2 Ways to Help Your Family Avoid Vacation DebtMay 10, 2017
Do your children help decide where you’ll go and what you’ll do on your family vacations? Many parents include their kids in this decision-making process. But a family vacation is about more than just the itinerary — it’s also about the cost. Enlisting your children’s help in creating a vacation budget can help you avoid coming home with additional debt once the vacation is over.
It’s easy to spend more than you anticipated on family holidays — some parents even resign themselves to taking on additional debt. A recent Ipsos poll for BDO Canada revealed that before spring break even got started, one in five Canadian parents admitted that they would add to their debt paying for March break activities. Give your finances (and your family) a helping hand this year, and utilize the following strategies to avoid vacation debt.
Get your finances in order before you leave
Some financial obligations occur regularly and predictably, like the date your mortgage is due, or when your power bill usually arrives. And those bills are likely already built into your monthly budget. But that isn’t true of all expenses.
If you have kids who are involved in extracurricular activities, costs can come up at different times of the year, and you might not always be expecting them. The sign-up fee for a new activity might be due around the time you return from your vacation, or your child might be due for new sports equipment, which can put a real dent in your budget. If you’re unprepared, you might come home from vacation only to realize you have to put those expenses on credit or get a loan.
The same is true for less frequent household expenses like property taxes, vehicle insurance, or vehicle maintenance — these costs can take you by surprise. There is no more disappointing welcome home than finding a pile of bills waiting for you and worrying about debt reduction.
Make a vacation budget
Budgeting for your vacation means planning as much as you can ahead of time. Do a little online research to find out what types of amenities are available and included in your stay. Remember that packing your own snacks or meals when you go out for the day can save a lot of money.
Give each member of your family — including yourself and your partner — a set spending allowance. As much as possible, have cash on hand and use only what you have, rather than charging purchases. In the excitement of spring break activities, it can be easy to forget that you put over-priced food, souvenirs, or transportation on your credit card until you get the bill. And if you and your partner are both pulling out plastic without the other one realizing it, your debts could rise quickly.
If you’re planning activities and booking amenities ahead of time, you should have a rough estimate of what your vacation will cost. Do as much as you can to save all the money you need ahead of time. A lot of family-oriented activities are considerate of tight family budgets, and there are often low-cost or free family events sponsored throughout the summer. If you aren’t familiar with the location or events in your area, call some of the organizers or ask local business owners what they recommend.
Your family vacation should be as relaxing as you hope. One way that can happen is by preparing financially. Budgeting, saving, and attending to your financial obligations before you leave can all help you achieve a debt-free vacation.
Do you take advantage of free family activities to avoid vacation debt? Share your ideas on Twitter. #LetsTalkDebt, #BDOdebtrelief