Weekly Financial Tip – Saturday August 19, 2017

Providing you the best tips and practices for reducing your cash disbursements.

So you are planning a vacation getaway!

Fun, Fun, Fun !!

Financially, what would I do first?

Depending on the duration of the vacation and the distance traveled, let’s consider the following:

  1. Let’s assume it is in the USA and it’s for 5 days of duration. Therefore, if we can afford it without saving ahead of time, then I would move to step 2.
  2. I would start with “how much, more or less, cash I have available in my bank account.
  3. If my bank account balance is at least 3 to 4 months of personal living expenses AND I have current steady cash coming in every month, then I go ahead and take the 5 days getaway without any hesitation.
  4. Budget? No way!! The moment I prepare a budget for this trip, I am automatically limiting my enthusiasm, my joy and the fun I want to experience. (I know! This is contrary to what many financial advisors would recommend.  Budgets are great for other purposes) The idea of taking this vacation is that if I can afford it, then why impose limitations in my vacation experience?
  5. Because I have the funds available for this trip, I would use my credit card, because I will be able to pay it within a month and possibly earn rewards points.
  6. I would be responsible on the spending on dinners, entertainment, etc. We should have an idea, a range in dollars amount, how much we can play with during this 5 days trip.

If I don’t have the funds available for this trip, it means I will end up using credit cards and this is exactly how I can get into a high credit card debt balance through time = TROUBLE.

So, if my next trip is Paris for 14 days, for example. I would revisit all of the steps above, and if necessary, save the funds months ahead of time, rather than paying for the vacation borrowing with credit card charges that add interest over interest to the unpaid balance.

Last but not least; enjoy the 5 days getaway trip! YOLO!!

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