Vacation credit: the real cost of immediate enjoyment

In Europe, summer remains the peak season for traveling and taking vacations. According to Eurostat, one-third of tourism nights are concentrated in July and August, and more than half of long trips take place between June and September. Although the shoulder seasons (spring and autumn) are gaining weight, summer still dominates.

Vacations or taking a break are a real necessity, not just a luxury. Disconnecting, changing your environment, and recharging your energy is essential for our mental health and well-being. That’s why many people are willing to do whatever it takes to get away for a few days… even take out a loan. But at what cost?

Paradoxically, even though we know we need it, sometimes we can’t fully disconnect: phones, emails, and worries remain present. But let’s set that aside and focus on what we can control: the financial side.

The “post-vacation financial syndrome” effect

Taking out a loan for a vacation may seem harmless.

What are a few euros per month in exchange for a few dream days? But the real cost is not only economic. Besides paying interest, we drag payments for months for something that has already happened.

The following table shows the different monthly installments depending on the loan amount and interest rate, which, since it’s a consumer loan, will not be low. For example, imagine a couple with two children who need to finance a €5,000 vacation at 10%. As shown in the left table highlighted in orange (and the amounts needed for other combinations), they would have to pay 440 € each month for one year.

Consequently, the vacation will cost, following this example, €5,275 — or €275 more according to the next table.

Undoubtedly, we believe our body and mind require rest, but it’s also important to consider that this debt can become a psychological burden, the exact opposite of what we sought with the trip. In the extreme case of financing €10,000 at 20%, monthly payments would be €926, and the vacation would cost €1,116 more, totaling €11,116 (see the extreme amount on the right side of the tables above).

A healthier alternative: the “emotionation” piggy bank

The solution isn’t to give up on vacations, but to plan them intelligently. Instead of borrowing, we can apply the principle of “paying ourselves”: setting aside a certain amount each month in a dedicated “vacation account.”

The concept of “paying yourself” is usually applied to saving: if we want to ensure we save, the ideal is to put that amount aside right when we receive our salary. In this case, the principle is the same but applied to vacations.

If you know family vacations are significant and want to allocate €5,000 by August 2026, saving €414 per month (for example, between both spouses) will allow you to do so debt-free, interest-free… and stress-free.

Thus, vacations become a genuine emotional family investment, to which we give the priority they deserve.

This dedicated vacation account becomes both a financial and emotional piggy bank: it spares us the double anxiety of either not being able to afford the vacation or having to pay for it throughout the year.

Creating a dedicated vacation account is building an “emotionation” piggy bank: one that cares for both your wallet and your well-being, avoiding the stress of not being able to travel or having to pay for it over many months.

Simply make recurring contributions to your inbestMe savings portfolio (IRR 1.60%). In summary, saving €414 monthly with the generated returns ensures you’ll have €5,000 in a year.

You could also use a target portfolio (IRR 2.25%) choosing a maturity of about one year, although the first option would be more flexible for any date you might need.

At inbestMe, there are diversified index fund portfolios with higher expected returns, but since they are designed for longer-term goals and are subject to market volatility, they wouldn’t be suitable for a one-year objective.

Another alternative is simply setting aside that amount from your regular checking account, whether in a term deposit maturing the day before your vacation or in a virtual account with a clear name like “Vacations 2026—Do Not Touch.”

Freedom also means enjoying without regrets

Vacations shouldn’t be a source of stress, neither before nor after. Therefore, anticipating and budgeting this expense as part of your financial planning is an act of financial well-being. And if you automate that saving, you’ll free yourself mentally from having to decide every month.

Not only that, but financially, it will pay off. Following our example, the €5,000 vacation will cost a bit less—€4,963—saving you €312 (-6%) compared to financing it (€5,275 – €4,963 = €312). *

*Note: To simplify, we have not considered the effect of taxes on investment gains, which would slightly reduce this difference.

Better plan your vacations; you’ll enjoy twice as much.

Financial planning can feel tedious.

Taking out a loan for vacations might seem tempting, but it is usually a bad decision, both financially and emotionally.

If vacations really matter to you — and they do — treat them as such: give them a place in your planning, save in advance, and travel with the peace of mind of owing nothing to anyone… neither to yourself nor to the bank.

Do this by creating your own “emotionation” piggy bank.

In general, segregating our financial goals and even giving them names is one of the best ways to organize ourselves: it helps avoid temptations, maintain focus, and better withstand market volatility.

In this case, the emotionation piggy bank allows us to enjoy the vacation twice: while building it… and when we finally use it.

Much better than dragging debt or living with the frustration of not being able to take vacations or travel.