So You Want to Take a Vacation

Most of us enjoy a change. We work hard during the year and look forward to taking a vacation. Some of the typical questions that come up when making the final vacation decision are:

  • How much time do I have?
  • How much do I have to spend?
  • Do I need to finance the vacation or will I pay cash?
  • Who will be going?
  • Where are we going?
  • Will we fly, drive or take public transit?
  • What other goals do I have that require funding?

Recognize that taking a vacation is part of personal financial planning. It is one of many goals that families have that require an allocation of resources. Certainly, vacations provide near-term satisfaction that enhance quality of life. Spending money on vacation creates an opportunity cost. Is the vacation worth more to you than other opportunities?

Taking the family on a week's vacation can cost thousands of dollars (even if you are traveling in the U.S.). Airlines, hotels, food, car rental, admission fees and so on are not cheap today. Would it make sense to go away for only one or two days rather than a more extensive period (it's amazing how much better one feels by staying away for only one or two evenings)? A shorter vacation also enables you to spend less money and leaves you more resources to put toward a new car, real estate, savings and investments, educational costs and so on. This can especially feel good if you don't have to pay off vacation loans over the next year.

Everyone deserves a vacation, just make sure it is affordable.