Vacation getaways are fun opportunities to relax and explore new destinations. However, even small trips require careful planning to account for the various moving pieces. You’ll need to account for airfare if you’re flying or gas money if you’re driving, lodging, food, and the entertainment and recreation costs that make vacations memorable. All of these expenses can add up quickly.
Fortunately, there are multiple ways to reduce your vacation costs and pay off these expenses quickly. Follow these steps to travel smarter.
Book Early to Save Money
Booking your trips early can help you save hundreds, if not thousands, of dollars on your vacations. Research shows that booking airfare in advance can help you save significantly. Booking travel 28 days out can help you save up to 24% on flights compared to booking less than a week out.
You don’t have to pay for your entire vacation at once. Book your airfare early and then a month or two later schedule your accommodations. As the trip gets closer, plan your activities and tours. This spreads out the cost of the trip throughout the planning period.
Look Into Travel Credit Cards
While planning your vacation ahead of time can help you find good deals and rates, you can also open credit cards that help you pay for these excursions. Travel credit cards come with a variety of benefits that help you rack up miles or points for your trips. Even spending money on basic costs like groceries and gas can give you points that you can use for travel.
Research different travel credit card options to find the best one for you. Some airline credit cards offer companion passes that cut down on flight costs. Other travel credit cards allow you to cover the cost of hotels and activities.
Create a Travel Savings Account
If you have a particular dream vacation in mind, like a honeymoon in Paris, a Disney trip, or exploring Japan, create a travel savings account so you can set aside funds every month for this experience. Consider opening a high-yield savings account that helps you grow your money with interest.
Deposit funds into the savings account every month, and watch your money grow. For instance, if you deposit $300 a month you’ll have $3,600 set aside by the end of the year for your dream vacation. Keeping this money in a separate account prevents you from spending it on other, less important, things.
Join a Travel Club
Travel clubs allow you to get group rates by vacationing with the same people. In a travel club, a group might decide to rent a large house in Canada or take a trip to Hawaii. Because a large portion of the group is going, they can book discounted rates.
This could be a good option if you want to make friends and travel with the same people. It can also make expensive trips more affordable.
Vacation Loans: Should You Borrow Money To Pay for Vacation?
Planning ahead of time can help you save money on your vacation while paying off the cost of the trip before you ever leave for the airport. However, there are times when you might want to take out a personal loan to fund your adventure. These loans can help you get favorable booking rates so you save money in the planning process. Here are a few loan options to consider as you are looking for vacation financing.
Using Personal Loans To Pay for Vacation
One option to get a loan for your vacation is to seek financing from your bank or through online lenders. The average personal loan interest rate for 2024 is 14.84%. If you have excellent credit, which means your credit score is above 720, you might be able to get more favorable rates.
Personal loans come in a variety of sizes, which means you can get a small loan if you only need a little extra cash to cover your vacation costs. However, you need to keep up with the payment terms and could end up paying more for your vacation because of the interest rates and fees lenders charge. Make sure you have a complete picture of the cost of the loan so you know how much you are spending to receive it.
Using Point-of-Sale Loans To Pay for Vacation
If you’re eager to book your vacation now and pay for it later, consider point-of-sale loans. With this option, you book your travel now and then pay for the expenses over multiple installments. This is also known as “buy now pay later” lending. For example, if your hotel accommodation costs $400, you might be able to pay for the hotel in four payments of $100. Many credit card companies offer point-of-sale loans and there are third-party apps you can also use.
These are some of the easiest loan options to use. Opting into a point-of-sale loan is often as easy as clicking a box at checkout. However, their ease is also one of their main drawbacks. You can opt into point-of-sale loans on everything from groceries to pizza delivery. It’s possible to bring down your payments significantly while having a huge backlog of loans to pay off, which can quickly become overwhelming. These loans also come with high fees.
Using Stock Loans To Pay for Vacation
A third option if you are exploring financing to pay for your vacation is to take out a stock loan. If you invest in shares through the purchase of stocks, you might be able to use these investments as collateral to secure a loan. In this case, you are not selling the stock, but simply borrowing against it. This option could be a great way for you to pay for your vacation if you have a diverse stock portfolio.
Like the other loan options, there are benefits and drawbacks to stock loans. Use a stock loan calculator to make sure the loan you are eligible for fully covers your trip. you don’t want there to be any gaps between your loan and how much you need for your vacation. Additionally, make sure you have a clear understanding of how stock loans work to ensure you get fair rates for your funds and know how to pay them back.
Whether you want to relax on the beaches of Bali or enjoy a beer at Oktoberfest in Munich, your dream vacation is within your grasp, use these tips to save money and get the financing you need.
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