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As 2023 draws closer, many people will start making their New Year’s resolutions list. Those yearning to see the world will put travel somewhere on the list, but it will usually come after resolving to pay off their debt first.
But being debt-free is optional for travel! Many people travel while actively paying off their mortgages and other debt, and everything we need to see the world is now more affordable than ever.
If you do some research, plan well, and use the tips below, you can pay off your mortgage while traveling the world.
Plan Your Spending and Set Aside Funds for Travel
Take an inventory of your finances as a start. Making a budget will enable you to determine how much money you require to pay your living expenses and mortgage repayments and how much money you may be able to set aside for vacations.
Make sure to account for your household expenses when creating your budget correctly. Determine your average weekly spending, then add your regular yearly and monthly payments for your home loan, phone, utilities, credit card, Internet, TV subscriptions, insurance, and other costs.
At first glance, this quick workout might discourage you from wanting to go on vacation again. However, it will assist you in creating a strategy and freeing up money in your budget for taking a holiday.
Utilizing Your Mortgage Loan to Fund a Vacation
After you’ve completed your budgeting and set a savings goal, use a different account for your travel funds. This will prevent it from being absorbed by your regular spending, allowing you to watch your trip savings grow.
A fantastic way to accomplish this is using your mortgage with a redraw facility as a travel kitty. It not only keeps your savings separate from your checking account but also offers you the added benefit of lowering your interest payments on your mortgage.
You can either make lump sum additions to your loan or raise your monthly loan repayments, which will encourage a regular holiday savings pattern. When you have enough savings and are ready to leave, redraw the additional repayments, and you’re on your way.
You can also consider switching to a lower interest home loan. You can research online and check websites like SoFi.com to learn more about low-interest home loans.
Begin Preparing Far in Advance
Saving for this vacation may take a little longer than when you were a young adult eager to go backpacking due to your home loan repayments and other living expenses. So, to give yourself more time to save, plan your vacation about a year in advance.
Avoid Accruing More Debt for Travel
It can be tempting to consider using a credit card for some purchases or perhaps applying for a personal loan if your holiday savings aren’t going as well as you had hoped. However, it is advisable to pay for as much of the vacation from savings as you can, as incurring extra debt would increase your list of expenses.
Can you afford to go from nation to nation for a month or two, perhaps longer? Unless you intend to rent out your home, most likely not.
Instead, consider scheduling your visits to last two weeks to a month, and choose places that are genuinely on your bucket list. Realistic thinking is also necessary while considering your lodging possibilities. Luxury can be very alluring, but if you can’t afford it, you shouldn’t.
Listing Your Residence on a Homestay Service like Airbnb
The advent of homestay services like Airbnb has made regular, cost-efficient traveling more feasible than ever. Securing occupancy on the short-term rental market and making monthly mortgage payments are made simple for homeowners by these online services.
Renting out your residence creates additional spare income that can be used for travel by having “someone else” pay the monthly mortgage payments. Naturally, this plan depends on a few critical factors, so research how to use Airbnb to pay off your mortgage while you travel.
Most people are strongly drawn to the allure of a relaxing vacation and far-off places. However, for many homeowners, traveling is only in their memories because of the burden of home loan obligations and the anxiety that comes with considering taking on more debt.
But the truth is, if you wait to pay off your mortgage, you’ll miss out on some of your best travel years, both for you and your family. Travel is when relationships and memories are formed.
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