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Don’t Go Into Debt to Pay for Summer Vacation

By U.S. News & World Report

The allure of summer vacation may drive many Americans to spend more than they can afford. In fact, 1 in 5 vacationers said they will go into debt in order to pay for their summer getaways, according to a new MagnifyMoney survey.

Survey respondents say that they expect to spend an average of slightly less than $3,000 on vacation this year. About 20 percent of those vacation costs will be covered by some form of debt.

[See: 12 Frugal Ways to Save on Vacation.]

Using debt to pay for a big trip has never been more alluring. Americans are rekindling their love for plastic as household wages increase, and credit card rewards make it tempting to use plastic and rack up points that can be redeemed later. But credit cards also have the tendency to drive some consumers to spend more than they can afford.

Travelers who say they are planning to take on debt to pay for their vacation will spend nearly twice as much as the average vacationer. These debt users will spend $4,351 on average. Vacationers who plan to dodge debt will spend just $2,936. And debt users will use debt to cover an even larger share of their total vacation expenses — 38 percent versus 20 percent — according to the survey.

Not surprisingly, the vacationers who said they are debt-free were the least likely to finance their vacations with debt.

If you’d like to take a fantastic summer vacation — without racking up more credit card debt — here are a few tips to save on your getaway.

[See: 12 Habits to Help You Take Control of Your Credit.]

Don’t let your fear of missing out drive you into debt. In the survey, 31 percent of vacationers who have debt said they felt pressured to take a vacation, even though they’d rather pay down their debt. It can be difficult to stick to financial goals when it seems like everyone in your Instagram feed is uploading photos of themselves on the beach. Consider muting your social media apps for a while.

Visit a national park or state park. Skip the all-inclusive resort and plan a family camping trip to a state or national park. Parks typically charge less than $20 per person and many offer campsite rentals. Hiking is free, so pick up a map of nearby trails and spend the day exploring. By cooking your own meals on site, you’ll avoid pricey restaurant bills. Choose budget-friendly items you can repurpose for several meals. For example, a large container of oatmeal costs only a few dollars but should cover three breakfasts for a family of four. For mix-ins, purchase a jumbo container of trail mix, which can double as a snack during the day. Pick up enough ground beef for burgers one night and tacos another.

Use connections with family and friends. Lodging is one of the most expensive parts of any vacation. If you can find a free place to stay with family or friends, you’re well on your way to staying on budget. But you don’t always need a personal connection to save on lodging. If you live in a desirable city, you could check out house-swapping sites such as HomeExchange or HomeLink. The sites help match you with travelers who live where you want to travel and want to travel where you live.

[See: What to Do If You’ve Fallen (Way) Behind on Your Credit Card Payments.]

Make it a group trip. For young adults, planning a trip with several friends is a good way to spread out the expenses. You can split the costs of an Airbnb or hotel room, divvy up the cost of gas and cover your meals on your own. The only thing to worry about is that everyone pays a fair share of expenses. Use apps like Venmo and Splitwise to keep tabs on who owes what.

Save ahead of time. Waiting until the last minute to plan a vacation is one of the easiest ways to kill your budget. Prices for flights only get steeper the closer you book to your travel dates, and budget hotel rooms can fill up far in advance in popular destinations. Even if you may not know where you want to travel, at the very least consider opening a separate savings account at the beginning of the year and setting aside money from each paycheck.

Travel off-peak. Peak summer travel begins after Memorial Day and extends through Labor Day. If you can hold off on the urge to travel during those months, you can cash in on off-peak prices for big-budget items such as airfare and lodging. Daily deals sites, such as Groupon, can be particularly good at scrounging up discount getaways during off-peak months.

More from U.S. News

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12 Simple Ways to Raise Your Credit Score

Don’t Go Into Debt to Pay for Summer Vacation originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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