Budget Travel: How to Take Your Dream Vacation While Paying Off Debt


Iceland’s beautiful geothermal Blue Lagoon. Sunsets on the beaches of Brazil. The architecture and music of Portugal. The art and food of Spain. What do they have in common? They’re some of my favorite memories from traveling across the globe.

Even though I’m committed to paying off debt, an enormous passion of mine is traveling. Many personal finance experts recommend that you pay off your debts before you travel. While that’s great advice, for people with huge debt loads, it can be unrealistic and disappointing. It may take years (or decades) to pay off debt!

In my life, I have made paying off debt and traveling dual priorities—and I’ve never regretted it. Here are several tips for budget travel and how you can take your dream vacation while paying off debt.

1. Pay in Cash

This should go without saying. Obviously, you don’t want to borrow and get deeper into debt because of your love for travel. Seeing new sights is great, but it kind of defeats the purpose if you have to come home to a larger debt load.

Instead of relying on credit cards or other loans to fund your adventures, save up some cold hard cash. Set up automatic transfers from your checking account to a separate savings account to make this easier.

Also, make sure you develop a realistic timeline and budget for your trip so you can save a sufficient amount. For my most recent trip to Spain, I saved for six months and automated my withdrawals every month in a sub-savings account that I titled, appropriately, “Spain.”

2. Consider Travel Hacking

Have you heard the term travel hacking before? It’s a way to use credit card rewards sign-up bonuses to get free or low-cost budget travel options. I used to think it was a scam and that it didn’t actually work.

That was until I realized that I was really committed to paying off my student loan debt, but I also wanted to travel on the cheap. I kept hearing about budget travelers going abroad and paying next to nothing for their flights. So I decided to try it.

I signed up with the American Airlines credit card, and within a few months, I got the reward sign-on bonus and I had 40,000 miles. Surprisingly, 40,000 miles is enough for a round-trip flight to Europe off-season (typically between October 15 and May 15). In total, I ended up paying $63 for my round-trip flight to Spain to cover taxes and airport fees. I was no longer a skeptic.

Flights are typically one of the most expensive factors in traveling—and my flight was worth $1,400. By not spending a lot of money on the flight, I dramatically reduced the amount I needed to save overall—which in turn helped me continue to pay off debt.

Now, there is one big caveat here: if you are also battling credit card debt, then travel hacking is absolutely not a good idea. Travel hacking should only be considered if you are a responsible credit user with no credit card debt. It’s crucial that you pay back your balance in full each and every time.

If travel hacking isn’t for you, you can still save up and look for deals on sites like Travelzoo, Hipmunk, Kayak and others. To get the best deal, consider flying during the week. In addition, comparison shop between various airports, dates, and times.

3. Find Cheap Accommodations

Next to the flight, accommodations are typically the second most expensive thing you have to budget for. Instead of using pricey hotels, consider renting through AirBnB to cut down on costs.

If you want to spend even less, stay in a hostel or go CouchSurfing. When I went to Spain and Portugal, I stayed in hostels only and paid roughly $20 per night. Overall, it was significantly cheaper to stay in a hostel than in a hotel.

Another option for the truly adventurous and hard-working is to volunteer your time in exchange for accommodations. I met several people at my hostel who worked 20 hours a week and received free accommodations and food. Simply contact the hostels where you are going and see what volunteer opportunities are available.

4. Stick to Your Debt Repayment

Although traveling is awesome, you don’t want it to derail your progress on your commitment to paying off your student loans. Make sure you can stick to your minimum payments as well as your timeline. If going on a trip will set you back significantly in your repayment, then reconsider travel or figure out how to do it on the cheap.

All my trips, everything included, have cost $1,000 or less. While I’m currently in “debt-slaughter mode,” $1,000 is less than one month’s worth of debt payments for me. Yes, I could have gotten out of debt a few months earlier by not going on these trips, but taking the time to relax and see the world actually re-inspired my debt payoff goal.

Before my last trip, I was starting to feel some debt fatigue. I was sick and tired of making payments and felt like I was working just to make payments—not a pretty place to be.

My two-week trip, which cost less than $1,000 total, completely transformed my outlook and inspired me to get out of debt in one year. Sometimes traveling can be an investment in your well-being and help encourage you to reach your goals! We can’t be productive machines all the time, and rest and relaxation are necessary to think clearly and make progress on your goals, whatever they are.

The key to taking your dream vacation while paying off debt is balance. Stick to your debt repayment plan, but start saving so you can pay for your vacation in cash.

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