Taking a few days off and going somewhere new feels like a given. But would you take on thousands of dollars of debt to do it?
For 36% of Americans, some fun in the sun is worth the extra price tag, no matter the cost.
In this article, we’ll examine rising vacation costs and why taking one is becoming increasingly difficult for many Americans today.
How In Debt Are American Vacationers This Summer?
Looking back to 1980, 3.3% of Americans would take a vacation each year. Fast-forward to today and that number has been cut by roughly half.
Of those that do take one, the amount they’ll need to spend is going up tenfold. Most families are spending well beyond their means to ensure they’ll have the time of their lives.
And we don’t need to go far to give you an example. Even a simple trip to Disney World could cost a parent up to $2,000 per child just to give their child a regular experience.
This trend highlights a growing trend where financial health isn’t prioritized as much as it once was. Many people would rather live in the present, invest in experiences, and worry about the consequences later.
Why Are We Taking On More Debt For Vacations?
There are plenty of reasons why vacation debt is on the rise. Let’s break down a few of the main ones:
Lifestyle Inflation
As incomes increase, so do spending habits and the need to show off your wealth, even if it means living paycheck to paycheck.
A simple vacation won’t cut it anymore. They’ll want to upgrade their rooms, go to luxury restaurants, or do plenty of activities that weren’t part of their original plan.
This phenomenon, known as lifestyle inflation, leads many of us to spend more than we should unconsciously.
Listen, there’s nothing wrong with splurging if you have the money. But if your account is in red after it, think twice before overspending and dealing with unnecessary debt later.
Lack of Savings
A whopping 44% of Americans can’t cover a simple $1,000 emergency. So, where do you think most of them are getting their travel money from?
You guessed it, credit cards or personal loans.
A credit card is an excellent tool for emergencies and building your credit score. But if you don’t keep up with payments (and the high interest rates that come with them), your debt can quickly spiral out of control and force you to pay far more than you anticipated.
Desire for Memorable Experiences
Everyone wants nice things, especially when your friends and family post their trips on social media. Seeing these Instagram reels pressures many of us to take the plunge and travel, even when we’re in no condition to do it.
Remember, these countries and their iconic landmarks aren’t going anywhere. Make a long-term plan, save for your next trip, and go when you’re truly ready.
Easy Ways To Save Money On Your Next Vacation
While vacations can be expensive, there are plenty of ways to enjoy a few days off without the high price tag. Here are some tips to help you make the most out of your vacation budget:
Travel Off-Season
Traveling against the crowd is the best way to save a few bucks. Flights, hotels, and activities will almost always be cheaper, and many businesses will offer discounts to attract travelers. If you’re lucky, you might even have popular tourist destinations completely to yourself!
Choose Less Popular Destinations
Why go to the usual suspects when there’s probably a better and cheaper alternative? Going to less popular destinations will give you a similar experience without the overblown price tag.
Also, from personal experience, local people from these places still have that charm many larger tourism destinations lost long ago. If you’re open to it, exploring these destinations will give you a unique experience you wouldn’t get in a traditional tourist spot.
Opt For Staycations
Sometimes, a simple staycation is all you need to rest and recharge without worrying about expensive flights, hotels, etc.
Take this chance to check out your city’s attractions, dine at local restaurants, and even splurge on a nice hotel to complete the experience. Doing this will help you cut costs and appreciate where you live a lot more.
The Bottom Line
Nothing beats seeing a beach sunset in Bali, the Coliseum in Rome, or the Sagrada Familia in Barcelona. But taking out thousands of dollars of debt just to make it happen isn’t the way to go.
If you want to make this vacation happen, you must be proactive and plan ahead. Doing this lets you make the most of your next trip without sacrificing your financial health and peace of mind!
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