectively plan a great trip that will not put you into debt.

Vacations are not something you have to take or an impending expenditure, but they are important for your sanity! So, if you want a vacation and you want to be smart about planning it, you should think of saving for it the same way you would a new car fund – just like we explained in a previous section of this article. You should create a separate savings or money market account for vacations. Again, just like saving for your next car, vacations can be really fun to plan making the savings aspect not so daunting. You can add money to your vacation fund each month or even from each pay check. Some people save all of their bonuses from work in their vacation funds. As long as you are taking from important other monthly obligations to do so, save as much as you can. Do not, however start paying minimum amounts to your credit card bill sin order to deposit extra money into your vacation savings! Never plan a vacation that will cost more than you have saved either. You may need to use a credit card on vacation for minor purchases, but even they are not recommended as borrowing with smarts. If you do use credit cards plus your vacation fund savings, you are going back into debt.

If you are taking a family trip that will take several plane fare tickets and multiple hotel rooms and such, you will obviously need to plan accordingly. If you have a set amount you can donate to the fund each month, just plan farther in advance. Adjust your planning and savings length accordingly. This will obviously depend on where you are going and how many people you are taking. Instead of putting too much money into your vacation fund each month, just save for a longer period of time – without taking money from any other monthly obligations.

Try to plan your upcoming vacation with as much financial detail as possible. To save money on your overall vacation, try finding a great vacation package. All inclusive vacations are ideal fro trips with multiple people involved. Even book your travel during the off season. I am not saying that you have to take a family snow skiing trip during the summer.  I am suggesting that you take advantage to time periods when travel may be discounted. If you do use a credit card that offers sky miles or something like this, be sure to take advantage of your miles. Do not start using your credit card to rack up miles after you decide to take a vacation – this is a horrible thing to do. Some of you may travel a lot on business and your company lets you take advantage of your frequent flier miles or you have a frequent flyer account – use the miles for your vacations. Always be aware of travel limitations when you buy tickets as well. You do not want to add any extra charges if you  miss a flight or at least be aware that punctuality is important when flying (families sometimes have a hard time getting everyone to the airport on time). Just become a great planner. Buying airline tickets ahead of time saves money or be on the look out for cheap ticket sales while you are in the planning mode. There is nothing wrong with withdrawing money out of you vacation fund for great airline ticket sales where you pay way in advance. Again, just be aware of special rules that come along with these sales. Restrictions you cannot abide by will incur extra fees.

The more you plan your vacation in great detail, the less surprises you will encounter when on that vacation – and the lower your stress level will be. Get to know the details about where you are going. Learn the history of the places you will see ahead of time. You do not have to turn your family vacation into a history lesson, but you may find the planning part to be very exciting when you do your research ahead of time. You just cannot lose when you plan ahead. You will definitely get more out of the trip and you will be less likely to get lost and be taken advantage of.

Be careful of your spending once you are on your vacation. It is easy to get swept up in the moment and use your credit card for that item you just have to have. Do not do this. Instead use your attention to detail plan making skills to plan for these types of things ahead of time.

The reason to put a vacation on your card is to protect your rights if things do not go as planned. You will find that you want to put your vacation on your credit card because of the travel insurance your card offers or car rental discounts and such. If this is some you want to do, then make sure you are capable of paying this card off with all of your vacation fund money as soon as you get back. This takes discipline and some people screw this up because they may have a credit card that has a huge availability to it and the your spend there budget. If you have $7,000 saved in your fund, then you never want to spend more than $7,000 on your credit card.

Be sure to read our next article on weddings and how to plan them with borrowing with smarts in mind.

Part 7…

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