By MELISSAL AMBARENA from Nerd Wallet
Putting vacation expenses into your budget year round is an effective way to avoid debt, but it’s not always doable with a limited budget or unforeseen costs.
In this case, a lack of vacation spending strategies can leave you vulnerable to debt and overspending and delay your financial goals. But it’s never too late to make a last minute plan to save money on vacation.
A small window at the end of the year can allow time for money movement to avoid a hangover during the holidays.
1. Align your vacation budget with your financial goals
When deciding how much to spend on vacation, BudgetProposes Jason Speciner, a Certified Financial Planner for Fort Collins Financial Planning.
“Start with how much money you’re willing to spend on a gift and how much you can spend, then work on your list,” he says. “I put the cart in front of the horse and put dozens of people on the gift list so as not to abuse it,” he says.
If your debt or budget doesn’t leave room for holiday spending, plan to hang out with people, give gifts, or save on secret gift exchanges through free holiday activities. Set your expectations early by alerting people to your plans.
Adding to a pile of debt while on vacation is costly and time consuming to pay off. Develop a strategy for paying off debt and prioritize high interest debt first. If credit is high (FICO score is 690 or higher), balance transfer credit cards allow you to transfer debt from a high interest rate credit card to a low rate credit card interest (probably an introductory APR of 0%). There is usually a charge of 3% to 5% for each transfer amount. In the absence of interest, the monthly payments are applied directly to your balance, reducing your debt repayment time. With Less Than Ideal Credit Debt Management Plan If you’re struggling to progress, you can offer relief through an accredited nonprofit credit counseling agency.
2. Use the bonus friendly season
If you’re not borrowing and planning on getting a new credit card, look for one that offers a signup bonus that can provide you with extra cash or rewards to cover your vacation expenses. Please give it to me. Sign-up bonuses generally offer a three month period to meet your spending needs and are easier to achieve if you charge daily and vacation expenses. Cards with 0% APR at the time of purchase can also save money on interest for a period of time.
3. Earn rewards with the cashback app
The cashback app can add value to everyday purchases. You might need to upload a receipt, but it’s worth it for Krystal Sharp, the coupon trainer and creator of the Krys the Maximizer blog. She uses Ibotta, Fetch Rewards, and other apps to earn money and gift cards. With these apps, you can add in-store or online deals from specific retailers and earn money on the qualifying items you purchase. Alternatively, you can download a receipt to take advantage of certain benefits. You can also get incentives by introducing other people. For added value, Sharp makes purchases using rewarded credit cards and accumulates income.
“We focus on how to get gift cards, get referrals, save enough in the store, and use the perks of the store to buy what you need for your vacation,” says she.
According to Sharp, daily purchases can fetch $ 20 to $ 25 in a week or two, depending on how much you spend, which is usually enough. Income will be added over time.
4. Save with “Challenge Free”
The safest way to save money is to avoid unnecessary purchases over a period of time. You can try free months, free weeks, or free weekends, depending on your preference. The money saved can offset potential costs while on vacation.
For Courtney Clarke, a New York-based content creator on TheLifeOfCo YouTube channel, “no spending in November” helped keep the 2020 debt target on track. For a month, she avoided dining and activities and spent only on necessities. It costs money.
“I can’t say I was perfect on this issue, but it’s a great reset for retraining my brain,” says Clark. “It just makes sure you’re trying to get the most out of it. “
She admits she was eating out when she didn’t have enough time to prepare her meal, but even after occasional hesitation, she saved over $ 300 a month.
Do some side work now or clean your house and earn some cash for the holidays. When it comes to working together, there are a lot of flexible side tasks to do in your spare time, from carpooling to delivery. Or, if you want to save time, sell those dust collection items in your closet at a consignment store.
“I sold a lot to the Prato closet and Once Upon a Child to get rid of it,” says Sharp. She estimates, on average, about $ 50 per trip, or $ 200 to $ 300 per year.
This article was provided to The Associated Press by the Nerd Wallet personal finance website. Melissa Lambarena is a writer for Nerd Wallet. Email: firstname.lastname@example.org. Twitter: @lissalambarena.
NerdWallet: What is balance transfer? Should I do this? https://bit.ly/nerdwallet-balance-transfers
CFPB: How to Create and Stick to a Budget https://www.consumerfinance.gov/about-us/blog/budgeting-how-to-create-a-budget-and-stick-with-it/
NFCC: Debt Management Plan https://www.nfcc.org/what-we-offer/debt-management-plans/
Copyright 2021 AP communication. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
Source Link Millennial Money: Save for the Holidays Now and Avoid Regrets Later | Way of life