Vacation on a Budget - Doesn't Mean What You Think

We are less than a week away from our big family vacation.  Hooray!  Most of our planning is done, although we still have a few items to take care of before we depart.

As we head towards our departure date, I need to do laundry and pack.  I also have one more Amazon Prime order to execute on.  But as for our travel plan, the airline tickets are paid for, the hotels are reserved and the rental car is booked.

We vacation on a budget, but we don't scrimp.  What does that mean you ask?  Well it means that we always have a short term savings account earmarked for travel/vacation.  We also have an automatic deposit set up, so $200 per pay period goes into our vacation/travel fund.  That normally means that we have more than enough in our travel/savings account to pay cash for airline tickets.  After our airline tickets are booked and our vacation is planned I often up extra savings into our travel/vacation fund to make sure we have more than enough cash on hand for our hotel, rental car and spending.  This time around we didn't need to since our savings account was well funded.

I don't scrimp when I go on vacation, so I normally budget at least $100 a day for food which seems like a lot, but if you are eating out or stopping at a local brewery for a couple of $10 beers it works out to the right amount for us.  I also think about and plan for other spending, we'll be stopping at two national parks, so I'm accounting for entry fees, gas, and misc. spending on a t-shirt here or there or a special souvenir.  Mr. Sam likes to pick up t-shirts on his travel and he wears them a lot.  I like a more upscale souvenir, a piece of art from a local or maybe a handcrafted piece of jewelry.  I am picky so that means I often come home with nothing and that is ok.  Baby Sam gets to pick out something fun for herself that is inexpensive and I will likely pick out something for her along the way.  I normally set aside another $100 in cash for misc. spending.

All of this preplanning means that when we get home from vacation we only bring memories, a rock or two for our collection and no debt.

Dreaming of Faraway Lands

I've been dreaming about a 10 day or two week trip to a particular country for more than 10 years.  While we keep a "travel" savings account that we add to each pay period, I've decided to start a travel savings account for this dream trip. 

It may seem odd to be thinking of a dream trip in the middle of dealing with Mr. Sam's layoff, his unemployment, and the uncertainty of our finances and future savings.  But, I've been thinking about this trip for a long, long time and I want to start planning for it.  Opening a savings account, which if necessary can be used for other expenses, is a way for me to do a little dreaming and planning without incurring any real costs. 

Working Vacations

Even with Mr. Sam's work issues, we just returned from a long weekend.  While, we could have cancelled the trip, this preplanned long weekend will probably be our only vacation together this summer so I voted to move forward with our trip.  I do have an upcoming family trip which is not really a vacation and Mr. Sam will not attend.

And, even though Mr. Sam was not really excited about this trip, mostly because he is worried about finding a new job, we had a great time.  We spent time together, we relaxed, we spent time with friends, we had fun, etc.

But, like most professional Americans, I never really disconnected from my office.  My normal vacation/work protocol is to work, in a focused manner, during travel time.  I specifically bring work that is easier to tote or that is in .pdf form on my iPad so I can read or review materials while flying or driving (assuming that Mr. Sam does the driving).  Then when I arrive at our vacation destination, I generally stop working but I continue to attend to emails/deadlines and issues that may arise.  I try to limit how often I check emails to early morning, lunch and then mid-afternoon (before my assistant leaves for the day).

I would like to disconnect when I'm on vacation, but coming back to several days of unread emails almost ruins the point of vacation.  Today is my first day back in the office and I've spent nearly half the day reading all my emails even though I was keeping an eye on them and responding to important ones.  If I had disconnected altogether I'd lose even more time.

What do you do?  If your stay connected to the office during your vacations, how does that impact your ability to relax and recharge?  How does your spouse feel if you work during a family vacation?   

2012 Savings Goal - Update

(1) Max out 401k(s) - $33,293 (98%)(goal is $34,000)
(2) Max out IRA(s) - $10,000 (100%)(goal is $10,000)
(3) Add to e/r fund - $9,600 (96%)(goal is $10,000)
(4) Pay down mortgage - $2,490 (50%)(goal is $5,000)
(4)(a) Savings for goal (4) - $1,250
(5) House projects - $1,500 (30%)(goal is $5,000)
(6) Trading account fund - $50 (1%)(goal is $5,000)

Total - $58,183 (84%)

Well, the good news is we have finished maxing our our non-deductible IRAs for 2012.  The other good news is that we are on track to max out our 401ks and to complete our emergency fund goal.

As, I posted previously, our revised* goal is to complete goals 1-4 which means that as of today, we have to save another $2,357 before the end of the year.  I am confident that we can do it.  We have, generally, completed our holiday spending (which is funded by our ING holiday savings account).  I have a trip this weekend, that is paid for already.  We, also, have a New Year's trip planned, we've paid for the condo for the trip, but we will have gas, grocery and misc. expenses associated with that trip.  My hope and plan is to have our 2012 savings completed before we head off on our New Year's trip.

* We are $8,163 behind on our original 2012 goals.  

Goal Setting

As I start planning our 2013 savings goals and I reflect on our progress to date on our 2012 savings goals this NYT Bucks Post by Carl Richards really resonated with me.

When setting an important goal, he focuses on financial goals, how do you respond to the question "how badly do you want it?"

Mr. Richards notes that there are generally two kinds of answers to this questions:

• I want it badly, and I’ll do whatever it takes to get there.
• I want it badly, but I don’t think it’s possible.

Looking at my own history of financial goal setting, in 2007 (shortly after my marriage to Mr. Sam and on a trip to Key West, Florida) I decided that we would pay off all of our unsecured debt, which exceeded $55,000.  I also decided that we would pay off all that debt in one year.

When I set our 2007 debt killing goals, I had the mindset that I (we) would do anything to reach our goals.  Frankly, Mr. Sam thought I was a bit loony and he wasn't on board until he saw the plan on paper.  During 2007 there were a number of times that we got derailed and our plan seemed like it was destined for failure. What did we do, we doubled our resolve and get going.  The result, we paid off $55,500+ in just over a year.

Thinking about our 2012 savings goals, I can honestly say that we did want to save $69,000 but we were unwilling to change our lifestyle to meet our goals.  Yes there were lots of other important expenses, our refi expenses, Mr. Sam's certification classes, that derailed us.  But, more importantly, we did not make the sacrifice necessary to meet our goals.

I'll be thinking about this article as we set our 2013 savings goals and its further applicable to some career goals and personal goals that I'm working on.

2012 Savings Goals - November Update

(1) Max out 401k(s) - $31,379 (92%)(goal is $34,000)
(2) Max out IRA(s) - $5,829 (58%)(goal is $10,000)
(3) Add to e/r fund - $8,400 (84%)(goal is $10,000)
(4) Pay down mortgage - $2490 (50%)(goal is $5,000)
(4)(a) Savings for goal (4) - $415
(5) House projects - $1,200 (24%)(goal is $5,000)
(6) Trading account fund - $50 (1%)(goal is $5,000)

Total - $49,763 (72%)

I've added a sub goal to our list, since at present, I'm allocating our mortgage paydown money to savings until I figure out how to prepay our new mortgage.

At present, we are approximately $9,900 behind on our 2012 goals and the gap is approaching $10,000.

What can I say about our current savings deficit and the fact that it continues to grow?

I can tell you that (1) we've spent thousands on certifications for Mr. Sam this year (to improve career opportunities); (2) I can tell you we spent thousands on refinancing our primary dwelling and (3) thousands on fixing our our primary dwelling for the appraisal for the refi; and (4) recently a few thousands on some projects at Rental # 3.

But, I can also tell you that in the face of the above we have failed to change our lifestyle in any significant manner.  We continue to eat out more than we should.  I just booked a girls weekend in South Beach, Miami and, of course, I just bought some fabulous art. 

So, with two months to go, including the expensive holiday season, it seems doubtful that we will reach our $69,000 number.  Rather, at this point, while I'm not amending our goals, I'm hoping to meet and surpass last year's savings number which was $60,060.

Can I Afford It?

I just returned from another fabulous, annual Memorial Day weekend girls trip.  The trip was expensive, nice hotel, pricey flight, fabulous 5 star dinners every night.  But, as you know, I plan for these trips and put away money each month for our travel expenses.  So this trip came in on budget, but it still was an expensive outing especially in light of the fact that Mr. Sam may not have a job at the end of the year.

While we did some great browsing in some great galleries and boutiques, I didn't actually buy anything on my trip.  I was interested in a hand made regional flavor basket, that would cost between $200-$300 (depending on size).  I decided not to buy it in the touristy area because I figured, and I was correct, that I could find a better price away from the hustle and bustle.  Then I was in a gallery and found a large piece of original art that I fell in love with.  In the gallery, it was priced at $750, but on-line it is priced at $625. Plus, I'd have to pay shipping which would tag on another $50 or so, but I don't have to pay sales tax.  So all together it would cost around $675.

I'm not a huge fan of Suze Orman but I've always liked her  "Can We Afford It" segments.  So this is my version of Orman's can I afford it.

Now, we don't have any unsecured debt, but we do have lots of mortgage debt.   However, at present, all of our investment properties are rented and paying for themselves.  We also have almost $18,000 in our emergency fund.

But, the elephant in the room is Mr. Sam's job.  We know there is a good chance that he will lose his job at the end of the year.  As a result we've been spending big dollars on some certification classes for him and therefore we are behind on our 2012 savings goals.  More importantly, we probably should be saving even more because of the high probability that Mr. Sam will be unemployed.

And putting that all aside, there are other home projects, i.e. plantations shutters and other improvements, that we could use this money for.

What do you think?  Can I afford it?

This Won't Last Long

This won't last long, but its always exciting when our ING savings total* breaks $40,000.  Our home owners insurance and wind storm is due in June so the total will drop in a few weeks, but I'll enjoy it for now.

* We keep several sub accounts at ING, dating back to the days when it paid 4% (at present is paying .80%) including escrow accounts for each property, travel/vacation savings account, our emergency account, house account, holiday/gifts account, etc.

2012 Goals Update - Mid May

(1) Max out 401k(s) - $15,186 (45%)(goal is $34,000)
(2) Max out IRA(s) - $2500 (25%)(goal is $10,000)
(3) Add to e/r fund - $4400 (44%)(goal is $10,000)
(4) Pay down mortgage - $2075 (42%)(goal is $5,000)
(5) House projects - $550 (11%) (goal is $5,000)
(6)  Trading account fund - $0 (0%(goal is $5,000)

Total - $24,711 (36%)

At present, we are $3154 behind on our goals.  We have made some progress this month on catching up.  And, since this is a month in which I am paid three times, 5/3, 5/17 and 5/31, I am expecting to make up some more ground at the end of the month.

But, it has also been a spendy month.  As I mentioned previously, one expensive, unplanned family trip cost about $1000 (I put all of my recent small bonus towards those costs).  And, I have one planned girls trip coming up over Memorial Day weekend.  While my girls trip is budgeted for, it certainly doesn't help us make up any ground to be spending money on a trip.

Every Little Bit Helps

I will be receiving a small bonus this year at work - $1000.  The bulk of that bonus will be going to pay for a last minute family trip that was (1) expensive (due to last minute nature) and (2) not budgeted for.

Any amount left from the bonus monies will go towards our 2012 IRA goal.

A Snowflaking Reminder

We are making very slow progress on our 2012 goals, at present we are more than $5000 behind on our goals.  There are lots of very good reasons for our slow progress, mostly related to Mr. Sam's certification classes and the costs related to same.  There are also some lame reasons for our slow progress, mostly starting late and not keeping day to day expenses in check.

I have two trips coming up in May, one unplanned trip for family reasons and one planned trip that I take each Memorial day weekend.  I budgeted for the planned trip but not, surprise, the unplanned trip.  So, I had a very expensive plane ticket, more than $600, and there will be additional costs as well.

So while I just paid our beginning of the month bills on my lunch hour, I debated as to whether we can afford to put aside money for our 2012 IRA goal at present.  Normally, I sock away money for this goal in $500 or $1000 increments, but there is no way we can do that this month.

So I pondered the issue for a few minutes and eventually went back to the lessons learned in 2007 when we were paying off $55,000 in debt.  And what is that lesson?  Every little bit counts.  When we working to pay off our debt, I would make multiple payments during the month, some were big and some were small (those small payments are known as snowflakes in the debt snowball vernacular).  The idea is to keep moving forward, keeping chipping away at the debt.  So, I took that lesson and applied it to our savings goal, we con't do $1000 or $500 towards the 2012 IRA today, but we can do $100.  And that is what I did, I transferred $100 to our 2012 IRA account.

Forward progress is forward progress.

"This is Peggy . . ."

You know that Discover credit card commerical, where "Peggy" is the male customer service representative with the thick accent and he gives the confusing run around to the consumer's credit card problem.  Well, I had a similar problem with Capital One and as a result I have closed my Capital One account.

As you probably know if you read this blog regularly, we don't use credit cards for day to day expenses.  But we do have a credit card and we do use it for travel expenses.  Back in May 2011, I went on a girls' trip to Las Vegas and ended up charging an outing on my credit card.  We didn't get what we contracted for and I learned a few lessons that I wanted to share. 

First, and I'm not sure if this is actually a tip that will work, but I learned not to sign a credit card slip for an outing before the outing is underway.  The company used the fact that I signed the credit card slip against me in the credit card dispute.  I had been drinking, we were in Vegas after all, and the slip was presented to me to sign before we got on our way.  When you sign the slip you are, evidently, aknowledging receipt of the services and since the service had not yet started I should have said I won't sign until the end of the night.  However, I'm not certain that we would have been able to go on the outing until I signed the credit card slip, so perhaps the suggestion should be to make some notation on the slip that I was being asked to sign before we got underway.  

Second, we did a charge back and when I received the letter from Captial One setting forth the company's response I should have responded in written form with my evidence.  Instead, I opted to call Capital One, which was an option presented in the correspondence that I received, but then spoke to a "Peggy" person, who did not speak English as a first language and told me that that I did not need to do anything that the dispue had been resolved.  I had plenty of evidence that we did not get the service we paid for, but I never presented such evidence in writing because I was told I did not need to.  Unfortunately, the person who was telling me what to do or not to do, was wrong or did not understand my questions (because of the language difficulties) and the end result was that Capital One counted my failure to respond, in writing, as agreement to the company's position (which again consisted of presenting a copy of the contract and a copy of the credit card slip signed by me).  Going forward, I will always respond in writing.

Vacation Season

I have posted before about our vacation budgeting/planning system. I have used this system now since 2007 and it continues to work well for us. We just returned from a long weekend trip and the known costs, the rental cottage and the fishing trip, were prepaid prior to the trip.  The remainder of the trip expenses were budgeted, as previously explained, I normally budget $100 day for each of us and we save that up in our ING travel/vacation account.  However, this trip was more of a nature/relaxing trip and we didn't come close to spending that much each day.  My annual girls trip, over Memorial Day weekend, is coming up so I'll put the money we didn't spend back into our ING account and I have just a few weeks to get ready for the next trip.

A January Spending Fast

After balancing our checking accounts last week, I was shocked at how much money we spent in December.  Between holiday, charitable, party and vacation/travel spending during December we blew through quite a chunk of change.  The vast majority of that spending was thoughtfully planned and also saved for, in advance, in our holiday and travel/vacation ING savings accounts.   But some of our December 2011 spending was just spending . . .

I don't do well with temptations and if I'm out buying gifts at Target for the Angel family we sponsored for the holidays I might just pick up an item or two for myself (which happened).  Or if I am at a charitable function with the  "ladies who lunch"  I might just find myself caught up in their spending cascade (which happened).

As a result, I have decided that I am on a 30 day spending fast starting today January 9, 2012.  What that means for me is that I will avoid the malls, the shops, the catalogs (they will go directly into the recycling bin), the emails from my favorite retailers touting their post holiday sales (delete, delete, delete), I will refrain from downloading E-books, iTunes, iPhone apps, etc.

To the extent I think of something that I need or want in the next 30 days I will write it down and revisit it in a month.  I will calendar the two rebate coupons that I'm carrying around ($15 at J. Crew and $125 at Pottery Barn) so I will not worry about forgetting them but also will not use them in the next 30 days so as not to be tempted into spending above and beyond the rebate amount.

Please consider joining me in my 30 day spending fast.  If 30 days feels too long, consider a weekend or a work-week spending fast to jump start your habits in the new year.

All Spending is Local

Talk about an expenditure cascade, I'm living across the bridge (we call it a moat) from the richest zipcode in the nation.

Travel/Vacay

I'm heading out of town for a long weekend trip with one of my girlfriends.  I have to post to say how much fun it is to plan a quick trip and to have travel and fun money in our ING accounts just sitting there waiting for me to spend it.

Travel is so much more fun when the trip is already paid for and I have "fun" money available for shopping, spa and eating out.

Always a Bridesmaid

We are off to a wedding this weekend, one of Mr. Sam's good friends.  In honor of wedding season, see this interesting article from CNN on the high cost of being a bridesmaid.  According to CNN it costs, on average, $1695 to be a bridesmaid.  Ouch!  I'm going to call up my bridesmaids and thank them.  Luckily, I was in two of their weddings, so I think that cancels it out.  But I have two single bridesmaids and I feel like I owe them some money.

We're spending $400 for flight, $200 for hotel, $150 for Mr. Sam's rental tux (and he owns a tux, but this is for the wedding) and related costs,  $1500 for his attendance at bachelor party in Las Vegas, $200 gift and $400 in daily spending money on the trip (we are going for 4 days).  Total - $2850.

Vacation Planning

We just returned from a short vacation, 5 days out of state, and we have three trips coming up.  For the past few years we have followed the same sort of financial plan for our vacations.

First, we always have a travel savings account at ING and we always have an auto transfer funding that account.  Most times the auto transfer is $50 every two weeks (if no travel is planned) and if we have travel planned we up the amount.  As a result, we generally have enough in our travel account to pay for the flight. 

Second, once we know where we are going, we book the hotel.  Even though we don't normally use credit cards for day to day spending, we do use credit cards for booking travel. We use credit cards both because we don't like travel holds on our debit cards and because we get travel insurance with our credit card.  Normally we can book the hotel without paying for it upfront and then we up our auto transfer to the travel fund to account for the hotel/accomodations costs.  I love to stay in nice hotels, but I still search for the best rate on those nice hotels. 

Third, once I've got the hotel booked and rental car (if applicable), I plan out our "budget" for the trip.  And budget does not mean I limit our spending, but rather I just plan out how much we are going to spend.  I normally budget $100 a day for each of us when we travel.  Yes, that is a lot of money.  But, when I factor in eating out, entertainment, museums, shopping, tipping, cabs or rental car, admissions, etc., this is normally what we spend when we travel.  Then I up our auto transfer to our ING travel savings account and by the time we depart on our trip I have the full "budget" saved up. 

Fourth, at the time of travel, I transfer the travel funds from our ING travel savings account to my checking account.  I actually like to use cash when we travel if there is a safe in the room.  I prefer just taking $100 cash for each of us at the start of the day, spending what we spend and then accounting for it at the end of the day.  But if it doesn't seem safe, we use my debit card since I transfer the travel savings to my checking account.

Fifth, after travel, normally I might have the hotel bill or rental car bill on my credit card.  But, we've already got the money set aside to pay the credit card bill and we promptly pay it off.  Often times, when we return there is no bill awaiting us.