How to Finance the Trip of a Lifetime
The struggle, however, comes in the form of gathering the money to make it happen.
Many people will save for a long period of time so they can take the ultimate trip, but others turn to financing so the money can be acquired faster and simply repaid over time. There’s also the group of people that gets creative with the destination and timing to save as much money as possible.
No one strategy is right or wrong, different strokes for different folks - right?!
Here are a few creative options I've found to help you finance the trip of a lifetime.
Locations with Cheap Off-Season Pricing
One way to afford the trip of a lifetime is to find a destination that has cheap off-season pricing.
Everything from transportation to lodging costs much less. When you want to travel cheap, it’s important to skip traveling over the summer, spring break, winter break, and holidays.
Any other time is considered “off-season.” Another reason why a destination might reduce its pricing is due to weather extremes, such as a lot of rain.
Before choosing an off-season destination, make sure that there is off-season pricing. Some locations are peak all year, such as certain tropical destinations. You also want to ensure the cost of travel is reduced, as well.
You might be able to secure cheaper plane tickets to specific destinations because they aren’t in peak season. This is just one of the many ways to save while traveling.
Set Up a Vacation Account
Another way to pay for the trip of your life is to set up a vacation account with your bank. The money in this account is designated specifically for your vacation.
Money can be deposited, but it can’t be withdrawn before a certain date. A great way to ensure money is deposited into this account is to have the bank withdraw a specific amount of money each time your paycheck is direct deposited into your bank account.
It might take a while to save the money for your dream vacation, but the vacation will be completely paid for with no short-term or long-term debt. However, some people will save for part of the trip and finance the rest. It depends on your credit situation and the timing that you’re working with.
Finance the Trip with a Loan
There are several ways to finance a trip, but one of the more prevalent ways is a personal loan. This option is for those that don’t want to wait to save money.
Why would you take out a loan for vacation? Believe it or not, it IS an option with lenders. They will literally accept a loan application for a vacation.
It may sound absurd, but it’s legitimate. While this is a way to go on that long-awaited vacation, you’ll have to consider the financial outlook of such a move.
The consequence is you are obligated to pay that money back with interest! How much interest? Some personal loan rates can exceed 30%. So put it this way: you could end up paying quite a bit extra on that vacation. But on the other hand, people take years to save up for a vacation.
If you don’t want to wait and don’t mind paying more, then you opt for the installment loan to get the vacation rolling.
Use Credit Card Rewards
Another way of making the trip of a lifetime more affordable is to use credit card rewards. If you already have a travel rewards credit card, make sure you review the terms and conditions of those rewards, so you can ensure they are usable when you’re ready to take a trip.
If you don’t already have a travel rewards credit card, it is good to get one with a low interest rate and rewards that you can actually use. Many people make the mistake of obtaining credit cards with rewards that expire too quickly or aren’t applicable to their style of travel.
Just be careful when using credit cards to obtain travel rewards because it can be easy to rack up debt without paying attention. Your credit score will benefit and you will earn more rewards if you pay off the balance every month.
A travel rewards credit card is also very useful when on a trip. With so many cards dropping the foreign transaction fees, you could travel abroad without having to pay a fee for every transaction.
Making Your Trip the Best
Don’t be afraid to get creative when it comes to planning the trip of a lifetime. Think about the experiences that you and your travel companions can have!
Research low-cost activities, travel in the off-season, save your money, finance when necessary, and use one travel rewards credit card that will help you get to where you’re going.