Use this Dave Ramsey tip to control your vacation spending

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Dave Ramsey warns against taking on new debt to take a vacation.


Key points

  • Dave Ramsey doesn’t like debt.
  • He suggests paying cash to control your vacation spending.
  • Find out how to follow his advice and avoid spending too much on vacation without carrying cash.

Dave Ramsey is a financial guru many people turn to for advice. He is not a fan of debt and promotes his favorite strategies for getting out of debt. As you can imagine, Dave doesn’t believe in taking on new debt to take a vacation. Hoping to plan a getaway soon and want to avoid racking up more debt? Find out what her trick is for controlling your vacation spending.

Vacations can be fun, but they cost money. If you’re planning a getaway, it’s a good idea to consider the financial impact of your trip. If you’re not careful, you could get into debt.

Dave Ramsey thinks you shouldn’t take out a loan or use a credit card to pay for your vacation. Instead, he believes in using cash.

In a social media post, he wrote, “The best vacations are the ones that don’t follow you home. Pay CASH.” By using cash, you will know better how much money you are spending and can avoid incurring new debts.

Build up your vacation fund trip before you go on a trip

I think Dave makes a good point. Using cash to pay for your trip can help you stick to your budget. But I think you can take his advice without physically using cash on your travels.

Here’s how:

  • Start a vacation fund. Open a separate high-yield savings account and start saving for your vacation now. With this method, you can build your vacation fund over time and earn interest on your savings.
  • Before you travel, make sure you have enough cash on hand. When planning your trip details, consider all costs, including accommodations, transit, food, and activities. Build a vacation budget and save before your trip begins. You should also budget and save for unexpected expenses that may arise.
  • Use a rewards credit card. Once you’ve saved up enough money, book your trips with a rewards credit card. You can earn cash or other valuable rewards on your spending. Plus, you won’t worry about accidentally losing money while traveling.
  • Pay off your credit card balance in full. After completing your trip, pay your credit card balance in full. Use your vacation fund savings to do this. You won’t be charged expensive credit card interest if you pay off the full balance. Responsible credit card use like this 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 ensure you have enough money to finance your trips. And if you don’t have enough money to visit somewhere on your list, consider changing your plans to a more affordable trip.

But don’t ignore the rewards of credit cards and don’t miss the opportunity to establish or grow your credit by using credit cards responsibly. It is possible to go on vacation without going into debt if you make the right choices.

Should vacations be completely avoided?

Wondering if you should skip vacations to reach your financial goals sooner? In his teachings, Dave recommends not taking a vacation until you have a solid emergency fund and paying off all debt except mortgage debt.

I think you can go on vacation without incurring new debt, even if you have existing debt. You deserve to spend your hard-earned money on a well-deserved break. But I think being strategic in paying for your trip can help you better achieve your financial goals.

If your budget is tight and you prefer a getaway, these tips can help you spend less money:

  • Book your trip well in advance. If possible, start planning your trip as soon as possible. You’ll likely get cheaper fares if you book months before your trip begins.
  • To show creativity. A vacation doesn’t have to be a week-long adventure or an international getaway. Consider alternative travel ideas like a two-night stay at a campsite or a fun stay in your city.
  • Look for deals. Use online tools and pay attention to promotions to save on travel. You might be able to score cheap flights or get a cheap hotel deal.

As the cost of daily living increases, we’re all looking for ways to make smarter money moves. For additional advice, see our personal finance resources.

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