One part of what I do is to assess the cash flow of our clients, balancing their inflows (money in) to their outflows (money out). Never entering into judgment, guild or blame (try that for a day!). We review the expenses of our clients to assess if the cash flow is sufficient to support their lifestyle.
Since I am a great believer in living life to the fullest, responsibly of course, I encourage our clients to take vacations regularly to cleanse their mind of the everyday rat race and to take that sorely needed rest and relaxation excursion.
Escaping from the everyday routine is very important to mental health. Yet, you would be amazed at the conversations I have with folks who have not been away in years.
It seems there is always something in the way: children (oh drat…you remember them) excessive workloads, things to do around the house- fill in the blank. The key here is the lack of time away from reality to cleanse the soul and rejuvenate the mind. A machine can only run non-stop for so long- when was the last time you put yourself in the "off" position?
Most people view budgeting as a self imposed hardship that limits that amount of money that can be spend on fund things because the nuts and bolts of reality come first. Paying the rent or mortgage, utility bill, phone and all the monthly goblins always come first.
If you are fortunate to work for a company who offers a 401(k) plan, or some kind of retirement plan that deducts your contribution before you see it, it allows you to save in a way that seems less painless-they take it from you before you see it.
There is an old saying amongst those who are savers: "pay yourself first." What if your vacation fund was similar to your retirement fund- when you get paid, slice a small amount off and put into a savings account destined to send you on vacation to rest your mind and body?
If you determine the approximate cost of the vacation a year beforehand, divide it into the amount of paychecks you will have in the year previous to the trip, you can save on a paycheck by paycheck basis and go on the trip without any feelings of borrowing or raising your debt ceiling to spend that time on the beach.
Be sure to include spending money, gifts and mai-tai's into the calculation, and be diligent. There's nothing like coming back from a well-enjoyed vacation knowing you don't owe a dime as a result of a good time.
Don't borrow to go away. If you use your credit card, you will be paying a high rate of interest for the advance during the time it will take to pay it off. If you borrow from your home equity, you will also be paying extra in interest whilst you pay it off. A reasonably priced trip with interest may turn out to be the most expensive weekend getaway you ever encountered if you finance it.
Preparing for your vacation involves planning on how to pay for it as well, so be prudent, do your homework, and prepare... and then have a blow out time!