If you’re like 80 percent of Americans, you used a credit card to pay for your last vacation. The experience was probably well worth it, but you don’t want your debt to overtake you following your trip. It will weigh you down and potentially ruin your credit score. It’s vital to get your debt under control before heading out on another vacation. Here are some strategies to consider.
1. Consolidate Your Debt
Consolidating all your debts into one or two monthly payments instead of several will help you keep things under control. You won’t miss payments and you’ll be able to keep a better eye on your final balance.
Debt consolidation can be challenging, so it may be best to consult debt consolidation services. You can talk to your financial institution about your options or use an online company like Freedom Debt Relief or National Debt Relief.
2. Pay a Little Extra Each Month (and Pay on Time!)
Though you’re only required to make the minimum payment each month, it will be in your best interest to pay extra. Even $50 extra every month can make a huge dent in what you owe at the end of the year.
Additionally, pay your debts on time. You don’t want to damage your credit score because you were late on a payment here or there. Make debt relief a top priority in your finances to avoid serious financial hurt down the road.
3. Use Some of Your Savings
If your debt feels really unmanageable, don’t be afraid to dip into your emergency fund to try to tame the beast. It will help you catch up on missed payments and bring your balance down to a more manageable level.
4. Use Tax Returns and Bonuses
Another great way to get the debt snowball rolling is to use the money from your tax returns and work bonuses on debt instead of something else. You could be reducing your debt by thousands of dollars a year through this method, which will quickly take the burden off your last vacation and open doors to new travel opportunities. Oftentimes, you just need a large payment such as this one to get things moving and motivate you to continue your debt elimination efforts.
5. Budget with Debt Elimination in Mind
For most people, it’s highly possible to pay off all their debt in just a few years with the right budget. If you make $50,000 per year, try reducing your standard of living to $30,000 per year and use the extra $20,000 to pay off debts. It will be difficult and require some huge lifestyle adjustments, but it is possible, and it will give you the financial freedom you desire to travel to your heart’s content!