Should You Travel When You’re Paying Down Debt?Jun 27, 2018
It’s been 6 months since you’ve set those debt goals in January and another 6 months until you do it again. Is now the best time to take a summer vacation? For this month’s podcast, we asked our LIT’s to weigh in on this debate:
Should you or should you not take a vacation while you’re in debt?
Here’s what they had to say:
What kind of debt are you carrying?
Long-term debt such as a mortgage or student loans don’t go away overnight. Waiting until they’re paid off is unrealistic. Instead, take a look at your consumer debt situation and ask yourself these question:
- Are you borrowing more than 30 per cent of your credit limit?
- Are you making more than the minimum payments on your debts?
- Are debt payments taking up a majority of your income?
The answer to these questions can give you some insight into how you’re managing your current debt load and if taking on more debt to travel is a possibility, or if it will bring your more debt stress and financial pressure.
What to do if you’re struggling?
If you are struggling with your debt load, it’s essential to know where to turn for help. Here’s where to start:
- Create a budget that includes debt repayment. You may need to cut costs and reduce spending in other areas so you can add more to your debt balances.
- Check out your options. Use this debt repayment calculator or talk to an LIT about the best way to reduce debt.
- Delay your vacation. Choose to stay close to home and take day trips that will save you money and allow more time to pay off debt. Focus on adding to your emergency savings account as well so you’ll have a buffer if you have unexpected expenses in the future, this will save you from adding to your debt load.
Frugal travel options
If a vacation is in the cards for you, it’s still a good idea to cut costs where you can. For example, you might save money by driving to your destination vs. flying. Or, you could adjust your out-of-country vacation plans and opt for a Canadian destination to save you money in exchange rates. Use this travel calculator to estimate your costs.
Still undecided about whether you should travel when in debt? Check out this article to see two different viewpoints and tune into our podcast for more advice from our LIT’s.