How to Handle Spring Break’s Financial Hangover

Piggy bank on beach adding up financial cost of Spring Break

The cost of going away for Spring Break can add up quickly if you’re not careful.

Three weeks after you get home from a “fun-in-the-sun” Spring Break, reality hits.  The only thing fading faster than your tan is your bank account.

In a perfect world, you would have done a little research, worked a few extra shifts in January, and then budgeted a Spring Break trip that didn’t break the bank.  But hey, isn’t university about trying new things and expanding your horizons?

Well, now the piper must be paid – and you shouldn’t make them wait.  If you spent a little more than you should have while blowing off some steam, there’s no use panicking, but it is time to make a plan and start executing it in order to limit the financial damage.

Becoming interested in Interest

Unfortunately when we’re on vacation and fully in our relaxation zone, it can be easy to spend money that you don’t have.  If this describes your current situation, the initial detail that requires your attention is what interest rate you are paying on the money that you borrowed.  The lower that you can get this number the better.

Here’s what I mean.

If you decided to give your credit card a workout, you’re likely paying a 19.99% annual interest rate.  If you racked up a $500 bill that will take you the next 12 months to full pay off at $50 per month, you’ll get hit with $51 in interest.

Now, if instead you got a student line of credit, and used it to pay off the credit card, this could help  chop the interest rate on your debt from 19.99% to potentially as low as the 4% range. It could mean crushing the debt one month sooner, and you paying less than $51 in interest. In this particular example, approximately $9 in interest instead.

While $51 doesn’t sound like the end of the world – those interest charges can snowball in a hurry.  What happens if you encounter another unexpected expense?  Say your car breaks down or you have to take a summer course.  Suddenly that $500 might be sitting on your credit card for longer than you anticipated and you’ll continue to pay more and more in interest.

Ways to pay off your Spring Break debt

The quicker you can learn a valuable lesson from your Spring Break spending spree and put it behind you, the better off you’ll be!

Taking a year to pay off your debt (even at a lower interest rate) isn’t ideal.  Instead you should look for a side hustle and get creative about ways to pay off that loan.  A few ideas to get the ball rolling:

1) Sell the stuff you don’t need – it’s cluttering up your dorm room anyway!

2) Log a couple hours as ride-app driver. It can be a quick way to snag some cash.

3) Use your brain power.  There are always scholarships and tutoring opportunities out there waiting to be seized by a motivated student!

Ultimately, it’s not the one-time Spring Break overspend that is going to be the final nail in your bank account’s coffin. It’s the accumulation of “one-times” and the overall negative spending habits that are most likely to sink you.  The sooner that you can climb out of debt and focus on creating long-term savings habits, the sooner you can get back to enjoying the mental lightness of a debt-free mindset.

Kyle Prevost

Kyle is a teacher by day and personal finance blogger by night. When he isn't limping up and down a basketball court, you can catch him on his soapbox at Birtle Collegiate or providing the answers to Gen Y’s questions over at YoungandThrifty.ca and MyUniversityMoney.com. He is also the co-author of a critically-acclaimed book for Canadian students: More Money for Beer and Textbooks and has written for several of Canada's premier publications including the National Post, Globe and Mail, and Metro News.

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