Travel More & Buy Less. | Luis Vargas | TEDxPortland
How to Vacation for (a Lot!) Less
"We saved up some money for a big vacation to Orlando, FL. We're staying in a condo—how else can we keep our costs down?" —Bob and Tammy Richey, Hudson, OH
DAVE: Vacations are awesome, and if you're out of debt, it's perfectly reasonable to put a vacation line on your budget. Set a financial goal and divide it by the number of months you have to save, then sock away that amount each month. That's how our grandparents did it, and it's still the best way. Question: Did you save upenoughmoney for your vacation? Because rule #1 is that you cannot use debt to finance your trip—and that includes credit cards! I talk to too many families who get excited about a trip and charge themselves into oblivion for a few days of fun. The problem is, that kind of vacation sticks around for months or years in the form of credit card bills. Use common sense and ask yourself,Can I really afford this?If you can't, then you need to reset your expectations.
RACHEL: No matter how much you've saved up, you can make memories without spending thousands. Some things to consider:
What is the true cost? You can plan for airfare and hotel, but miscellaneous expenses will get you. Spend some time thinking about every possible expense you could have on this vacation— transportation to and from theme parks, souvenirs, snacks while you're out—and make sure you're fully prepared to pay for all of it! You've already made a good choice by staying in a condo. You'll save by cooking most meals there and being selective about eating out. Now do some research: Look online at the restaurants nearby and see what the average cost of a meal would be. That will help you budget. Do the same thing with attractions. A little digging will go a long way toward determining what the true cost will be.
Help the kids set budgets, too.Your teens are old enough to understand that a vacation doesn't mean you stop being smart with money. Give your kids a heads-up about when you're going so they can begin saving their earnings for extras. And set some rules: Maybe you'll pay for one souvenir each, but the rest is up to them, or they have a certain amount for snacks at theme parks, and once they've blown through it, that's it. Believe me, they won't starve to death if they need to wait until dinner.
Is there somewhere closer?Orlando may be a dream trip, but if you can't pay cash, you'll need to look a little closer to home. Cutting plane tickets will help. Is there a beach nearby? A mountain resort you can drive to? A lake cabin?
DAVE:Hopefully you've saved enough for Florida, but if not, it's OK if you decide it's out of reach right now. A lot of families have gotten turned around on what a vacation really is. I talked to a struggling single mom the other day who works two jobs to keep her kids fed and clothed, but she felt guilty about not being able to take them away! WHAT? Listen, I love roller coasters, but choosing food and clothes (and staying out of debt) over cotton candy is definitely not child abuse! The whole point of a vacation is to relax and spend time with your family. You don't have to travel far to make that happen.
Dave Ramseyand his daughterRachel Cruzeare coauthors of the bestselling bookSmart Money Smart Kids.
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