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Strategies for Paying off a Big Vacation

This post was written by Nancy, who is a regular contributor. She also runs a blog Savingforadream

I’ve only been involved in the miles and points travel hobby for a few years, but I’ve been fortunate that several of my family trips have been free or almost-free. However, I recently booked my family of five on a bucket-list trip—a Disney Cruise to Alaska in 2017! It’s a trip I’ve been dreaming about for six years. It won’t be cheap, and I definitely can’t make the entire trip “free” with miles and points because the cost is just too high.

My husband might try to get approved for another Barclaycard Arrival Plus card, and I may see if I can get the Capital One Venture card to help erase some of the cruise expenses (you can read about both offers here). But in order to make this bucket-list trip a reality, we need to save up a bunch of cold, hard cash.

 I would not be able to fully enjoy our big vacation if we waited until our payoff date and just charged the entire amount on an interest-bearing credit card. I don’t want to return from our vacation with a mountain of debt. With that in mind, I’m using the following strategies to pay off our big trip.

1) Break the trip costs into smaller chunks, and focus on one chunk at a time. This is really a mental strategy, but it works! If your trip is going to cost you $10k total, it can seem overwhelming to save up that much money, and you might become discouraged when small amounts don’t seem to be making a dent. Instead, divide your trip expenses into smaller chunks, and focus on paying off the smaller pieces one at a time.

Set yourself a savings goal for just your airfare first, accomplish that and celebrate, and then start saving for the hotel. For my family’s big trip, we booked two adjoining rooms on our Alaska cruise, and they each have separate reservation numbers. I am focusing on paying off one of our rooms first, and then I’ll move on to the next room.

2) Use bonus money. Obviously, the easiest way to pay for a big vacation is to use a yearly work bonus that covers the whole trip so that you don’t have to alter your monthly habits. However, bonuses are usually not guaranteed and fluctuate depending on the company’s performance. But consider other “bonus” money.

Do you get paid every other week? That is how my husband’s work paychecks are scheduled, so we will have two months during the year of three paychecks instead of two. We will be taking part of that “extra” paycheck for our trip expenses. Other potential bonuses include a tax refund, overpayment refund from doctors/dentist office, class action lawsuit payout (we actually got one last year for our Honda!), etc.

3Trim the fat. Take a good, hard look at your current monthly expenditures, and devise a plan to reduce some expenses. Trimming the fat from your monthly budget is usually painful because it involves lifestyle changes which you may or may not be willing to make.

For example, do you have Aldi or another discount grocery store in your area? Or can you switch to generic brands to save money on your groceries? Do you go out to eat a few times a week, and can you reduce your frequency? Can you bring your own coffee to work instead of stopping by Starbucks?

How about getting new quotes on your home and auto insurance to see if your premiums can be reduced? For my family, I’ve already trimmed the fat in so many ways, but I’ve slacked off on our grocery budget in the last year. We have a new Aldi opening right by our neighborhood, so I look forward to reducing our grocery bill after it opens.

4Shift money from expenses that are seasonal. For example, my daughter will enter kindergarten in the fall, and I just paid her last pre-school tuition. I will be shifting some of that money towards our trip. My kids also have some after-school activities that are suspended over the summer, so that is more money that I can temporarily shift towards our trip payoff.

5Use credit cards and reward cards to your advantage. Even though I’m not relying solely on credit card miles and points for this trip, I’m still using my cards as tools. I can use my Chase Ink Plus card to buy Disney gift cards at Staples or Office Depot to accumulate 5X Ultimate Rewards points. I can then use those points to transfer to Hyatt points for our pre-cruise hotel stay.

Also, recently American Express had a special offer for $25 off $100 purchase at Staples, which can be used to buy Hyatt or Southwest e-gift cards. Watch for shopping portal specials that may help you earn more miles and points just for paying off your trip.

6) Sell your stuff. Look around your house to find stuff you don’t use or need, and sell it at a garage sale. See if your neighborhood is having a community garage sale that would drive more traffic to your house on the day of the sale. Alternatively, you can sell your stuff on eBay or on a Facebook garage sale group.

Get your kids involved with this process! Ask them to search their rooms for toys or clothes they no longer want. Show them photos of your vacation destination so that they understand how the money from the garage sale will be used. My neighborhood is having its semi-annual garage sale next weekend, and whatever we make will go straight to Disney gift cards.

7Stack the little things. Find ways to earn small amounts of money, repeat, and save those small amounts over time to make a dent in the cost of your big trip. For example, I do my grocery shopping at Walmart. Last fall, I started using the Savings Catcher app. I take a photo of my receipt after each shopping trip, and the app scans my purchased items to see if they were advertised for a cheaper price at any local competitors.

If the item was cheaper somewhere else, I get that money back in my Savings Catcher account. The amount I get back varies each week, but usually it’s $1 -$5. That seems like a really small amount, right? But it takes almost no effort on my part. After I accumulate $25, I print out my rewards balance and buy a Disney gift card at Walmart. Since last fall, I’ve accumulated over $125 that I’ve applied to Disney gift cards.

savings catcher

That still may not seem like a lot of money to put towards an expensive vacation, but if you combine it with other small earnings, it adds up. I recently started using the Ibotta app, which is similar to the Walmart Savings Catcher except it can be used at different stores. Other ideas to generate small amounts of money include mystery shopping, Shopkick, online surveys, pet sitting, Fiverr, etc.

8) Buy yourself more time. I’m talking about more time on both the front and back end of your trip. Start saving for your big trip before you actually book it so that you will have more time before the payoff date. On the back end of the trip, buy yourself more time by charging the remaining portion of the trip on an interest-free credit card.

I realize this is a controversial option, but I have no problem using credit cards as a tool to lengthen our payoff period as long as we’re not paying interest. We have the Chase Disney Visa, which gives six months zero interest on Disney package vacations. Disney Cruise Line is coded as a package, so any payments we make on our Disney Visa towards our cruise get the benefit of no interest for six months.

Ideally, we want to be able to pay off our entire trip in cash before our deadline, but this is a great option if we need to stretch our payments for a few more months. For non-Disney vacations, check your current credit cards to see if they have any zero-interest promotions, or consider getting a new credit card with an interest-free promotion (we get those offers in the mail all the time!)

Bottom line

Whatever strategy or combination of strategies you use to save up for your big trip, make a point to do something every single month, even if it’s a small contribution. Don’t procrastinate with your savings! Your big trip will be here before you know it, and you will enjoy it more knowing that you won’t be facing a huge mound of debt after you return.

Readers, can you share any additional tips?

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Author: Leana

Leana is the owner and founder of Miles For Family. She enjoys beach vacations and visiting her family in Europe. Originally from Belarus, Leana resides in central Florida with her husband and two children.

11 thoughts on “Strategies for Paying off a Big Vacation

  1. Speaking of class action payouts…if you have the free time to sort through lawsuits to determine which ones you can qualify for and submit claims, there is a web site that keeps track of this stuff. Check out http://www.topclassactions.com. You would be surprised at the amount of stuff that is out there where you can throw your hat in the ring. Personally I don’t have the time, but I know some people that do.

    And on the “buy yourself time” – there have been some “0% interest on purchases offers” for 18-24 mos. from BoA and Citi floating around out there. Totally YMMV and you should only do what makes you financially comfortable (and be aware that high credit utilization on a single card can negatively impact your credit score by a few points).

    • Erik–Thanks for sharing the class action payout website. I’ll have to check it out! I’m surprised at how many class action mailers we get throughout the year. Most of the ones we get I don’t seem to qualify for, but when we got the notice about the Honda maintenance lawsuit for our car we jumped on it because we knew we had paid for that certain repair a few years ago. We got a few hundred dollars back once it was all settled. Woohoo!

      Back when my husband and I bought our first house, we utilized two no-interest credit cards to pay for a new fence and floors. They certainly came in handy for spreading out those expenses! But I don’t want to use that strategy too often. 🙂

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