I feel like I shouldn’t be saying this, but I do think it’s possible to get into debt to travel the world and still call yourself a responsible adult. (I admit that it can be a slippery slope, though.)
The only time we ever got into debt to travel was when we were in a long-distance relationship. Cheesy had the money upfront for the airfare to visit me and he was staying at my place, so accommodation was sorted. He also had some cash, but he still maxed out his credit card during the trip.
Once he got back home, he immediately started throwing as much money as he could toward that credit card balance and got it paid off within a couple of months. The debt doesn’t affect us in the long term, so I would say that we handled that like responsible adults would.
(Of course it would’ve been even more responsible to not max out the credit card in the first place. But we only saw each other twice that year, so…)
How to responsibly get into debt to travel the world
The sentence above may seem like an oxymoron, but it doesn’t have to be one.
I think one of the best things about being an adult is having the freedom to bend the rules. You know you’re supposed to do A, but you decide you’ll do B instead and it’ll be okay because you know what you’re doing.
The challenge is to make sure you really do know what you’re doing; you have to be 100% confident that the risk you take won’t land you in a bigger trouble than you can handle.
When it comes to getting into debt, the most important thing is to understand the implications of that debt. Simply put:
- You’ll have to pay interest on that debt.
- It will take you some time to pay off that debt.
Once you understand what getting into debt entails, it’s up to you to decide whether the risks and rewards are acceptable.
Paying debt interest
When you get into debt to travel, you’re essentially saying that you’re willing to pay more for the privilege of traveling now rather than at some other time in the future. For example, the trip may cost $2,000, but because you pay for it with a credit card and you don’t pay off the balance immediately, it ends up costing you $2,500.
So consider this question for a minute: is there a good reason why you need to take this trip now rather than later, when you’ll have saved up enough money?
And if you do have a good reason, weigh that up against the extra amount you’ll be paying in interest costs. Is it worth paying that extra $500 to travel now instead of three months from now? Visualize yourself holding a $500 travel coupon that you can only use three months from now — would you wait to use it or would you go now anyway?
Credit card debt should not be your go-to method to fund your travels. Think of all the money you’ll have to fork over to the bank — what are some ways you can put the cash to better use?
Doing the time
Once you get back from the trip (or once you start working at your destination, if you plan to travel full time and work overseas), you’ll have to start making payments toward your debt.
Don’t even think about just cruising by, only making the minimum payments. The longer you take to repay that debt, the more money you waste in interest. Sure, you’ll eventually pay off the debt, but that wouldn’t be very responsible of you. And we are talking about how to responsibly use debt here.
As you make these repayments, you may have to sacrifice your lifestyle. You may have to move back in with your parents, delay home ownership or put off your education.
Of course, this will only be a temporary setback if you take debt repayments seriously. But you need to know beforehand how long this temporary setback is going to be for you.
- How much money can you set aside for debt repayment each month?
- How long will it realistically take for you to completely pay off this debt?
- How do you feel about having to adopt an ultra-frugal lifestyle for that amount of time?
So should you get into debt to travel the world?
Before you take off to travel, sum things up in one sentence:
I’m going to take on a $___ debt, which will cost me $___ in interest and take me ___ weeks / months / years to pay off, because I urgently have to visit ___ to do ______.
Now, does it still seem like a good idea? If it does, then go for it. (Unless you already have a debt problem, in which case your priority should be to pay off your existing debt and you should only travel if you can pay for it upfront.)
Check out these interviews to read about other travelers’ experiences with debt:
- Anne took out a loan to travel and ended up spending 2 years to pay off that debt. After that experience, she decided to never get into debt to travel again. Click here to read Anne’s interview.
- Megan has gotten into credit card debt multiple times. She thinks it’s okay because, in her own words: “I always had full-time employment waiting for me once I came home from each trip and never spent what I knew I couldn’t pay off.” Click here to read Megan’s interview.
Image credit: Modified from an image by Wimena Kane (CC BY 2.0 License)