Vacation on a Budget

Gail Vaz-Oxlade, I'm gonna make you proud! I just love Gail on 'Til Debt Do Us Part.  Her no-nonsense approach not only makes great TV, it makes sense to me.  This show is one of only about three that I actually sit down and watch.  Usually the TV is on, keeping me company, while I'm doing other things.  This show is worth paying attention to.

One of the things I like best about Gail's approach is that she encourages balance; even if you have debt to pay off, or you are lacking in your emergency fund, Gail believes that you need to have some fun once in a while, so long as you budget for it ahead of time and don't go overboard with the spending.  I think that's important.  Nobody can thrive when all you do is work for a paycheck.

Anyway - Walker and I had planned to spend a week on Sanibel Island in the Gulf of Mexico last November.  Those plans had to be canceled so I could do my daily radiation treatments.  When we were ready to try for another trip, we could not find decent airfare to Fort Meyers, the closest airport to Sanibel.  We could have waited a bit to see if the airfare came down, but there was stuff coming up at work that would require my presence, and Walker really needed some time away sooner rather than later, so we decided instead to check alternate destinations.  Walker has some family snowbirds in Orlando, and while we could get there for a good price, the flights had not one but two stops along the way. This time of year, with unpredictable weather, that bothered me.  Who wants to get stuck in an airport half way to their destination due to snow and ice?  We ended up deciding on Tampa, and were thrilled to discover we could get frequent flier seats with one slight catch - we had to fly down a day earlier than we were planning to. Ah well, what can you do?  Our vacation went from a week to eight days, challenging the budget a bit more.

This is what we had originally budgeted:

Airfare        $700
Hotel          $600
Rental car & gas  $400
golf  (greens fees & club rental)   $300
Entertainment, meals & miscellaneous spending   $800

Total budgeted cost for seven days and nights was $2,800, which is just a bit less than we had saved in cash.   But this is the year of fiscal reform, at least at our house.  So here's what we actually spent:

Airfare  $212 plus 50,000 frequent flier miles. $92 of that was baggage fees.  The thing is, Walker paid to check his golf clubs.  He would have spent more renting them than bringing his own, so it was money well spent in my opinion.
Hotel  $748
Rental car & gas  $407
golf fees $122 
Entertainment, meals & miscellaneous spending $636 in cash, $108 on the credit card, and 400 Disney reward "dollars".  The credit card will be paid in full as soon as all the charges post.


The total came to $2,233, which is $567 less than we originally planned for, even though we stayed an extra day. That's just over 20%.  Wahoo! The thing that's worth mentioning is, we didn't scrimp.  We did not live on peanut butter bread and tap water as some of my friends did when vacationing during their college days.  We spent a full day at Disney World, Walker went golfing three times, we rented a mid-size SUV rather than a compact car, we ate good food in fun restaurants, and we brought shirts and treats home for the kids.  Could we have cut the budget further?  Sure. But I'm happy with the budget and the experience we had.  We found the balance.

And the Winner is....

Gail Vaz-Oxlade!  I chose Gail for my financial mentor because she seems to believe in balance.  Finding balance has become my personal mission, and honestly, I think Suze Orman is lacking in that area. Here's what I mean:

Suze Orman has a segment on her show called, "Can I Afford It?" where people call in, tell Suze they want to spend money on whatever, and Suze goes through their financial profile and approves or denies the request.  Some are a no-brainer, some need to be puzzled out.  Suze always explains why she approves or denies each request.  However. Once in a while a caller will be approved, but Suze will say, "I've approved you, but now I want to talk you out of doing this.  If you put this money away for retirement now, you will have XXX in fifty years.  Your whatever can wait."  One such caller was a woman who had finished graduate school with no student loans.  She had a job that was starting in four months, and she wanted to spend the interim traveling through Europe.  She had cash saved for the trip.  Suze approved the request, but tried to talk her out of going saying Europe would still be there in ten or twenty years. 

Well, of course Europe will still be there, but really, Suze, do you think this woman will have FOUR MONTHS away from work to just go wander?  I doubt it.  She also may be married or raising kids in ten or twenty years. She might have aging parents who need her help.  She might have a dog and a mortgage and a big pile of responsibility.  Right then, she had the time, she had the money, and she had the desire.  Suze still tried to talk her out of it.

Now, when Gail counsels a family, she doesn't try to talk them out of living their dreams. She does, however, teach them how to budget for them.  No matter how tight a family's budget is, Gail always has something set aside for entertainment.  Sometimes it's only ten bucks, but it's something. She recognizes the need to have some fun once in a while.

Gail had a couple who were planning to put their honeymoon on their already straining credit cards.  Gail didn't tell them not to go, she told them not to go without having the cash first.  She helped them budget the trip, she sent them to a travel show to learn how to find the best deals, and she helped them figure out that if they really wanted the honeymoon, they would have to work extra hours for six months prior to save the cash up.  That, to me, is the better way. 

Show Me the Money!

My attempts to become more fiscally stable have led me to research various financial gurus' budget plans.  I've studied Dave Ramsey's plan, I watch Suze Orman every week, and I've followed Gail Vaz-Oxlade for over a year now.  After considerable research, all I have is a headache.

The first thing I wanted to find out is simply, "How am I doing?" I have some savings, some retirement, some investments.  I have good equity in my home.  I don't have a car loan and my medical bills are paid.  On the other hand, I have a credit card balance and I don't have the recommended eight months' expenses saved in my emergency fund.  My car is over ten years old.  The next few months will bring more medical bills. My furnace is twenty years old.  I feel like I'm doing okay, but I really do not know, at this point in my life, if I'm on track for the future, for retirement, etc.  Even after my research, I'm still not sure.

No matter who's plan you look at, the basics are the same: live on cash, don't carry consumer debt, save for retirement and keep a liquid emergency fund.  Which leads me to my next question:  what, exactly, constitutes an emergency?  I know a job loss is one thing, but what about  something less drastic?  What if, say, my car breaks down?  Do I take the repair cost out of my emergency fund?    Or do I walk to work until I save enough money to get it fixed? Do I need a "big time" emergency fund and a "little crap that adds up" emergency fund?  If I ever accumulate the recommended eight months' expenses in my savings, I want to make sure I'm handling it correctly.

I think what I need to do is just pick a plan. One plan, and stick to it. I'm waffling between Suze and Gail right now (sorry Dave!) and, while their objectives are the same, I think they each have a unique approach.  While I try to puzzle it all out, I'm just going to keep doing what I've been doing.  I don't have an urgent need to change anything, other than my own desire to make sure I get and stay on track financially as quickly as possible.   Cancer is scary, but having cancer without adequate financial resources is terrifying.  I don't ever want to be in that position again.

Fiscal Fitness

My mom is a very frugal person. When we were kids, we'd travel about the country in our old station wagon during summer vacations. My mom had friends all over the place, so we usually had someplace to crash as we roamed about. When we didn't, it was pretty rare that we'd check into a motel. My mom was not afraid to pull off the road and sleep in the car parked at a rest stop or under a bridge. Unheard of now, but back then, it was not uncommon for us to hobo our way to Mt Rushmore or Disney World or British Columbia in this manner. We also grew up washing aluminum foil along with our dishes, so it could be reused, and carefully unwrapping Christmas gifts so we could reuse the paper. My mom still does those things, though she no longer needs to.

My dad had a more unique approach to money. He was unfailingly thrifty in some areas, like clipping coupons, and didn't blink at the high cost of other things, like his custom blended pipe tobacco at $40 a package. When my dad died, I found at least a dozen of those tobacco bags in his home. It looked like he would order more when it started drying out. I don't know how often he actually finished a bag of it. Yet even when he received a fresh bag, he didn't throw out the dry stuff. I never figured that one out.

I don't think I inherited my financial views from either of my parents. As with all areas of my life, I try to find a balance. In this case, the balance is between saving for tomorrow and enjoying life today. For inspiration, I like to watch Suze Orman on CNBC. A caller will ask Suze's permission to spend a wad of cash on something extravagant, like a new boat or a month in Europe. Suze goes over the caller's financial status and approves or denies the request. Sometimes, though, Suze will approve a request but then try to talk the caller out of actually making the purchase. She'll tell them that Europe will still be there in ten years, yada yada, and if you put that money in your retirement fund now, you can have XXX when you retire and won't that be great? Well, sure. But you know, my dad was only 66 when he died. He worked and saved for his retirement but never got to enjoy it. Walker's dad died in his fifties. So while I absolutely think saving for retirement is important, I also feel it's important to live some dreams out now, just in case.

With that in mind, Walker and I keep a separate savings account just for vacations.  I know some people, ahem, Suze, would tell us that we need an eight month emergency fund and all consumer debt paid off before we should even think about a vacation.  That's fine, I understand the point.  I just don't agree.  We toss our loose change in a jar, we set aside a portion of any bonuses or windfalls we get, and we forgo giving each other gifts on Christmas and birthdays and our anniversary.  At least once a year, we take a trip together.  It may not be the smartest financial plan, but like Suze always says, "People first, then money, then things."  And this year, these two people are going to Disney World.  Wahoo!