Make vacation planning part of your financial plan
This month’s newsletter will be a little different than usual. Since I’m writing this while sitting next to the Pacific Ocean, I am going to dedicate this to something that should be a part of your financial plan, but we rarely talk about it as such. Yes, I am talking about vacations. Vacations allow you to recharge your batteries, give you something to look forward to in the lean months, and allow you to reconnect with family and friends. Vacations come in all shapes, sizes, and price ranges. For me, the best vacations are often the ones with the least amount of preplanning involved.
As I think back, we have taken vacations of all sorts. Disney World, beach vacations, cruises, road trips to a new city, national parks, and the list goes on. While a lot of joy can come from the anticipation of a pending vacation, I do find that the vacations that require all of the planning on the front end tend to be my least favorite. Yes, this is kind of ironic as most of my life revolves around future planning. It’s tough for me to think about what restaurant I want to reserve six months before the trip (I’m looking at you, Disney). Even cruises are like that now. You have to plan out your vacation days months ahead of time if you want to do all the cool things that they offer.
The most memorable vacations of my childhood, and now my adulthood, are the ones where the itinerary is not dictated by things to go and do. They are remembered fondly for the time spent with people we love. As a kid, we went to Ocean City, Maryland a couple of times and just rented a house with my aunts, uncles, cousins, and grandparents. As an adult, we rent a beach house in Rhode Island with some of our closest friends. The beauty of this set up is the simplicity. Not a long checklist of things to see or do. Beach, food, family and friends. We decide what to do each day after we wake up.
If I am going to do some planning for a vacation, it is usually on the funding side of things. Vacations can be expensive, and if you are taking a once in a lifetime kind of trip, you might need to make some arrangements to save up for this large expense. Here are a couple of tips to make this easier.
- Give yourself a target number to save and use that as your budget for the trip.
- Set up a separate account to save this money in and set up regular contributions from your checking account to fund it.
- Make these contributions automatic. If you get paid twice a month, set up for that transfer to go into your vacation fund twice a month.
- Pay for all of your vacation expenses out of that account. By having this separate account set up for vacation, you will not feel guilty spending this money on your vacation.
One other note about vacations, some of my clients are using them as a test run for retirement. Although New York is a great state to raise a family, a bunch of folks are looking for different things in retirement. Some want to chase the sun, some want to be near grandkids, others want to make moves that will help them save on taxes. A vacation can be a great way to give a new location a try out. A week is long enough to know if it is a place you might like or not. But if you are serious about moving someplace new, plan on staying there a month or longer first.
It is finally summer. Get out there and enjoy it! Let me know where you are headed on vacation and definitely let me know if it is someplace I should check out.
