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Budgeting for Vacations

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KANSAS
posts: 979
reviews: 23
Budgeting for Vacations

Last night, my husband and I got into a serious conversation about vacations and the money which should be set aside. We are both curious how so many people on the forum take 3 and 4 vacations a year? We live a somewhat modest life. We both have good jobs. We don't have children or high car payments. Yet we struggle some years to make sure we have the funds to go on 1 nice vacation let alone 3 or 4. We would sure be interested to read your tips and tricks to budgeting multiple vacations.

Cortland, NY
posts: 2,338
reviews: 135
21. Re: Budgeting for Vacations

I am a teacher. We can only go on one large vacation a year...we budget $5,000 for that trip. I enjoy vacationing so much that I work a part time front desk job at a hotel to pay for my vacation habit. It also gives me perks for hotel stays for those smaller vacations. I agree that it is whatever you are passionate about. I am not one for expensive clothes or a gorgoeus home (probably because I am a teacher LOL!!) but I love to travel-and will do what I need to do to support that passion!

This June I am retiring, and although we are traveling to Puerto Morelos next week we have also booked a 15 day trip to Italy in September. I certainly realize that Italy will be a one time only trip, and I will savor every single minute of that experience!

Happy travels all!!

Cape Coral, Florida
Destination Expert
for San Pedro
posts: 11,603
reviews: 9
22. Re: Budgeting for Vacations

Before we retired, we took three or four vacations a year. We both worked, our kids are grown. We still live in the same house that we bought in 1976. We've done some remodeling, but, it's still a basic ranch style home, built in the 60's. We wouldn't have a mortgage, except five or six years ago we bought a condo in Belize.

We drive older cars. They've been paid for for years. Mine is small and cheap. DH had a long commute on some back roads, he needed a better quality car. He still has it.

We watch for airfare sales. We don't stay at resorts. For what people on here pay in a night for a very nice all inclusive, we can stay four or five nights and eat reasonably well besides.

As many have said, it's about priorities. Now, that we're retired, we travel more. Although, three months of that is at our own condo in Belize. This coming fall I'm thinking about a month in Puerto Vallarta (the condos I'm looking at are $500.00 a week). Then, maybe a road trip in the US, or a month in the Yucatan and Belize. Two weeks in December, somewhere in the Caribbean. That would be the first half of the month, way too expensive to travel over the holidays.

KANSAS
posts: 979
reviews: 23
23. Re: Budgeting for Vacations

Thank you all so much for your honesty. I liked the idea of not eating out. We just went grocery shopping and instead of coming home to eat the food we bought, we went to Chilis, watched a little March Madness and had a couple of beers, This cost $50.00. What is more important... the 1.5 hours at Chilis or going on vacation? I think you know my answer :-) We go out to eat at least once a week, just cutting back my 50 percent here will help. I can not remember who said it, but I love me some Cancun too :-)

KANSAS
posts: 979
reviews: 23
24. Re: Budgeting for Vacations

Ohhh the Ebay shopper... I am with you Sister!!! I get more remarks on my great swimwear on vacation... it all comes off EBAY for a fraction of the price!!

United Kingdom
posts: 384
reviews: 33
25. Re: Budgeting for Vacations

LauralP you sound like my kinda person! Enjoy Italy - it's magical, where are you going? :)

Cortland, NY
posts: 2,338
reviews: 135
26. Re: Budgeting for Vacations

@Wydcombe We are flying to Venice, going to Florence, Rome, Tuscany, Amalfi Coast, and flying home from Naples. Even if we have to eat hotcogs at home for months it will be worth every penny.

Limerick, Ireland
posts: 2,385
reviews: 66
27. Re: Budgeting for Vacations

I think everything I have, save for a few cheapo items, are all Ebay purchases from US Sellers. 100% Authentic, branded items shipped from the US to Ireland and still at least 75%+ cheaper than any store here. I never buy myself anything normally so I'm splurging for this big trip with even some digging around in TK Maxx.

I think the missus has gotten her entire wardrobe from the likes of Primark/Pennys and Forever 21. I love a Bargain and broke my Travel Agents heart about pricing.

San Jose
Destination Expert
for California
posts: 9,574
reviews: 77
28. Re: Budgeting for Vacations

We both travel for work, so we accrue miles and use them for our own travel. We then put money aside every month and save money from any bonuses that we get. Also, I am on a 2 week pay cycle, which means twice a year, I get 3 paychecks in a month - those extra checks go straight to the vacation fund. It all adds up.

United Kingdom
posts: 384
reviews: 33
29. Re: Budgeting for Vacations

LaurelP that sounds wonderful. Have you seen "A Room with a View" based on an EM Forster novel? It is set in Florence and ever since I watched it I have wanted to go there!

Florida
posts: 4,933
30. Re: Budgeting for Vacations

BACKWOODS_PRINCESS

When I used to work for a large company before being in business myself I would always budget for multiple vacation. Budget and discipline is a requirement for anyone to be financially stable. It is unbelievable how many people do not even budget for retirement.

Experts say that 95% of people are financially illiterate. This is not saying they are stupid but either do not know how to analyze financial decisions or do not bother . There is also a saying if you distributed all the money in the world equally (Obama's plan) 5 minutes later there would be rich people and there would be poor people. (This is why re-distribution will never work - but enough of the politics)

Anyway without picking on you, I saw you made a comment that you refinanced your mortgage and switched from a 30 year to 15 year. While this can be good in some ways at least on the surface it is not the best move financially, especially for someone who id disciplined and it sounds like you are a disciplined person.

To make a long story short interest rates are at historic lows and will not stay at these levels. It is difficult to look 10-15 years out but mortgage rates at some point in time will be back to the 5 to 6% rate at minimum. 30 year mortgages a few month ago were at 3.5%. So at 3.5% one would be much better off borrowing for as long as they can. If there was a 100 year mortgage at that rate you would be better off financially taking it. That is if you are disciplined.

The way it works is over long periods of time it is expected to easily earn more than 3.5% on your money. In fact the 10 year average of the stock market returns are 10% per year. So let's say you even only earned 6% of the extra 15 years of the mortgage (15 vs 30 year). If you have a 200,000 mortgage this means you would be earning 2.5% on the spread (6% investment return vs 3.5% mortgage). After 30 years of the mortgage this would amount to $419,000 you have in additional savings using that extra money you used to lower the mortgage to 15 years and investing it rather then lowering the mortgage term in years.