How to Plan a Vacation With Student Loan Debt
Over 43 millions Americans are repaying student loan debt. With summer being here, many people are looking to enjoy it with a vacation. I recently took a trip to Mexico with friends. However, in the past I would pass up vacations with because I felt guilty about my student loan debt. Now that I’ve vacationed, I have to admit that it was amazing and I am guilt-free because I planned far enough in advance and stuck to my budget. Let’s be honest, we all need to the opportunity to rest and reboot. To help you plan a budget-friendly vacation while managing your student loan debt, I am interviewing my financial planner, Chuck Burch. He has 25 years experience of diversified financial experience with businesses of all sizes.
Hi, Chuck. First, I want to thank you for agreeing to this interview. As I mentioned above, I recently returned from Mexico and now I want to help others plan a vacation that fits within their budget.
1. What should individuals with large amounts of debt, particularly
student loan debt, take into consideration before planning a vacation?
Individuals with debt need to be realistic about where, when, and how they can travel. The “staycations” of the Great Recession are passe now. People want to get out there and explore the world. But the world is a big and expensive place. First, take a look at your resources. Do you have an aunt who lives in Santa Fe, New Mexico who is always asking you to visit? Or do you have a cousin that lives overseas that has room for you? Now is the time to consider visiting friends and families in faraway lands for an fun yet economical vacation.
2. How does one determine how much he/she can afford to spend for a vacation?
A good rule of thumb is one half of a month’s salary per week of vacation. If you take a two week vacation, then you would need to have a month’s salary saved. This is in addition to your emergency savings.
3. How can individuals measure how a vacation will impact his/her
financial goals?
Take a good hard look at your budget. Are you using vacation time or are you not being paid? Are you going to use cash and pre-paid cards while you’re there, or are you going to use debit and credit cards? Some expenses, such as groceries, will be reduced while you’re gone, but daily life on a vacation is generally three times more expensive than everyday life. Now play with your budget and see how your vacation will affect it, and then plan accordingly.
4. How does on go about the process of setting up a budget for a vacation?
Use websites like kayak.com and travelocity.com to get a good feel for how much your airfare and hotel will cost. If you’re driving, look at your car’s highway ratings and reduce that by 10%. Then figure how far you can go on a tank of gas and how much gas you’ll need for your trip. If you’re going to rent a car, see how much that would cost and use a site like rentalcarmomma.com to get the best rate. Look at the cost of living for your destination. Are you going to an expensive city like San Francisco or a more modest destination like San Antonio, Texas?
Once you get a feel for all these numbers, you’ll know how much you need. Take that amount, increase it by 20%, and then create a savings plan. The farther ahead you plan, the better off you’ll be. If you want to go on vacation in June of next year, then start saving in May of the current year. Take the price of your vacation, divide it by the number of pay periods between now and then, and then automatically save that amount every pay period.
5. While on vacation, what can be done to ensure that individuals
don’t go outside of their budget?
First, look for hotels that are very inclusive. The price of your room should include wi-fi, a continental breakfast, and parking. Remember, the more expensive the hotel, the less that’s included in the price. Next, don’t think you have to eat out every single meal. The cost of meals can be your single largest expense while traveling, so get a room with a mini-fridge and microwave, find a nearby grocery store, and make it a priority that you eat at least one meal a day in your room. Or make sandwiches and take them with you when you are out and about so you don’t have to pay extra for lunch. Sure, treat yourself to ONE nice meal at a nice restaurant while you’re traveling, but that’s it.
6. What methods of payments do you recommend vacationers use?
Cash is always king, but it can be risky. One pickpocket can totally derail a vacation if you’re not careful. Know ahead about how much money you’ll need per day (remember the rule that the cost per day on a vacation is three times higher than everyday life). Take one-third of this amount in cash, take one-third in pre-paid expense cards, and use your bank debit card for the rest. Learn to use your hotel safe or bring one of those cleverly disguised travel safes (you know, the ones that look like cans of Pepsi or shaving cream) to keep your unneeded cash safe and tight while you’re gone during the day.
7. During and after vacation, there’s still life at home. What steps
can individuals take to ensure that bills are not neglected while on
vacation?
Pay every bill in advance that you can. If you’re gone for two weeks, then find out what’s due during that time and pay it before you left. If this isn’t possible, use your smart phone and laptop to pay bills while you’re on vacation. If you have a pet, make plans for them way in advance so they’re not neglected while you’re gone. If you have a friendly neighbor, ask them to check your mail and keep an eye on your place while you’re away. Make sure that the pet sitter and neighbor can reach you, even if you’re in northern Europe or southern Africa.
Always remember, it’s not about how much money you spend while on vacation. It’s about the experiences that comes with travel. When you look back on your vacation, you won’t think about the hotel or the plane trip. You’ll remember the places and the people. So start saving, budget wisely, and go see what’s out there.
Charles Burch Jr. (most well known as Chuck) is a Certified Public Accountant (CPA), a Certified Financial Planner Certificant (CFP®) and has earned the designation as a Personal Financial Specialist (PFS™). After a career in Corporate America, he now serves as a trusted Advisor for a broad range of clientele. He has over 25 years of diversified Financial experience with Businesses of all sizes. His client base ranges from Individuals, Couples and Families, to Sole Proprietors and Corporations. He specializes in Guidance to growing enterprises and individuals considering business ventures. He has multinational CPA firm exposure and extensive hands on Management experience within numerous Fortune 500 companies. He has taken best practices in large organizations and implemented them in varied business environments.
Chuck serves as a consultant in Planning for Businesses, Business Owners and Individuals considering business ventures. He specializes in Income Tax Planning, Strategic Planning and Personal Strategy Development.
Chuck is an entrepreneur that teaches others how to be successful in business and in their personal business. His practice is based in DeSoto, Texas and his client base stretches through Texas and throughout the country.
Chuck is an active member of the National Association of Black Accountants (NABA), a member of the American Institute of Certified Public Accountants (AICPA) and the North Carolina A&T Alumni Association (where he serves on the Board of Directors). He is licensed by The Texas State Board of Public Accountancy and the Certified Financial Planner Board of Standards.
Chuck is a graduate of North Carolina A&T State University where he majored in Accounting. He is a husband and father of two children. He has served as an Officer on numerous Boards and organizations. He is a consultant, lecturer, convention and banquet speaker, workshop leader, and subject matter authority on emerging business development, personal development, tax and strategy initiatives.
Chuck’s mission is to 1) Exceed client expectations; 2) Help clients make SMART money decisions through coaching, training and consulting; and 3) Deliver solutions that allow them to have the right amount of resources, in the right places, at the right time.
For more information about how to get into contact with Chuck please visit his website.