If you’re like most people your next vacation, long weekend, or holiday is a major focal point of how you motivate yourself to keep going by looking forward to that much deserved time off. I myself recently returned from a wonderful vacation that I had been looking forward to for months. I had money placed aside so that we could indulge in whatever activities we may encounter. Once we came back to reality and I updated my check book I found myself with a bit of buyer’s remorse. Did I really just spend two mortgage payments on a week of vacation? To emphasize the reality of this understand that the compounding interest over the life of the loan actually doubles the future impact of spending this money to around 4 payments.
So, should I never take a vacation because of the expense? My conclusion is no, that if I forego all frivolity I’d become less productive to my employer, in my entrepreneurial pursuits, and in personal financial endeavors. The result would be significantly more financially and psychologically damning than simply blowing too much money on vacation.
So what’s the answer? Spend or save? I lean toward spend but perhaps with a hint of frugality. The reason I lean toward spending is that I’m unwilling to lower my standard of lodging accommodations which is the largest single expense. Many people say you only sleep in a hotel room so get something cheap. I disagree, you don’t need a 5-star resort, but your family’s comfort and safety are far more important than the $50 a night you could save at a flea bag motel. Here are some ways you can reduce the cost of your vacation:
- Here’s the big one, watch where you’re eating, we ate out every meal and easily spent $100 a day on meals. Truthfully we could have had a sandwich in the room, eaten breakfast at the hotel, not ordered appetizers, etc. and could have cut that meal cost in half.
- Another is alcohol, now this one doesn’t apply to my family as we rarely drink, but it’s very easy to drop a wad of cash on drinks before you even know what happened. I’m not offering judgment or moral counseling on this issue, just watch what you’re spending and have a predetermined limit or you’ll get a tab that’s much higher than you wanted.
- Coffee, I’ll admit to this one, I spent easily $50 on coffee while on vacation, one on the drive down, one on the drive back, a few while out doing this or that, and bam at $5 a pop you’ve spent a chunk of cash. No real magic bullet on limiting this, you’re either willing to spend it or you’re not, my advice is similar to alcohol just be cognizant of your spending and know what you’ve spent.
- Activities are very costly so plan ahead, have some money set aside for opportunities but for major activities like concert tickets know what you’re comfortable spending and try to stay within those parameters. Also be sure to consider the extra costs such as parking, drinks, tips, etc.
Hopefully you’re lucky and you enjoy just hanging on the beach. Personally I’m good for a max of two hours per day and I’m going to need to do something else. I’m an AC, sitting at a computer kind of guy and the only time I want to be out in the sun is at a sporting event or working in my yard so when I vacation I tend to spend a lot of time out doing things…things cost money hence the dilemma.
Bottom line, just be aware of how much you’re comfortable spending, what you’ve already spent, and what other activities you already have planned. You can save yourself a lot of money just by taking a minute to think things through and be aware of what you’re doing beforehand.
Please send any questions or comments to Jeremy Woods.
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