If you’re like many Americans, a beach vacation won’t just leave you with a sunburn — it will also burn a hole in your wallet.

Nearly three-quarters of Americans have gone into debt to pay for a vacation, according to the results of a recent survey of 1,000 adults from financial planning platform LearnVest. Contributing to this trend is the fact that people do not financially account for vacations — the survey found that 55% of Americans don’t factor these expenses into their annual budgets.

On average, Americans will accrue $1,108 in debt for a vacation, according to the survey. Millennials are far more willing than other generations to go into debt over a trip (49%) than members of Generation X (37%) and baby boomers (18%). “People go into a ‘vacation mentality’ where not unlike Scarlett O’Hara, they will ‘worry about that tomorrow’ and then reality hits hard in the form of a credit card bill,” Lauren Lindsay, director of financial planning at Personal Financial Advisors in Covington, La., said in an email.

Racking up credit card or other forms of debt to pay for a trip has major repercussions, said LearnVest chief executive and founder Alexa von Tobel. “In the short-term, your credit score can suffer — this can affect your ability to rent an apartment or get a good rate on a mortgage or loan,” von Tobel said. “In the long term, you’re impacting your ability to retire financially sound.”

Also driving the vacation-related debt spirals many people find themselves in is the exorbitant amount Americans spend on leisure. Two-thirds of people said they will spend more on a week-long vacation than they do on a month’s rent or mortgage payment, the survey found.

People aren’t just going into debt over vacations — they’re also forgoing saving on other important life goals. Hoarding money for a holiday was the top financial priority for 32% of Americans, the study found, versus saving for a home (27%) or retirement (7%). And the ways people are saving for vacations, while helpful, are not necessarily adequate. Half of those polled said they eat out less often to save for a trip, and a similar amount of respondents said they cut back on shopping and other entertainment such as concerts or movies.

Financial planning experts said that those who love to travel should anticipate their vacation-related expenses well in advance. In particular, many suggest looking at previous years’ expenses and averaging out how much was spent on trips to get a ballpark estimate for how much to save annually for vacations — according to the LearnVest study, that comes out to about 10% of Americans’ annual income on average.

“The priority should be financial stability in case of an emergency before “fun stuff” like vacation spending — but of course, it is hard to prioritize competing goals,” said Ted Halpern, president and wealth adviser at Halpern Financial in Ashburn, Va. “Vacations may be what motivates you to keep saving toward your long term retirement goals.”

Financial advisers also recommended utilizing a savings account that has more lenient ATM and debit card fees, so that drawing on funds during a trip isn’t expensive in itself. And a smart strategy with credit card rewards can also defray the costs of a trip.

Source: MarketWatch