Taking a few weeks, a month, or even a year and seeing the world can be very fulfilling, and a lot of people are aching to travel after all the turmoil the world has experienced. If you’re planning to take some time off and go on your own adventure around the world, it’s well worth it to plan ahead.
WebMD’s article on the effects of travel on mental health discusses the value of relaxation and new experiences in boosting brain function and mood. By exploring the world around you, you open yourself up to happy memories and new knowledge. Of course, this all gets dampened and potentially cut short if you don’t handle your finances accordingly. Make sure you stick to some smart ways to keep your credit in check before you travel the world.
1. Get and Study Your Credit Report
The first thing you need to do is get a solid picture of your finances. You’ll want to get a look at your credit score to confirm whether or not you’re in fit standing to take on something as expensive as international travel. On top of this, you should get your credit report to have a full breakdown of your credit limits, payment history, pending debts, and lines of credit.
A guide to credit checks by Upgraded Points notes that any individual can get this information by requesting a soft credit check. It’s important to keep this distinction in mind, as hard credit checks temporarily lower your credit score and stay on your record for a few years. Thankfully, you can pull soft credit checks multiple times with no effect on your score. Plus, these don’t show up in the event that other financial bodies want to look at your report.
2. Map Out Your Budget
Once you have your report, you can make more informed decisions on your travel plans. It’s best to create a detailed budget ahead of time so you know how much money you need to set aside. This should also let you figure out what you can afford and whether you need to take on any additional work to make your way.
You should take into consideration how long you plan to travel but also keep unexpected expenses in mind. Lots of experts suggest getting travel insurance if you’re going to have an extended trip to protect yourself from huge losses and risks. Then, you should focus on the basics like flights, local transport, food, accommodations, and any activities you may want to do.
3. Get Rid of Outstanding Debt
It’s not recommended to go on a trip spanning multiple countries if you still have a chunk of debt waiting for you back home. This doesn’t mean you can’t go anywhere if you have any amount of debt. It’s just about managing huge payables and making sure you don’t put yourself in the hole by traveling.
According to a guide to debt ratios on Investopedia, a reasonable amount of debt should not exceed more than 36 percent of your gross income. This includes both housing expenses and debt service. If you’re taking on too much debt, then traveling may only serve to make your credit suffer.
4. Avoid Major Loans or Applications If Possible
If you want to go around the world, you want to minimize the total expense you have to shoulder every month. You may also want to preserve your credit score since you’ll likely face a number of unexpected costs when you travel. As much as possible, avoid taking out huge loans or making credit card applications. These will potentially lower your credit score and give you a harder time than you need when mapping out your travel finances.
You should also think twice before taking out a vacation loan. Even though this can be a useful resource to tide you by and increase your budget, there are also downsides that you need to consider. Forbes’ coverage of vacation loans finds that these loans not only impact your credit score but also add stressful monthly payments and increase the cost of the trip thanks to interest.
5. Manage Any Recurring Bills
Last but not least, you should figure out what to do with recurring bills that you already have. Think rent, utilities, subscription services, and the like. If you’re going to be away for an extended period of time, then you should either set up payments to keep your credit in good standing or officially cut off any payables that you will no longer make use of in the coming year.
There are so many amazing things to see in the world, so you should prioritize keeping your credit in check in order to make the most of your travel opportunities. Check out Moss and Fog’s best travel posts for some inspiration as you plan out your adventure.