9:00 AM & 10:30 AM
9:00 AM & 10:30 AM
4:00 PM & 5:30 PM
6:00 AM, 7:30 AM, 9:00 AM, 10:30 AM & 12:00 PM
(This article was originally published by Grant on the Stewardship blog here.)A vacation is great for so many reasons. It’s a break from typical daily life that can sometimes wear on you. On vacation, you get to take time away from the daily commute, cleaning the house, business meetings, stressful decision-making, and so much more. But what about a break from your finances? You know, the reconciliation of expenses, tracking how much money is coming in and how much money is going out, daily discipline with spending–when do you get a break from that?Along with time away from daily tasks, I also take a break from my finances on vacation. It needs to be done with intention and pre-planning before the vacation. Many of us have been on those vacations that follow us home in a bad way. The credit card bill is racked up higher than anticipated and now you have to hit the rat race even harder to pay that sucker off. We don’t want that. Instead, we want to be wise, protect our finances, but take a break from the daily management of them while on vacation. Here’s how I do it:
Part of my monthly financial routine includes setting aside money for expenses or things that are a priority. I tithe, give money away, save, and allocate various amounts to other expenses that I know will happen in the future. One of these areas of allocation is the “vacation fund”. Each month my wife and I put a set amount of money aside in this fund. This is not only going toward paying for travel, hotels, and other reservations we may want on the vacation, but the fund is also for spending money and daily expenses while on vacation.
Confession: I overspend on vacation. And I am not alone. So many people get into a laze fair mindset when on vacation. So much so that they take a vacation from good financial behaviors and spend more than they should. This leaves you coming home in a worse financial situation than you left. It ensures your vacation stays with you, negatively, longer than you wanted.My wife sets aside a specific amount of money in a “vacation” account. Then, when we go on vacation, we can spend from that account (or grab cash from that account) without having to consider other daily financial liabilities. This practice allows us to take a vacation from our financial behaviors (cause that is fun!) and protects us from over spending while on our trip. The only behavior we need to manage while on vacation is discipline to ONLY spend from that one account. Simple!Before you leave, do a little research and some math. Set a high estimate for the maximum amount of money you think you would need for day-to-day spending while on vacation. This is different from the amount you already set aside for lodging, rentals, and/or airfare. This is only an estimate for daily spending for things like food, desserts, coffee shops, tips, parking, admission to events or parks, shopping, and more. Once you know a worst-case scenario number, make sure you have at least that amount left in the vacation fund. This will give you peace of mind going into the next step.PRO TIP – Estimate high–really high. Again, one of our goals for this process is to take a break from the daily discipline you have in your expenditures. Estimating high or adding a “limited discipline” buffer to your numbers is good here.
I know, I am a finance expert that appreciates some of what Dave Ramsey teaches. I have even taught Financial Peace University at my church for many years. And he teaches that credit cards are evil. But I don’t agree with that. I don’t think credit cards are for everyone, but they work well for me. And I do not think anyone will get rich off of credit card points, but there is a reality with credit card rewards: one out of every three people have credit card travel rewards that go unused. So, before booking your vacation, login to your credit card rewards online system or call in to your credit card company to see if you have any rewards. If you do, see if you can use any of them for the upcoming trip. I rarely get an entire vacation paid for with credit card points, but I often get a flight or a hotel stay paid for through points. It is a nice money saving bonus!
I rarely use cash. With things like Venmo, Apple Pay, and other electronic payment methods being added to the often used credit card and debit cards, it makes me wonder if cash will still be around in the future.However, I use cash most when I travel for two reasons:
I engage with service staff often when I travel. From waiters, waitresses, bellmen, cleaning crews, and more–I am being served by awesome people. These folks depend on tips as part of their income. The number one way they like to get their tips? Cash! And the easiest way for me to show them I appreciate their work is to hand them cash–as long as I have it in my pocket.Sometimes I forget to go to the ATM to get the cash needed and it makes my travel a lot less convenient and causes me some fear.
The number one way bank account information gets stolen or compromised is through travel. As a general rule, I NEVER use my debit card or other check account information when I travel. If I cannot use cash, I use a credit card. This way if my information does get stolen, it’s to my credit information and not to my real money. I would much rather someone hack into my credit card than into my checking or savings account. This way if the funds are stolen, I can dispute it. If my real money is taken from my checking account, it would cause a major disruption to my life. Using cash as often as possible when you travel reduces the risk involved.
Because you did the work ahead of time, you can spend the money in your vacation fund without tracking, reconciling, or being extremely disciplined. You finally get a break from the mundane, tiresome chore of managing your finances daily. Yes, you can continue your vacation with peace of mind because you did the work needed before your vacation started. This is one of my favorite things about time away. As a finance expert who owns various financial services companies, I have a natural bend to be disciplined and detailed with finances. That proclivity has served me well! But, that doesn’t mean it is always easy or fun. I enjoy my break when I take vacations, and it’s something that helps me continue financial management more effectively when the vacation ends.
Husband, Dad, and Sun Valley Community Church student ministry volunteer. A Finance Expert and Founder of Stewardship. Christian Ministries major from Arizona Christian University and bestselling author.