Avoid turning vacation into a budget-buster

With the summer travel season approaching, more people might want to consider paying for a vacation in advance or taking a trip that is already factored into the household budget, according to the Association of Independent Consumer Credit Counseling Agencies.

In a twist on the concept of a stay-at-home vacation, or “staycation,” the AICCCA is promoting the notion of a “paidcation” to help people manage the rising cost of fuel and other vacation-related expenses.

“Many consumers underestimate the cost of their vacations and wind up adding to their debt loads every year,” said David Jones, the association’s president.

The paidcation concept suggests a relatively straightforward checklist for planning a vacation that fits into the household balance sheet.

In considering the vacation budget, Mr. Jones advises either paying for the trip in advance or managing it so that it can be completely paid off within three months.

Going beyond three months, he said, could dramatically increase the total cost of the vacation through interest paid on the new debt.

Getting there might be half the fun, as the saying goes, but planning the travel portion of a vacation well in advance can result in a major cost savings. Even with gas prices around $4 a gallon, Mr. Jones said car travel remains the most economical means of transportation for families.

If staying in a hotel is part of the itinerary, families can save money by selecting a suite that has a kitchen to save money on meals.

It also makes sense to plan ahead to try to avoid the expensive malls, restaurants and theme parks.

“Consumers shouldn’t come home regretting a vacation and paying for it for years,” he said. “The way to avoid that is to pay for your vacation as you go.”

Related Topics: Wealth Management