Should I Borrow Money to pay for a Vacation?
A vacation is something that many of us like to take regularly. It can be a great opportunity to get away with family or friends or to have some time alone. Many people enjoy the opportunity of getting away from work and having time to relax. However, vacations cost money and we do not always have enough to be able to pay for them. This means that if we want a vacation then we might be considering borrowing the cash to pay for it. There can be problems with doing this and some of these are identified below along with some alternatives to borrowing.
Disadvantages of borrowing for a vacation
Getting into debt can be stressful for some people. They worry about the responsibility and the cost of the debt. This stress could outweigh any relaxation that they get as a result of the vacation. However, if it is a family vacation, they may feel that it is worthwhile so that the other family members have a good time. However, it can be better if everyone can have a good time and feel the benefits afterwards.
The cost of the vacation will be a lot higher if you borrow money to pay for it. The cost of the loan will need to be added on to the cost of the vacation. It is important to decide whether you feel that it will still give you good value for money even considering the additional cost. This will depend on how expensive the loan is and what value you place on the vacation. If you can find a cheap loan then this could help matters, so if you are borrowing then make sure that you compare lenders and get the best value for money that you can find.
You could end up spending the next year or even longer repaying the loan that you used to fund the vacation. Then if you want another one, you could end up having to wait until this loan is repaid and then get another one to finance it. You could end up getting loan after loan if you keep wanting to have vacations and this is not a good way to be as you will always be in debt.
Alternative to borrowing
It would be much cheaper to save money each month and when you have enough use that to pay for a vacation. You will effectively be putting away money each month the same as you would if you were making repayments on a loan. You could even set up a direct debit to do so. You will have to delay your vacation until you have enough money put by to pay for it and you will have to have good self-discipline to make sure that you do not spend those savings on other things. The vacation will cost you less because you will not have to pay the loan charges. You will also not have the stress of being in debt when you return from the vacation. If you feel that the money you are saving each month is too much or too little you can change it and if you are short of money pay less and if you have extra pay more.
It will mean that you will have to delay the vacation until you have saved up for it and you may not be keen on doing this. However, if you keep borrowing for a vacation you are less likely to be able to have spare money to save up for one and then you will end having to borrow again. Going without one just once, could mean that you are able to get out of this pattern of borrowing. By saving up instead, your vacation will be a lot cheaper as you will not be paying interest on the loan and you will be gaining interest on the money that you save. You will therefore be able to go on a more expensive vacation, have some extra money available to spend while on vacation or have some extra money to spend on other things.
You may feel that you are not prepared to go without a vacation. However, there might be cheaper alternatives which you may be able to afford without a loan or you might be able to borrow less. Perhaps if you go for less time, spend time closer to home or even have a staycation. These can all still be relaxing and restful but they will cost less money. Another idea is to go with other people and see whether sharing the cost might make it cheaper. It may be that you can share driving so you do not need to pay to fly or that you can share a rental property that will be cheaper. It is also worth looking out for special offers and deals so that you can spend a bit less.