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VOL. 128 | NO. 71 | Thursday, April 11, 2013

Dana and Ray Brandon

Take Time to Budget Your Vacation

By Ray and Dana Brandon

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Ray’s Take It’s that time when people start looking forward to summer vacations. Unfortunately, all too often, the aftermath of those vacations turns out to be more than just wonderful memories – a blown budget and burdensome debt.

This year, develop a vacation budget now to help avoid the impulsive spending that comes with thinking, “It’s OK – I’m on vacation.”

Every vacation breaks down into three major cost areas: transportation, lodging and activities. Think about what type of vacation you want – beach time, foreign exploration, family visits, etc. – and determine which area is going to take the most of your budget and how you can reduce expenses in other areas. Different people value each part differently. There’s no “right” or “wrong” amounts to spend, unless they add up to more than you can afford.

For example, you can save in New York City by seeing museums instead of musicals. Or, instead of a fancy beach resort, search online for apartment rentals. They are sometimes less expensive than hotel rooms, and give you extra living space plus a kitchen. You can usually substantially reduce meal expenses by opting for local restaurants than eating at a hotel, and enjoy a more authentic dining experience.

However, often the biggest budget buster in a vacation is not the cost of getting there or lodging – that’s typically determined by you in advance. The problem is the “Why not?” factor once you arrive. Fancier meals, extra beverages and loads of souvenirs – all these purchases add up quickly. We hold the line on this through all-inclusive resorts like Club Med or group trips with Road Scholar. The up-front price tag looks a bit daunting, but it usually works out better than “a la carte.” Others find setting a daily budget and sticking to it helps – when the day’s money is spent, that’s it. Either approach can keep things from spiraling out of control.

Dana’s Take Family vacations are such a big-ticket budget item that family harmony is important to maximizing return on investment. For every moment of sulking on a trip, Mom and Dad see dollars flying out the window. Improve buy-in before the trip by including kids in planning the itinerary.

Ask kids to research activities in your chosen city. Trip Advisor, Cruise Critic (even if you’re not cruising), Virtual Tourist and Fodor’s are a good start.

Allow each child to propose activities, including cost estimates. When you work out the itinerary, balance kid-chosen outings with parent choices. Insert plenty of downtime—good family time is more about quality than quantity.

Once on the trip, the kids will look forward to their portions of the trip and hopefully be more patient with Mom and Dad’s plans. Including the kids in planning will pump up the value for your holiday, resulting in a more enjoyable and less stressful experience for everyone.

Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker. Contact Ray Brandon at raybrandon@brandonplanning.com.

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