While a vacation may not be in your immediate future, life will eventually return to normal, and it’s natural that you might want to start planning a getaway. You might have even seen the question circulating on social media: What are the top three places you dream of going when the pandemic is over? You may be picturing once-in-a-lifetime family reunion in Italy, an unforgettable safari in Kenya or a lengthy stay at a tropical resort in Bali. Anticipating a trip can bring you happiness and gives you something to look forward to.
Given the pandemic, your bank account may have taken a hit, but that doesn’t mean a vacation has to be out of reach. It may take some advance financial preparation or vacation financing to make it a reality, but you can still plan for your dream trip.
Here are some strategies, from smart savings to vacation loans, that can help you budget for a vacation when finances are tight:
With experts predicting a tough winter due to cold and flu season and continued cases of COVID-19, it may be wise to plan an excursion for the warmer months coming next year. If you can set aside some amount of money each week or each month, you’ll have a chunk of cash available when it’s time to go. Can you earmark $50 a week for the next six months? If so, you could more than $1,000 to spend. Consider setting up an automatic transfer from your checking account to a savings account on paydays to make it simpler.
Travel credit cards frequently offer perks that might help lower costs for your next trip, whether they’re offering airline miles you can put toward a ticket, rewards points you can apply to travel purchases on the card or cash you can put in your bank account. As always, make sure to note the terms and conditions.
If you qualify for a credit card offering no interest for an introductory period, you can use the card to book your vacation and pay the expense off over time. Do make sure you understand what the regular APR will be and budget for payments under that rate so you are prepared in case you aren’t able to pay it off before the interest rate converts.
A variety of third-party travel financing companies offer the ability to secure funding when you book a trip with one of their many travel partners, from airlines and cruise lines to resorts. You’ll either pay an upfront flat fee or the company might charge interest on the amount you’ve financed. Just be careful: In some cases, if you haven’t paid for your vacation in full before your travel dates, you won’t be allowed to travel. Interest rates can also be high and cancellation policies may not be as straightforward you’re used to.
Tip: Check the Better Business Bureau for recent complaints before deciding to borrow this way.
Need a travel loan? If you have good credit health, a personal loan could cost you less in interest than putting your vacation expenses on a credit card, or using third-party financing. Because it is an installment loan, a personal loan offers the predictability of a fixed rate with fixed repayment terms. Your rate won’t go up for the life of the loan and your repayment terms tell you exactly when you will finish paying off your loan.
Tip: Make sure you include your monthly payments in your budget so you can keep up with your loan.
Dreaming about where you want to go later can brighten any day. Maybe you want to see the Great Wall of China, relax in a villa on the Amalfi Coast or spend two weeks in the lush jungles of Thailand. With vacation financing, the world could be your oyster. No matter what strategy you take to finance your vacation, don’t be afraid to plan a memorable vacation — you’ve waited long enough, it’s time to get traveling.
Thinking about a personal loan to finance your trip? Check Your Rate