Hi there! Hope your summer vacation has gone well. You must have spent quality time with your friends and family near a beautiful beach or at a hill station. The bright sun with warm conditions; yes, we know you will cherish the beautiful summer vacation memory forever!
Summer is gone. Now be practical and check how much money you have spent on the vacation. Did you have a vacation budget and have any record of your spending?
7 ways to get back on track after going over your vacation budget
Make a U-turn to your regular life
While talking reconciling your vacation budget, my friend, you are not alone. According to the Nerdwallet survey, people, out of excitement, overspend by using the credit card on vacations. If you cannot pay the entire outstanding amount at a time, at least try to pay the minimum amount. Then negotiate with your creditor about the interest rate. If you have multiple credit card debts, credit card consolidation can help you.
Better to start a Zero-based budget
I will suggest you adopt the zero-based budget formula to live in a cost-effective way. Don’t get confused after reading the word. I was also puzzled when I heard the word for the first time. Believe me, you don’t have to be an economist while planning the zero-based budget. It is very simple. You have to make a check on your expenses. We often make unnecessary expenses at our home. If you inquire about it, you will be surprised to know that 30% of your total expense every month is a wastage. Actually, until now, you may not have thought about it deeply. Try to find out what your additional expenses are, and cut them off immediately. You can run your home smoothly without making any compromise and your money will be saved too.
Use your credit card only in necessity
Perhaps your travel expenses have already gone beyond your normal paying capacity. So, in the next few months, you must use your credit card in a controlled way. An unnecessary credit card debt means you will be again entrapped into debts. So, it will be much better for you to take out credit only when it is a necessity. You can make a good credit score with on-time payments. A good credit score will help you to take out a loan again at suitable terms and conditions. So, my suggestion to you is to use your credit card only when it will turn out to be a necessity.
Never touch your 401(k) account
The specific purpose of a 401(k) account is to cover all your expenses after retirement. So, if you withdraw the money from your account to pay off your travel expenses, I am sorry to say but you are living in a fool’s paradise my friend. Moreover, the early withdrawal from the 401(k) account means you will have to pay a penalty fee as well as taxes on that pull-out amount.
Take out a balance transfer card if required
Apart from negotiating with your creditors, another best idea of reducing the interest rate and paying off the debt is to transfer your outstanding balance to a zero percent interest rate credit card. Search for the credit card that will offer you a zero percent or relatively low-interest rate for the longest promotional period. Apart from the zero percent interest rate, you can get reward points and travel miles on buying tickets for your next journey. So, if you’re wondering how to avoid the dangers of credit card debt, then this can be an option. You can take out a zero percent balance transfer card to consolidate and repay your credit card bills with ease. You just take care of one thing, a good credit score is very much important for availing the best balance transfer offers.
Use a travel reward card for good offers
Be it summer or Christmas, if your world revolves around exploring the uncharted territories, my personal suggestion is to opt for a travel reward credit card. NerdWallet says it will be safe for you to apply for the card at least a year before your journey. You can only get the travel reward card after a long process. So, apply in advance to earn bonuses and rewards on your every flight and hotel booking.
Next time be careful and make plans in advance
Maybe your inexperience and shortage of time were the reasons that you went over your vacation budget and overspent in the summer holiday. Don’t be sad, next time, try to plan well in advance. Shell out every penny wisely and concentrate more on savings. Keep a bank account dedicated to the travel-related saving purposes. Deposit a definite amount regularly on that account. So, the next tour’s due credit card amount can be paid by using the savings without any interest rate attached to it. This is the best idea to keep your tensions at bay.
Taking unnecessary stress on how to pay off your credit card debt may deteriorate your health. You may have overspent on your last tour, but that doesn’t mean you have to overthink it. Keep confidence in yourself and figure out a saving schedule, you have nothing to worry my friend!
Linda Richardson is a New Jersey-based financial content writer and enduring learner with an ongoing interest to learn new things. She uses that curiosity, connected with her knowledge as a financial writer, to write about subjects valuable to small businesses. You can find her on Twitter at @LindaRossie9.