Incorporating Travel into Our Budget

Has anyone else been feeling depressed this winter? Or is it just me?  

I’ve been struggling hard with this shitty Toronto slush and the grey. Time for some sunshine, a beach, and hopefully a few monkeys and toucans. We’re coming for you Costa Rica.

What We Like To Spend Our Money On

Travel is a big-ticket item that my wife (Jacq) and I enjoy spending money on. It brings us a lot of happiness, gives us some time to reconnect, and is something that we plan ahead for every year. There’s often 1 trip between January-March to get us that vitamin D, an RV trip somewhere in the summertime for 2-5 weeks, and then maybe a small trip in October/November before the holidays hit. But we always plan ahead for these and incorporate them into our spending plan.

I’m currently writing this post from Costa Rica. We spent 3 nights in the jungle at this super cool Airbnb, and the other 3 nights at the 5 star Sumba Lodge.

When we travel, we travel hard.

I bid on an upgrade with AirTransat which was accepted for an extra $230 (total) for Jacq and I on the flight down, and an extra $250 on the way back. Having the extra legroom, nicer meals, and the service is definitely something that I love. Plus we really indulged on those Valentine's day mimosas on the way home!

We typically don’t have a strict budget when we travel but instead incorporate around $20,000/year into our spending plan. We don’t let our finances hold us back from experiencing the things that we want to. This is called values-based spending.

This is a concept where you spend your hard-earned income on things that you value, after you’ve taken care of your necessities of course! For me that’s travel, dining out, and Wynnona (our RV).

I don’t feel bad spending money on these things because they bring me so much happiness and fulfilment, and so it’s something that’s budgeted every year when I’m planning out where my income is going. I do this same kind of spending plan with my coaching clients when we’re reviewing their personal finances.

It takes a bit of time to work through everything and really understand your income and expenses, but when you do, it alleviates so many unknowns, stressors, and the financial anxiety.

I do a financial audit every year and organize our income to focus on our necessities and priorities first. For us, this is home expenses, George expenses, investment contributions, debt repayments, cell phone and internet, grocery, transportation costs, and insurance premiums. These are our necessities, and I make sure that these are covered before I start spending money on anything else. Once I know those are covered, I spend care-free without worry.

It's also so nice knowing that when we come back from our trips that we have savings and/or investment income to cover any excess.

So, we never worry about money when we travel, and I gotta tell you – it’s an amazing feeling to just enjoy the trip without having to worry about running out of money.

What NOT To Do When You Travel.

I remember back in 2015 (God I sound old!) when I was backpacking in Southeast Asia that 90% of the people that I ran into were dead broke and were either working to travel or were living off credit card debt to support their expenses. Clearly, they hadn’t been taught about financial literacy, which I found to be so worrying.

They had no idea how much of a financial burden that living off credit card debt could have on their finances.

I ran into one girl who had booked her flight to Thailand on her credit card and mentioned that she’d just continue to make the minimum payment each month. In my mind I’m thinking that you’ll actually NEVER pay this trip off if you do that….

On a $2,000 flight to Thailand where she paid only $50/month minimum, it would cost her an EXTRA $1,321.59 in interest, and that’s just if she didn’t put anything else on her credit card.

I wonder if she’s still struggling to pay it off? 

Anywhoodles, we're back in Toronto now. It's nice being back snuggling George. He wished he was on the beach with us.

Need Help Getting Your Financial Shit Together?

If you've got some travel plans of your own that you need help saving for, or just need some help getting your financial shit together, please reach out for a free assessment call. I'm here to help you build wealth, achieve your financial goals, and educate you on all things finance.

Kick ass an conquer 🚀,  

Alanna