It’s almost officially summer and that means one thing for a lot of families: vacation! While you may have your vacation destination(s) planned out in detail, how you’ll pay may be a whole different story.

The ideal vacation can run the gamut from a week at a family cottage to an exotic, off-the-beaten-path adventure. And costs vary accordingly. According to the Consumer Expenditure Survey by the Bureau of Labor Statistics, a domestic four-night trip costs an average of $581 per person, while the average 12-night international trip costs individuals $3,251. For a family of four, that adds up to $13,000!

This could be a conservative estimate, depending on your generation. According to a survey by AARP, Millennials are likely to spend the most on their vacations ($6,800 over a year), but older generations are not far behind – Baby Boomers spend almost $6,400 a year on travel.

If you’re shocked by these numbers, you’re likely not alone. Not recognizing how much vacations really cost may be why 74 percent of Americans say they go into debt to take their trips.

AARP found that the desire to take bucket-list and multigenerational trips are on the rise, which could push price tags even higher.

Sources: Shermans Travel; Cruise Web; Luxury Retreats

So if you’re thinking about a vacation and wanting to do something smarter than add to your high-interest credit card balance, is home equity a smart way to go?

Our answer

Home equity loans, with interest rates that are fixed and often much lower than credit cards, can seem like a smart alternative, but in most instances they are probably not the solution you should first reach for.

We don’t suggest using home equity for luxury purchases mostly because we think you should use your home equity for things that you really need and ideally will ultimately help your finances.

“In general people should align the “utilization” of the asset with the time that it takes to pay it off,” says John Sweeney, Head of Wealth and Asset Management at Figure. “If you take an annual vacation to the beach, you should be able to save for it (and all your other recurring annual vacations, like the Thanksgiving at grandmas) and pay them off within the year.”

You must always consider if you use your equity on a vacation and you need it later, you could be forced to pull out your credit cards, possibly for a much bigger expense. Worse, if you have trouble paying the loan back, your home could be at risk.

This all being said, if you have a lot of home equity built up there are instances where using some of it for a vacation may not be the worst decision. Perhaps you’re already taking the money for a home improvement project and have fully thought through repayment and have some cash left over. A vacation may be the break you need.

Another time it could possibly be justified is a once-in-a-lifetime trip - think Everest or kayaking the Patagonia. These are trips that you will likely only take once.

“If it’s a once in a lifetime trip, like a multi-generational safari or a family reunion on a cruise to Alaska, then you might consider paying for such an event over a longer period of time,” John explains. “In these cases, using home equity to pay for a unique event could be a less expensive method than using high- cost credit cards.

Being certain you can pay back your entire loan and that the monthly payments will not be a burden are key, no matter what you’re taking the loan for. Also keep in mind, you’ll have to pay money to open the loan. Figure Lending charges up to 4.99 percent for an origination fee for its home equity line of credit product. Other institutions may charge even more.