Dave Ramsey warns against taking on new debt to take a vacation.
- Dave Ramsey doesn’t like debt.
- He suggests paying with cash to keep your holiday expenses in check.
- Find out how you can follow his instructions and avoid overspending on vacation without carrying cash around.
Dave Ramsey is a financial guru that many people turn to for advice. Not a fan of debt, he promotes his favorite strategies to get out of debt. As you can imagine, Dave doesn’t believe in taking on new debt to take a vacation. Are you planning a short vacation soon and want to avoid further debt? Find out what his trick is to keeping your holiday spending in check.
Holidays can be fun, but they cost money. When planning a getaway, it’s a good idea to consider the financial implications of your trip. If you’re not careful, you could find yourself in debt.
Dave Ramsey believes you shouldn’t take out a loan or use a credit card to pay for your vacation. Instead, he believes in using cash.
in the a social media post, he writes: “The best holiday is one that doesn’t follow you home. Using cash gives you a better understanding of how much money you are spending and helps you avoid new debt.
Build up your vacation fund before you embark on a trip
I think Dave makes a good point. Paying for your trip with cash helps you stay on budget. But I think you can follow his guidance without physically using cash during your travels.
That’s how it’s done:
- Start a holiday fund. Open a high-yield separate savings account and start saving for your vacation now. This method allows you to build your vacation fund over time and earn interest on your savings.
- Before you travel, make sure you have enough money set aside. When planning the details of your trip, consider all costs, including accommodation, transportation, meals, and activities. Sketch out a vacation budget and start saving before your trip begins. You should also plan and save for any unexpected expenses that may arise.
- Use a rewards credit card. Once you’ve saved enough money, book your trips with a rewards credit card. You can earn cashback or other valuable rewards for your spending. Plus, you don’t have to worry about accidentally losing cash while traveling.
- Pay off your credit card balance in full. Pay off your entire credit card balance after your trip. Use your holiday fund for this. If you pay the full amount, you won’t be charged expensive credit card interest. Responsible use of credit cards like these can help you build your credit.
Yes, using cash to fund your trip is a good idea. You can save for your vacation expenses and make sure you have enough money to fund your travels. And if you don’t have enough money to visit a place on your list, consider changing your plans to take a cheaper trip.
But don’t ignore the credit card rewards and don’t miss the chance to establish or build your credit score through responsible credit card use. It’s possible to take vacations without going into debt as long as you take the right steps.
Should you give up a vacation altogether?
Wondering if you should skip a vacation to reach your financial goals sooner? In his teachings, Dave recommends not taking vacations until you have a solid emergency fund and have paid off all debts except mortgage debt.
I think you can take a vacation without getting into debt – even if you already have debt. You deserve to spend your hard-earned cash on a much-needed break. But I think planning your trip strategically can help you better meet your financial goals.
If you’re on a tight budget and prioritizing a getaway, these tips can help you spend less:
- Book your trip in good time. If possible, start planning your trip as early as possible. You’re likely to get cheaper prices if you book months in advance.
- Get creative. A vacation doesn’t have to be a week-long adventure or an international getaway. Consider alternative travel ideas like a two-night stay in a campsite or a fun stay in your city.
- Look for offers. Use online tools and watch out for promotions to save money when you travel. You may be able to book cheap flights or get a cheap hotel deal.
As the daily cost of living increases, we’re all looking for ways to move money smarter. Check out our personal finance resources for more tips.
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