Debt Baggage and Summer Holidays
The summer holidays are just around the corner and as much as we look forward to those few, fleeting days of home-grown British sunshine, it’s more likely that we’re considering the possibility of jetting off to warmer climes. Well, in the wake of recession, ongoing financial woes and unemployment, you’d be forgiven for thinking that we’re all tightening our belts and looking closer to home for our summer holiday.
We’re not though. The results of a recent poll conducted by the travel specialists at Lonely Planet seem to suggest that British holidaymakers will readily forego their frugal ways when it comes to funding their summer sojourn. Although a lot of the blame for the recession can be attributed to a general ‘buy now, pay later’ attitude to our finances, the media coverage that was devoted to the credit crunch has instilled a strong sense of credit caution. When it comes to holidays, it seems we’re ready to take a break a break from responsible spending.
About a quarter of Brits said that they would sell some of their possessions in order to fund a holiday; roughly one in ten would actually go to the length of taking out a loan or extending their overdraft to afford it. Perhaps even more telling, the survey suggested that 35% of Brits travelling abroad will be quite comfortable with putting it on their credit card and a measly 1% would let not being able to afford it put them off.
The other side of the argument is of course, that almost two thirds of those asked would not take on extra debt to pay for their holiday. Rather than buy now and pay later, they held true to the far more sensible practice of actually saving up for something before buying it. Naturally, some of those would have been willing to use a proportion of their savings on a holiday but that’s at least their money. The potential problems that they face are inherently less risky than those faced by holidaymakers who go into the red to get away.
We recommend that you have a contingency plan for any unexpected change in your financial circumstances. If you use a credit card to pay for your holiday, there’s a strong chance that it’s going to cost you more in the long run. There is also the ever present risk of unemployment in this volatile financial environment. Returning from your holiday to find that you have lost your job will make it extremely difficult to meet these repayments. So, start your summer holiday preparations far in advance by saving up for it.
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