How to Get Back on Track After an Expensive Vacation

Regardless of what the weather forecast says, summer is coming to an end, and so is the peak of summer travel. When you return from vacation, you’re hoping to bring a few things back into your real life: souvenirs, a healthy tan, and maybe even a more relaxed version of yourself. What you don’t want to pay back: post-vacation debts.

I believe that taking on a little debt is worth a lifetime’s worth of memories. That being said, spending too much “carpe diem” can seriously impact your finances if you’re not careful about getting your budget back on track. If you’ve just returned from a luxury (already expensive) trip, here are some tips to help you recover financially.

Review your expenses

Your first step is to face the man in the mirror or, you know, take stock of what you spent money on while on vacation. Review your credit card and bank account statements for details. This will help you understand where your money went and make more informed decisions moving forward. Expect extravagant events, fine dining, souvenir shopping and premium accommodations that add up quickly. Here’s our guide to conducting an expense audit .

Cut the budget

Now it’s time to look at your monthly budget and identify areas where you can cut costs. For example, you can eat out less, limit your entertainment spending, cut other expenses, and pause non-essential subscriptions. Avoid making drastic cuts to essentials such as food and shelter. The goal is to cut discretionary spending to pay off holiday debt faster. Even small discounts of $5 to $10 per category will make a difference, or at least give you a sense of control after your vacation.

Try to cash in

The cash method, or “envelope system,” helps make budgeting a more intuitive, even “gamified” experience. You have different physical envelopes for different expenses, and you fill each envelope with the planned amount of money for that month (or pay period). The key point here is that you can only spend money in a certain category from the envelope assigned to it. As soon as the envelope is empty, the month will end.

Cash stuffing works because it forces you to be more intentional (deciding how much money will be put in your envelopes) and more disciplined (you won’t be able to put more money in the envelope when it runs out).

Pay off debts aggressively

Use the extra money freed up by budget cuts to pay off any holiday debts you accumulated as quickly as possible. Pay more than the minimum payment on credit cards. If your interest rate is high, consider transferring your balance to a card with a lower interest rate . If you have large debts, you may need to develop a debt repayment plan . Time is of the essence here; the faster you can pay it off, the less interest you’ll pay over time.

Refocus on your savings

As vacation debt goes down, redirect those funds toward rebuilding your emergency savings account. Having this financial cushion is essential to preventing you from falling back into debt due to unexpected expenses. Aim to ultimately save three to six months’ worth of living expenses . Only after you’ve built up your savings should you redirect the money to other financial goals.

Be patient now and take the initiative next time.

Getting back on track financially after a nice vacation takes time, especially if you’ve racked up a little more debt than you thought you would. The worst thing you can do is simply give up and let your vacation spending habits carry over into your real life. Instead, be kind to yourself about your less-than-ideal spending. Stick to your budget-cutting and debt-paying plan, and your finances will recover.

Next time you’re planning your dream vacation, budget more responsibly from the start. Before you hit the road, set a reasonable spending limit and track your spending along the way. Consider saving for your trip in advance to avoid debt after your trip; What’s more, here’s our guide to affordable holidays .