The Debt Free Vacation

“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.”

-Ogden Nash

As we travel across the country in a motor home, I’m often moved with thankfulness for the simple privilege of vacation. Our fearless crew is comprised of myself, my beautiful wife, my father, my step-mother, and her step-father (which I suppose makes him my step-step grandpa).

The Debt Free VacationAlthough we’re not the most likely group of travel companions, we’re all delighted for the opportunity to get away for awhile. My wife and I are especially excited to be funding our vacation with cold, hard cash!

Let’s take a look at how we did it.

Set savings goals

Back in early 2009, we set a series of savings goals for ourselves. One of our goals was to create a vacation fund and contribute $100 each month while we were still in debt.

Staunch followers of Dave Ramsey might turn their noses up at the idea of saving for vacation while still in the midst of aggressive debt reduction, but we knew it was a sound decision for us… So we set up the vacation fund and started saving.

Automate your savings

With your goals in place, I suggest you automate your savings each month. Consider using a high yield savings account that offers an automatic savings plan (I use ING Direct) to make saving as easy as possible.

Practicing purposeful saving will help convert wannabe-savers into successful savers. Be careful not to fall into the trap of thinking you’ll miss the extra money. Once we set up our automatic savings system, we never even noticed the difference in our cash flow, and the money faithfully continued to grow until we were ready to use it.

Plan your vacations carefully

As your money grows and your debt shrinks, you have plenty of time to plan your vacations. Where do you want to go? How much money will you need? We gave ourselves about a year to figure things out and set our plan in place.

Living in Michigan, we knew that March and April were the worst months for spring fever, and that my wife would have this week off for Spring Break. We also knew that we’d have about $1, 200 saved.

Saving over the course of the year allowed us to maintain our strategy of aggressive debt reduction, gave us plenty of time to plan, and is allowing us a vacation free from the anxiety of spending money we don’t really have… And boy does it feel good! 🙂

Enjoy the spoils of your disciplined saving

So here we are… Just north of Jackson, MS. I’m actually typing this article in a moving motor home, with my laptop tethered to my cellphone for internet access! Our trip is planned out just enough to give me the spontaneity and adventure I need, while still making my organized wife feel comfortable. We have plenty of money saved to cover our expenses, and we have a whole week on our own. Life is good.

In closing…

Using money specifically allotted for vacation is affording us care-free spending. Vacation should be a time for each of us to relax and recharge our batteries, but for many people vacation can be accompanied by the anxiety of having to pay off the debt we incur far into the future. To that, I say: Thanks, but no thanks.

How did you fund your last vacation? Did you plan the trip in advance and save accordingly, or did you leverage a bit of your future for a small slice of immediate pleasure?

If guilt free vacation spending sounds good to you, perhaps it’s time you considered a debt free vacation.

8 Responses to “The Debt Free Vacation”

  1. Anonymous

    We do the debt free vacations too. We setup a goals savings account in ING, figure out how much we need, and then fund the account. Then we take out enough cash for spending money while we’re gone -and don’t spend any more than we bring. Vacation is so much more enjoyable when you don’t have to worry about paying it back later!

  2. Anonymous

    Our vacations come out of our amorphouse “extra money” that is sitting around in the savings account unallocated.

    I should probably make an account and label it as being for Christmas/vacations, but as long as the rainy day/everything else fund stays at a reasonable level, it’s hard to find the motivation for change.

  3. Anonymous

    Matt, we also have debt-free vacations (going on a cruise later this month). Do you just connect to the cell phone to post or for writing your articles?

    I write draft posts often while flying on business. I write them in Windows Live Writer and then sync to WordPress later on at home or the hotel.

  4. Anonymous

    Vacations should be paid for within a normal credit card cycle, at most. Setting aside funds specifically for vacations or a particular vacation is a good idea, regularly contributing to the fund just as one would automatically put funds in a 401k account.

    For example: lets say that you plan to go on a vacation that will cost $2,000, and will be in 6 months. Well, ideally you want to plan earlier, but lets say it is a family wedding and that is when you need to go. In this case, save $333 per month to go toward the vacation. When the vacation is completed, and you have charged the costs on your credit card, you will have the funds available to pay.

    This same principle applies to buying a car: save regularly for your next car, putting away money regularly so that you can pay cash.

  5. Anonymous

    We work Dave Ramsey’s plan & stick to it for the most part. (Minus carrying loads of cash in our wallet)But we also realized quickly that we have to make the plan work for our family. Like you, we save all year & plan an economical vacation. Last year, we went to the mountains for a week & to the beach for a weekend. Both trips were paid for in cash & I even used coupons when we grocery shopped. We also paid off $9,500 in debt last year! We leave this Saturday for another trip to the mountains & it has been paid for in cash. Our spending money is also cash only so we don’t absent mindedly swipe our debit cards 1 too many times. 🙂

  6. Anonymous

    Our honeymoon was the only trip we put on a credit card, and we paid it off within 4-5 months. Since then, we’ve always saved for our vacations. This winter we are going to New Zealand for 3 weeks. We’ve saved for the trip for 5 years, taking only small vacations (3-5 days) each year. What a great relief to know that we don’t have to sacrifice future financial security for this experience!

  7. Anonymous

    Great tips… we do the same now that I have subscribed to all these personal finance blogs, though we do it w/o having any other debt. I use SmartyPig now because setting up goals is even easier and more pleasing to my fiance’s eye, as well as having a much better interest rate.

  8. Anonymous

    Great job Matt on having a debt free vacation! We’ve been enjoying them since we got married. It has surprised a few of our friends, but most have supportive.

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