I’m often asked the question, of why I travel and have posted about it before.
But I need to make it very clear that I’m not one who can travel around the world or far distances any time I want.
For one, like many people, there are responsibilities that come first. And also like many others, I only have so many days in vacation time, so I need to plan things out in advance.
But I’m often asked, “Should I travel if I have debt?”.
I believe, and I first have to say that this is my thoughts specifically for myself and how I do things, you need to have that emergency fund set for yourself. Your bills for when you are gone must be covered and if you can save enough for your trip, then go for it.
But the prevailing goal is to pay off major debt as quickly as possible and doing so may seem painful but the closer you get to being free from each shackle, may it be credit card debt(s), college loan debt, car loan payments to your house payments, the more you can free yourself from the chains that bind you, the better things will be.
The things I’ve done to pay off debt, is not for everyone. Not long after college, I ran my business and worked part-time for the USPS for several years to pay off my college loan debt and part of the reason I worked day and night was because my college loans split into three. Three different banks, three different loan payments and it was hurting me. Sure, they warn you about this before you get your college loan but I never expected to be that bad, so I had to face the reality. Do whatever it was necessary to pay things off.
During the 2008 economic collapse, I saw my income take a dive and each year, it got worse and worse, because if my clients were not getting paid (or getting paid late), I was not going to get paid or get paid late. I can easily remember, advertising agencies to major clients telling me they are not doing any advertising, marketing or design or that publications were adding that service for free. There was no way I could compete with free and so for several years, I lived with the bare necessities.
I would go through my account software and just seeing where I was financially per month, what services I could drop and then whichever extra money I made, I would deposit and then build my emergency fund. Starting off with a few months ahead and then six months ahead and I have kept this philosophy.
If I want to travel, I know I could because I can dip into a month or two of my emergency fund and then replenish it again.
If anything, I don’t keep with a mindset of living month-by-month, some people can do that…I just can’t. I want to know that if something bad happens, I have the financial means to pay my bills for the month and if needed, I have an emergency fund to turn to.
And trust me, it helps…may it be unexpected bills, car problems, medical payments, it’s good to know you have that covered if you need to dip into that.
But it’s important to free yourself from the shackles of debt. I’ve known people who travel but they just put everything on their credit card and then they do it so much that it bites them in the rear. Their credit card debt is higher than they can manage, their interest rate is high and escaping from it looks futile. A lot of their income goes into credit card debt.
So, should you travel or pay off debt? Pay off your debt should be a priority. But if you are able to create that emergency fund and feel you can continue to pay off debt (with more than the minimum payment) and travel, then definitely go for it!
