Guest Contributor
Lionel Shipman is the owner of Shipman Consulting, a personal and business finance-consulting firm specializing in helping individuals and businesses improve their financial outlooks. The primary focus of the firm is facilitating seminars and classes to educate, motivate, and empower people to take charge of their financial lives. The firm also offers one-on-one consulting services.
Please visit the firm’s website for information at WWW.ShipmanConsulting.Com.
Email address: Contact@ShipmanConsulting.Com ; Twitter: @LShipmanSC
Know Your Money
Tuesday – July 15, 2014
Vacations On A Budget……
By Guest Contributor
Mr. Lionel Shipman
I believe vacations and time away from work and the hustle and bustle of life are very important. Everyone needs a break, mentally and physically. However, everyone is not taking a break. According to the CBS Moneywatch website dated April 4, 2014, employees of America used half of their eligible vacation time during the past 12 months according to a Glassdoor survey. The primary reasons were fear of getting behind in work and the concern that no one else could do their job function. In many countries such as France and Greece, companies are required to pay employees who take time off for vacation. However, in United States, there is no requirement and many people do not even take the time that they are entitled to or have accrued. Why are Americans not taking vacations? My guess is some cannot afford to take the time off due to the demands of their job or position; whereas, others simply cannot afford to take a vacation. Then, there are some Americans who will utilize their vacation or personal time off but will not really take advantage of it, because while on vacation they are checking and responding to emails or receiving and returning phone calls.
The purpose of vacation is to remove oneself, for a specified period of time, from the routine of work life and other potential stresses of life. Whether you work in an office setting, construction site or otherwise, every working person deserves and needs a vacation. Take a break from the demands of work and rest your minds and bodies. Whether you are resting in a hammock in your backyard or a beach chair in Maui, utilize your vacation time.
Taking a vacation does not have to be extravagant and expensive. Today, many people are taking a “staycation”. A staycation is a vacation at home or close to home where the vacation budget is smaller than a normal vacation. The most important aspect of taking a vacation or staycation is budgeting for it. As with other household budgets, establishing a vacation budget is vital.
Here is a simple plan: (1) Make a realistic list of vacation spots. For many people, vacationing in the south of France or equi-trekking in Ireland is not realistic, based upon the amount of their incomes. Therefore, be realistic where you would like to spend a vacation based on what you and/or your family can afford. I have a list of places that I would like to go but I cannot realistically go at this time or this year. Some of the places require more time beyond the standard 7 days of vacation and require more money than any past vacation. (2) Determine how long you want to stay. Vacation time can vary depending upon the amount of time you have and how much you can afford. For some people, 2-3 days may be the limit. Regardless of the vacation time you have accrued or have been allotted, take the time to relax your mind and body. (3) Determine the costs of the vacation. This step is the most important one. The costs of going on a traditional vacation may include travel costs (airfares, rental car expenses, gas costs if traveling in your own vehicle, etc.), accommodations, food, admission prices to parks and/or entertainment venues and miscellaneous places.
Once you have compiled the costs, you must determine if the costs are within your financial means. Then, establish a budget and start allocating money towards the vacation. I do not recommend financing a vacation using a credit card especially if there is a rolling balance. If you are not paying the balance off the month the charges are due, you should not use a credit card.
Unfortunately, a number of people have been and will continue utilizing a credit card to pay for their vacations. Some of these people fail to realize that well after the vacation they are still paying for it because of the accrued interest. For example, let’s say you charged a $2,000.00 vacation on a credit card and decided to make monthly payments as opposed to paying the balance off at the end of the billing cycle. Depending on how soon you pay off the balance, your overall vacation cost will exceed your budgeted amount. Can you imagine still paying for a vacation that was taken 3 – 6 months ago? I cannot and I encourage you to feel the same way.
If you do not have the money, your vacation destinations will be limited but not all are out of reach. You may not be able to afford your ideal vacation this year or next year but it is still obtainable. If you prepare a budget and set aside the funds over a specified period of time, your vacation can become a reality. If the particular vacation is still not within reach, then plan a more affordable vacation. Remember, you can always take a staycation. Typically, it is less expensive and you can still relax your mind and body.
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