Tuesday, May 26, 2009

Only use Cash when Traveling

Despite the economy, some of you decided to travel this memorial day weekend. After returning to work today, you probably checked your account balances and found yourself up to you eyeballs in debt. The harsh reality of having to eat macaroni & cheese with ketchup until your next paycheck is probably starting to set in.

Unfortunately I can't go back in time to unspend your money, but I can show you the benefits of traveling with cash:

If you want to survive your next vacation without spending more than you can afford, it is crucial to save as much money as possible before trip. Once you have saved up some cash, take the total amount of the money saved and divide it by the number of vacation days to determine the your daily spending limit.

$500 Saved ÷ 5 days = $100 per Day

Cash is Good-If you're confident that you won't misplace the money or be robbed, I recommend withdrawing all of it at once, and putting each days ration in a separate envelopes. As you venture out from the hotel each day, grab you allocated money envelope. This will provide a ceiling or cap for your daily spending. If you get back to the hotel with money left over, then you can roll it over to the following day. If you run out of money, then you're vacationing outside your means, and you probably shouldn't buy the matching "I'm with Stupid" souvenir T-shirts anyway.

Credit Cards are Bad-The modern convenience of credit cards make it way too easy to rack up an enormous debt regardless of whether you have the means to pay. It is amazing how fast your debt will increase after paying for breakfast, the forgotten bottle of sunscreen, parking, admission to the attraction, souvenirs, lunch, gas, and dinner on the way home. All these small purchases will sneak up on you until WHAM!!!! You are confronted with a credit card bill that looks more like an overgrown ogre with a club, than a monetary exchange medium.

We take vacations to escape the demands of daily life, but if these vacations cause more financial stress upon return, we are better off without them.

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