Discussion: What is your opinion of Debt vs. Travel? So many of us are sitting on debts and loans from a myriad of life events. Do you try and save for travel and pay down debt simultaneously? Do you pay down all your debt before you can feel good about travelling? Do you just say YOLO and put the whole trip on your credit card if you want to go somewhere?
I'm curious to hear other people's opinions.

These days, I intially put it on my card and pay it before the trip happens

I think to do both is best, but do not create more debt to travel. Travel should be financed by saved monies. If you put it on your card to earn points or whatever, it should be paid in full asap....I pay my card within the 21 day grace period to avoid interest charges.

Debt free is amazing so I'd suggest doing that hard core 1st. Unless... after putting all your energy into paying it off for over a yr you realize that it's going to take more than 5yrs. Then take a budget friendly vacation (as in no more than $1100 for a wk). And have the money for the vacation saved before you book. I've gone to school etc and been debt free for years and it's been amazing I feel so much freedom.

You have your whole life to earn money. My philosophy is to travel while you have time and health.

I’d say it’s better to save up when you can, the vacation is a lot more relaxing and stress free when you aren’t worried about paying it off after. That said, I’ve also jumped on travel opportunities when they’ve arisen and not had the savings and paid it off after. So if you have to debt, but coming from both ends saving ahead of time is better.

Pay your debts first. You can have great experiences more locally in the meantime. There are restaurants from around the world in our city, plenty of festivals, and other cultural events.

I’m working three jobs now to get my debt out of the way. Once that’s done (about 4-5 years - student loans
) I’ll have like $800 a month I can put towards travel. I only get three weeks per year tho, but my vacation time maxes out at 6 week eventually

Yolo

Such a good question.
I think it depends on the amount of debt and what it's from. If it's a mortgage and car payments, I don't necessarily think you should wait before going on a trip.
If it's debt from poor budgeting I think one should work on that before spending money on travel.

Really depends on where we are going, there are lots of place in the world where you can travel and only spend $1000 over several weeks. Other places you are literally spending 1000$ for 4 days.
If I'm going somewhere cheap I don't really bother to save up for the trip, throw it on the card then pay it off in a couple of months after.
For somewhere more expensive like say Iceland, Europe, or Africa ($$$ to move around and do tours) I'll try and figure out a daily budget and save for that. Maybe 1/2 the trip I save for, then the other 1/2 on the ol' CC.
Nothing wrong with Yolo, but when you do go Yolo, set a budget for the trip and stick within that.

Both, you could die tomorrow.

I’ve never gone into debt to travel, nor for anything except big ticket items like my student loan, my mortgage and my car. Makes life less stressful. Also meant I didn’t travel much until I was about 40!

Dave Ramsey says.....get rid of debt. Eat beans and rice....pay your DEBT. Then you can live like no one else.

Get a good travel credit card and charge everything! I haven’t paid for a flight in years. We balance it out. People always say how lucky I am because I’ve traveled to so many places but it’s not luck. Some of it is being smart, and budgeting. Some of it is being fiscally irresponsible and taking trips we couldn’t afford. In my mid forties, with minimal debt, my son has seen a number of different countries and we have awesome memories. I have no regrets.

I use the westjet card for this - curious what card you recommend?

I could have written this! Travel points are amazing and I can't understand people who don't use them. Everything goes on the CC, pay the balance in full every month and watch the points rack up. We travel a lot as a family, almost all on points. I use the TD First Class Travel visa. Your points are basically used as cash - you purchase a flight on your visa (earning points) and then trade in your points to cover the cost of the flights on your visa bill. No blackout dates, you can use any airline you want, etc.

Trish it’s not as good as it used to be but I use the BMO World Elite. You get 1.5% towards travel. It can be used for anything, flights, hotel, car etc. It’s a credit.

Trish another one to check out is the RBC Avion card. You can use your points to book with any airline as long as you book at least two weeks in advance. I put everything on this card and pay it off each month. I also have a WJ MasterCard and use that mostly for Costco, but it’s good for the companion fare. Not as good as you can only use it for WJ flights though.

Thanks Ladies! this is helpful - I have the TD card but I rarely use it - time to get travel hacking!

Trish yes! In the last 9 months, my family of 4 flew to Nashville and Sydney Australia, all on points!

Trish also, I think we are related lol. My mom is an Aubin.

Kerry Rempel Avery I use Scotiabank Passport - no foreign exchange fees means I save even more on travel. Plus use points for any travel expense (flight, hotel, meals etc)

Kerry Rempel Avery I get these as airmiles on BMO World Elite, which limits flight availability. Are you getting something different from airmiles on this card?

Lara I don't use airmiles, I use BMO rewards which is different than airmiles. I used to collect airmiles but it was impossible to get flights and you have to pay the taxes. BMO Rewards is much better. https://bmorewards.com/en/home.html
BMOREWARDS.COM
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Kerry Rempel Avery good to know, thanks! Need to look into this!

I think everyone’s opinion will be different based on their financial situation. IF saving for a vacation or going on one sends you into anxiety then I suggest paying off the debt.
If you plan and are able to find a way to afford a vaca while making your debt payments then go for it.
Sadly life is short. That vacation with that 10 km hike may not be an option tomorrow with health reasons. Or your financial situation may not allow a vacation next year.
Your only young once you only have one life. So live it the way that makes you happy
Travel is my happy so we make it mandatory for at least one getaway a year. Our financials reflect where and how long-but we book about 9-12 months ahead

As mentioned as debt is a personal thing as to what you can live with. Travel is awesome and the main thing in my opinion is where are you hoping to go. Health and mobility are huge things to consider for some locations, so for those you go when can and pay later if need be. Waiting to go to somewhere like Rome when you may have mobility issues later will mean not going.

Pay off your debt then travel! And to make your trip even more enjoyable, pay for everything in advance. We don't go on a trip unless the plane tickets, car rentals and hotel costs are paid. Then we save enough for spending money to eliminate having to use our credit cards very much. There is nothing that spoils a great vacation than coming home and having to spend months paying for it! It may take longer before you take a trip but it sure is more fun!

Janet as someone who works in Healthcare I can say I’ve seen many a retirement dream of couple travel end because people kept waiting for the right moment.

Annie sad but true

Annie You are absolutely right! It happened to my parents so we really scrimped so we could afford travel before retirement. I just can't see going into huge debt to travel. It is indeed a juggling act. We went without cable TV and our kids went without gameboys etc so we could afford out first few trips. People have to decide what their tolerance is for debt.

YOLO so long as you know you have reasonable means to pay it off in the future. To have to wait until you're completely debt free to be able to see the world is a sad thought. I have debt, but I typically go places that are very cheap to visit.

We have debt we just don’t travel
2014 was our last vacation

I think you need to be smart about where you travel and how you do it.
We have debt that we are paying off and have still been able to travel to several places.
Go during low season, watch for seat sales and other deals (there are always tons).
Allocate a certain amount of money towards the debt and travel and just watch your everyday spending.
Our philosophy is to travel and enjoy life while we are still able to. Who knows what will happen tomorrow.

I agree! A balance between the two. Don't put life on hold but don't go YOLO either

We put some money in to a savings account for travelling and put some on our debt - do both at once. Never add the travelling to our debt unless it's just spending a bit more on the vacation that we can pay off on our cheque following the holiday.

sounds irresponsible

Debt free is best. Personally I wouldn't be able to relax knowing i had to come home to a pile of bill/debt.
If it is regular life(house/car payments)then ok, but if it is comsumer debt the definitely stay home and save up.

I am a travel agent with expedia Cruise Ship Centers and we just rolled out this new financing system. I think it will open up a whole new world for people that want to travel but don’t make it a priority or have it sitting on their credit cards absorbing an insane amount of compound interest. Once you are approved they do equal monthly payments based on your trip cost over a 12 month period. The kicker is that if you want to travel on Wednesday and take the year to pay you still can. Interest rate is based on credit score and runs from 1 time charge of 5/15% and that’s it. You need to have a debit or credit card and a smart phone. It’s pretty awesome. I just paid for my 2 week cruise that way. Feel free to reach out if you would like more information.

Generally I try to have an entire trip paid for prior to leaving so all I have to worry about is spending money (Flights, hotels, airbnb, tours, etc) booked and paid in full in advance.That being said - It really depends on the circumstance - I have been invited on trips that I can't afford and if its an experience worth putting on a credit card - I go. BUT I don't have kids to worry about and the only dependents I have are my pets - I think if I had a family it would be different.

Only borrow money when you have a secure future income to settle the debt + interest. Try to save for your trip: Cut down on eating out, gifts, luxury items, ancillary spending. Start a travel fund/account and deposit the money you save on the above (like if you werre going to eat out and it costs $50, put that $50 away in your fund). Saving for a higher cause (the trip you always wanted to take) is easier than general saving.

I am sadly too much aware of my mortality due to my line of work. Part of me says live while you can because you don’t know what tomorrow brings but you still need to have a home to come back to. If $ is an issue then you can do more budget friendly travel. Often its flights that cost the most. Many destinations have a wide array of accommodation etc. You need to enjoy life before you can’t.

Lots of people seem to be very responsible on here, saying to pay off debt before travelling. I had the same perspective myself.... until my best friend/roommate/cousin died suddenly in a car accident. Now I believe, whole-heartedly and with conviction, that you should do what you feel matters most to your heart. If you were to die tomorrow, would you feel more content knowing you were doing the fiscally responsible thing (which some people would, and fair to them), or would you regret not taking that trip your heart is yearning for? THAT is what I feel matters most.

I think living as though you are going to die tomorrow looks good on paper, but if you financially compromise yourself and you end up living after all... well, you will have negated all the positives of that trip. Personally, I am with the people who advocate a special fund for holidays that you pay into on a regular basis and the best holiday is one that is paid for. I've come home to credit card debt after a holiday and the believe me, the afterglow of the trip is much shorter than the pain of paying it off.

I agree with Les. I always had a trip account that I’d put money into as soon as I got paid. Then paid bills...whatever is what is left is spending money or put a little more into trip account or into paying down bills. Sometimes I’d only put $50. into that account and when possible I’d put $300.00 I also had some part time work on the side and all of those pay checks would go into the trip account. It takes no time to get a decent amount to travel with.

All of the above

Have a separate travel fund and contribute to it frequently through side projects etc.

I have a manulife one account, in recent years other banks have created accounts on a similar model. Basically it is a floating dept so as long as my debt and net present value are within my preset parameters I will go on vacations.

I used to do a combination of saving and paying down at the same time, and frequently said "YOLO" and booked a trip on credit cards... but all it left me with was growing debts and increased anxiety and guilt that came with it. Sure, I went on amazing trips, but I always came back feeling shitty for gaining more debt and undoing my progress of paying it off.
So, for the last year I committed to no trips, and put all the spare money I had toward the debt I'd accrued from previous years of travel... it wasn't easy, and I nearly said "fuck it" and booked a flight several times, but now I've paid off all $12,000 of debt, and I'm putting those huge payments into a savings account for a month-long trip to New Zealand next spring, guilt free. Plus, I'm saving for the trip so much faster because I'm not treading water paying off debts + interest at the same time.
My advice: pay off the debt first, then enjoy the freedom that comes after. But take small trips to the mountains once in a while to maintain sanity

Personally all consumer debt must be paid with savings in hand before I book. Which has lead to very little travel. Lol. But I won’t enjoy it if I’m charging it.

Live life to the fullest as if it is your last. You need to bear the ramification later when you put yourself into debts. I would rather make little adjustment like going on a small excursion ie camping. Get yourself recharge in a natural environment. No point living beyond what you can afford. Besides, you won't put pressure your relationship and have a good night sleep every night.

Don’t grow your debt. Period.

Travel, life is to short.

Don’t incur debt to travel. Ever! Especially if you already have other debt.

I live for today. Doesn't mean I will bury myself into a financial hole, but I am for sure not going to wait until I am debt free to travel.
To quote Jim Morrison "The future's uncertain, the end is always near"

I think a balance strategy is really helpful when you decide when to travel or not. Yes life is short but you might live long enough to be in so much debt and you have no income protection in place in cases of emergency. Hopefully we all stay healthy to keep earning and pay all our debts.

Retired so try to have the cash before setting out
Take visa for emergencies

We have an acct set up where it automatically pays us first off paycheques so the money is never missed. We then plan a trip when we have enough saved up to do it. So were still paying our bills and going on regular holidays.

Totally stupid to go on a trip if you are tight for money No question about this in my mind Do you want to try and support your family in difficult times or go on an expensive holiday? Priorities priorities

There is an expense for any education and l consider travel an eduction of life and culture.

My opinion is to have a plan to pay off debt within a certain time. I don't think if there's a mortgage or something though, to wait 40 years before you travel. For travel, plan beforehand on what you budget your expenses to be and save up for it. If somewhere further isn't do-able, perhaps somewhere closer or less expensive while still making good memories! I wouldn't borrow from a ton of credit cards to travel myself, but would still go and save up for vacation while paying off loans (having regular payments towards them).

I've been fighting a CC funded trip to holland

I never put anything on my credit card that I can't pay for within the month, and more often that I don't already have the money for. Sometimes that means I don't travel for longer periods, but when I do it's already paid for by the time I go, and not having to worry about paying for it makes the trip more enjoyable to me.

Depends on whats the interest on thedebt

We love to travel and travel is more expensive now that we have to travel with 2 kids. So, we save before trips, dont splurge on accommodation and always try to spend within our means when traveling. I strongly believe that my kids need to see that there is a world beyond home and make memories.
But, we are for sure holding on to our bottom lines like saving for education and retirement before travel.

Pay off the debt first. The vacation is much more relaxing if you aren’t constantly worried about how you are paying for it.

I love to travel and I’d love to travel more but my budget doesn’t allow for it. As long as I can escape winter once a year? I’m ok and can manage paying it off by CC.
This year, I enrolled in “Find and Save” through my online banking where my bank periodically (every few days or so depending on my deposits/balance) withdraws money from my checking account into a “hidden” account. Anywhere from about $10-$30 at a time. It’s like a debit purchase, I don’t miss the money and consider it spent.
In just over 6 months I’ve accumulated more than $1200 that I am putting towards a vacation (maybe 2) per year.
I’ll put them on my cc (for points/cash back) and pay it off completely from my secret stash!

Rob is that a Canadian bank thing?

Lynn not sure- I’m with RBC

Totally stupid to go on a trip if you are tight for money No question about this in my mind Do you want to try and support your family in difficult times or go on an expensive holiday? Priorities priorities

I say do it. Going into a little debt to see the other side of the world is worth it to me!

yes!

Debt for travel.
Let’s look at this a few ways. Is the traveling necesity or want?
Define debt? Does this mean credit card balance? Keep in mind what your interest rate is.
What is your short and mid term goals for paying off that debt?
Is your trip going to cost $3000? Is it going to sit on your credit card for five years? That $3000 compounding could cost you $7200-$8000 in 5 years if you haven’t caught up to this purchase yet on that credit card. Or up to $9600 in 6 years compounding. Or $11,500 in 7 years.
You can’t look at for example credit card debt as what you think you are going to pay the trip off in, you have to look at the total balance owing. If you carry debt for one year, $1000 for example becomes $1200. That $1200 compounds To $1440 in year two.
Travel is very important, but more importantly budgeting to travel is the right way to do it. Going into debt for travel, is something you need to consider financially based on your current situation.
My rule of thumb, pay cash. If you can’t afford it now, save. Put away x dollars per month delegated to travel.
If anybody out there is putting Travel on a credit card, and already has an outstanding balance on that credit card. Then a financial advisor is the best person you should be talking to.
For those unfamiliar with compounding interest, time to do some research.

Car and mortgage payments I would do simultaneously with travel. Any high interest debt (ie. Credit card) I would pay off first personally. I don't think I could really enjoy a vacay with the stress of high debt. I also reserve some savings specifically for travel also.

Following.
Excellent questions. I'm struggling with this, too.

If you are single, then just travel. You are just making excuses to not go. If you are anything but single, then dont go.

Ray Debt isn't an excuse, that's really bad advice.

I do both...try to pay my debts but also make it a priority to put a certain amount of money aside from every pay cheque into my vacation account for an annual trip. I am 51 years old and have already lost 3 friends in their 50s so I am not waiting for all the debts to be paid first. I have equity in my house and retirement savings, so don't feel the need to wait to travel.
I don't believe in putting myself in debt for a vacation, though.

I got into Oxford University for a music program this summer and have more debt than any normal person should; but it is Oxford so I used my credit cards to go. Now Im in school so no trips for 3 years except to visit my parents/son.

My boyfriend and I.. and our 3 kids... did travel to Japan this August even though we were still paying off other debt. Not something we would normally do, but we've been wanting to go for so long, and we have been making good progress on paying down the debt since then. In this case I would say yes, it was worth it. Generally we make it a policy to only travel on money that we actually have.

I do both. I save up for vacations and other fun things AND pay off debt at the same time!

I don’t believe in debt except for housing and transportation. Everything else you can put on a credit card for points or whatever but then go home and pay the bill. I look at it this way, why would you pay any company huge amounts of interest???

If you look at the big picture and think of it that way you will never end up travelling as most people own a house and that’s a good 20-30 years of “debt” till it’s paid off! Travel the world see what your heart wants to see and make memories cause those will be with you for life! life is too short to dwell on the “what if’s” just go for it and you won’t regret a moment
I have a family and manage both no problem, as long as you aren’t taking necessities away from yourself it’s an easy choice

just remember this ..lots of people save save for the rainy day...their debts all paid off...rrsp maxed .lots of cash in the bank afraid to spend....then something happens to their health.they have never been anywhere because they needed to save....at the end of the day someone will spend your money....dont get crazy with debt ...balance .....but experience the world..make memories ..meet new people..eat new food ..see new things...you have 1 life...

Pearl
Yup agree

As someone in finance I would recommend having a plan that will help eliminate your debt faster and then at the same time save for the vacation. Most people don't pay down their debt properly. stack your debt properly and without spending any more you will save time and money! Go get a plan to pay off your debt and earn your vacation. If anyone needs help on where to go or how to do it let the know and I can help out.

I have a travel account, i schedule monthly transfers just like a bill and I don’t touch it, I only use it for vacation. I will pay my vacation using the credit card for points then pay the credit card from vacation account.

I think debt free isn’t something to consider as I previously said. But car/mortgage will always be there. It’s the credit card debt that shouldn’t be “added to” to travel. You’ll end up spending waaaaay more on your trip with the interest. If a planned trip cost you more than expected then a “little debt” that you can pay off in a few short months that would be a good compromise.

Our debts before leaving for a year was a mortgage and car payments. We found a renter for our place and saved up enough to top up for mortgage payments and are also still making payments on the vehicle while abroad.