How do you justify family vacation costs?

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
spammagnet
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Re: How do you justify family vacation costs?

Post by spammagnet »

TomatoTomahto wrote: Sun May 23, 2021 11:50 am
tryingtogetahead wrote: Sun May 23, 2021 11:48 am
TomatoTomahto wrote: Sun May 23, 2021 11:45 am
livesoft wrote: Sun May 23, 2021 11:43 am One thing I do is simply look at the daily value fluctuations of our portfolio. A typical vacation like you described is well below that, so it is something I don't worry about.

Another thing, put everything on a cash back credit card to reduce the price by 2%.

And a third thing, consider better places that cost less or have better value.
Are you proposing a variant of “Lifesoft’s Rule” for how much vacation one can afford? Please?
What is lifesoft rule?
You can afford a car that costs as much as your portfolio gains or loses in a day. For some reason, I can afford a Bentley based on losses but not gains. :beer
That's a bit extreme. Using that as a qualification, most people couldn't afford one car payment, much less a car.
Flyer24
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Re: How do you justify family vacation costs?

Post by Flyer24 »

I have deleted several off-topic posts questioning the seriousness of the post. Please be considerate and respectful. Members should feel comfortable to post at any income level.
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tryingtogetahead
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Re: How do you justify family vacation costs?

Post by tryingtogetahead »

JPM wrote: Sun May 23, 2021 4:54 pm For people raised in working class or even more modest environments, adjusting to the usual upper middle or upper class norms and customs can be difficult or impossible. Due to professional education, business acumen, sports prowess, or dumb luck some people raised in modest circumstances find themselves possessed of extraordinarily valuable human capital in early and mid adulthood and able to easily afford luxuries undreamt of in their raisings. Of course some (many?) take very readily to living luxuriously but not all. Some look at expensive cars and vacations as something to be avoided, as they were not sought by anyone they knew growing up. This difficulty tends to be overcome with time, but not always. Some guys worth 8 figures drive old beaters and park them in garages behind modest homes because it's comfortable in a way that an expensive car and luxury home would not be. Suum cuique.
You kinda hit the nail on the head. First of all, I know that most of my problem is psychological and not financial (although I experienced 2008 and 2020 crises so I know nothing is promised, most of all a job). These numbers just shock me. I cannot believe how much things cost. Most of the people around me, including family and childhood friends, earn less than me (or at least I think so) so it seems crazy to spend this kind of money. Secondly, as other posters pointed out, I probably have a problem that I am seeking permission or validation for spending my own money. I guess I just want to make good decisions. The BH community is definitely great and I have learned a lot on here. Upgrading cars recently was also a hard decision. I didn’t dump the $200/month lease until I hit 4.5mm and had baby on the way. I definitely have a scarcity mindset. I’m working on it bc I know life is short and I want to live with as few regrets as possible.
mikejuss
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Re: How do you justify family vacation costs?

Post by mikejuss »

tryingtogetahead wrote: Sun May 23, 2021 9:47 pmYou kinda hit the nail on the head. First of all, I know that most of my problem is psychological and not financial (although I experienced 2008 and 2020 crises so I know nothing is promised, most of all a job). These numbers just shock me. I cannot believe how much things cost. Most of the people around me, including family and childhood friends, earn less than me (or at least I think so) so it seems crazy to spend this kind of money. Secondly, as other posters pointed out, I probably have a problem that I am seeking permission or validation for spending my own money. I guess I just want to make good decisions. The BH community is definitely great and I have learned a lot on here. Upgrading cars recently was also a hard decision. I didn’t dump the $200/month lease until I hit 4.5mm and had baby on the way. I definitely have a scarcity mindset. I’m working on it bc I know life is short and I want to live with as few regrets as possible.
Is there a reason that you want to start a family tradition of going to Nantucket in particular? Maybe you simply don't feel comfortable with the prices of things there. Don't sweat it; find somewhere else to take your family each year where the pricing is less worrisome.
Last edited by mikejuss on Sun May 23, 2021 9:55 pm, edited 2 times in total.
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tryingtogetahead
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Re: How do you justify family vacation costs?

Post by tryingtogetahead »

I think many of us in this community, myself included, read Financial Samurai, Mr Money Mustache, Choose FI, and countless other FIRE blogs throughout our careers to try to save and get ahead so I guess it’s hard to know when to turn that off. I still don’t know the magic number. I guess that’s the bigger question. I guess it’s gradual bc you don’t wake up one day and say “now I can forget everything I did the last X years to get here and do things differently. Certainly, if I did that at 2mm, I wouldn’t be where I am today. Maybe that’s not a bad thing either.
Hallman
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Re: How do you justify family vacation costs?

Post by Hallman »

I don't consider $10k to be that much for a family vacation (that's about what we spend), so justifying it is easy. We don't come close to your assets and income, and would probably spend more in your shoes.
MathWizard
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Re: How do you justify family vacation costs?

Post by MathWizard »

If you are asking the question, you should ask yourself why you think the question is necessary. You must have some doubts.

You can certainly afford it, unless you are spending prodigiously in other areas of your life.

Is it that you are worried that you will be normalizing extravagance for your child?
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Bogle7
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justify family vacation costs?

Post by Bogle7 »

We don’t. We just do.
Old fart who does three index stock funds, baby.
Wannaretireearly
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Re: How do you justify family vacation costs?

Post by Wannaretireearly »

Nice job with your net worth OP. We are slightly older, but with less net worth/income than you.

1. Vacations: we have sometimes spent 40/50k a year for 4 to 6 weeks away. Always tried to get away when possible. Great posts here that explain the benefits/memories. We've paid upwards of $4/500 a night only a few times. Much prefer $300 or less. Points/free nights even better! At your income level I would feel ok spending $800 a night.

2. Wine. I've had a limit of $20 to $25 a bottle. Generally great wines for that price. I feel like I could now go up to $30/bottle, if justified 😀. A friend came over and brought a couple of bottles last night. Looked at them today and they are each over $200 a bottle! Scared to open them, will save for a very special occasion!!

3. Whiskey. I'm more liberal with my budget lol. Anything up to $50- $70.

Take care & enjoy your vacation. That should be your main focus.
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
Starfish
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Re: How do you justify family vacation costs?

Post by Starfish »

tryingtogetahead wrote: Sun May 23, 2021 11:34 am DW and I are expecting our first baby this summer. We are late 30s, HHI mid to high 700s including bonuses and equity. NW mid 4mms. We love Nantucket and want to start a family tradition of going there for a week or more every summer. Our dilemma is hotels are min $800/night and houses are even more. With food and travel, this means $10,000/week all in just for a quasi-local beach vacation. How do you justify this? What metrics do you use to determine appropriate costs for a vacation? We would appreciate any feedback.
To me even harder to justify than the expense (which is relative) is the vacation time used to go to a quasi-local destination. I have about 20-30 days of vacation a year (it's "unlimited", but about 25 is what I can take) and 1 week would be a large percentage (for my wife is worse as the vacation comes out directly from her pocket). If I could get there in under 5-6h, I would go only in weekends, maybe add a vacation day here and there to make it longer.
Regarding strictly the expense question, I would never pay this kind of money - or even half - to go anywhere in continental US, forget about north east. There are much better vacation places in the world where you can spend a week for about half, including plane tickets.
For example at about the same age as you with 1 y old but way les NW and income we went to a nice all inclusive resort in Mexico (I hate AI but easy with small kids and they love it), to Germany (mostly Frankfurt and Heidelberg) and Eastern Europe. In this case for me there is no reason to justify anything as traveling is a basic need for us.
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TomatoTomahto
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Re: How do you justify family vacation costs?

Post by TomatoTomahto »

spammagnet wrote: Sun May 23, 2021 9:36 pm
TomatoTomahto wrote: Sun May 23, 2021 11:50 am
tryingtogetahead wrote: Sun May 23, 2021 11:48 am What is lifesoft rule?
You can afford a car that costs as much as your portfolio gains or loses in a day. For some reason, I can afford a Bentley based on losses but not gains. :beer
That's a bit extreme. Using that as a qualification, most people couldn't afford one car payment, much less a car.
I think it’s a bit tongue in cheek, pointing out the silliness of many rules. “The market really tanked today; I guess I can afford a Bentley now.” Or, with the brokerage heuristic about how many times annual salary you should have saved for retirement: “we were doing well, but my wife got a salary increase, so now we can’t retire.”
I get the FI part but not the RE part of FIRE.
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racy
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Re: How do you justify family vacation costs?

Post by racy »

OP,
I was in my 30s yesterday (it seems), now 68. We took annual family ski trips in the winter and then someplace in the summer. The concern wasn't "is it justifiable", but rather the realization that "life is short".
jharkin
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Re: How do you justify family vacation costs?

Post by jharkin »

If you make 700k and cant justify 10k... barely one weeks pay... for a vacation each year I'm not sure what to tell you. That is a personal issue that's beyond forum rules to discuss.


I'm a decade older, we make 1/3 of what you do and spend nearly that much every year- -usually spread over 2-3 trips but some years we do one big expensive one (think Disney, national parks tour, etc) ... We can EASILY afford it and I get a lot of grief from my wife for being a miser about travel.
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hand
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Re: How do you justify family vacation costs?

Post by hand »

tryingtogetahead wrote: Sun May 23, 2021 9:47 pm
JPM wrote: Sun May 23, 2021 4:54 pm For people raised in working class or even more modest environments, adjusting to the usual upper middle or upper class norms and customs can be difficult or impossible. Due to professional education, business acumen, sports prowess, or dumb luck some people raised in modest circumstances find themselves possessed of extraordinarily valuable human capital in early and mid adulthood and able to easily afford luxuries undreamt of in their raisings. Of course some (many?) take very readily to living luxuriously but not all. Some look at expensive cars and vacations as something to be avoided, as they were not sought by anyone they knew growing up. This difficulty tends to be overcome with time, but not always. Some guys worth 8 figures drive old beaters and park them in garages behind modest homes because it's comfortable in a way that an expensive car and luxury home would not be. Suum cuique.
You kinda hit the nail on the head. First of all, I know that most of my problem is psychological and not financial (although I experienced 2008 and 2020 crises so I know nothing is promised, most of all a job). These numbers just shock me. I cannot believe how much things cost. Most of the people around me, including family and childhood friends, earn less than me (or at least I think so) so it seems crazy to spend this kind of money. Secondly, as other posters pointed out, I probably have a problem that I am seeking permission or validation for spending my own money. I guess I just want to make good decisions. The BH community is definitely great and I have learned a lot on here. Upgrading cars recently was also a hard decision. I didn’t dump the $200/month lease until I hit 4.5mm and had baby on the way. I definitely have a scarcity mindset. I’m working on it bc I know life is short and I want to live with as few regrets as possible.
There is no justification for vacation / family spending, and on an absolute basis, prices for things that many people of affluence (or with access to credit) routinely pay for are absurd.

The rational path forward is to 1) ensure your financial responsibilities (career, housing, retirement, college) are on trajectory to be safely met, 2) determine what's left over, 3) decide what consumption is worthwhile - in the context of what is left over.

That being said - take the vacation.
an_asker
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Re: How do you justify family vacation costs?

Post by an_asker »

jharkin wrote: Mon May 24, 2021 6:55 am If you make 700k and cant justify 10k... barely one weeks pay... for a vacation each year I'm not sure what to tell you. That is a personal issue that's beyond forum rules to discuss.


I'm a decade older, we make 1/3 of what you do and spend nearly that much every year- -usually spread over 2-3 trips but some years we do one big expensive one (think Disney, national parks tour, etc) ... We can EASILY afford it and I get a lot of grief from my wife for being a miser about travel.
And I'm probably a decade older than you and make 1/2 of what you do... but are you sure either of us matter in the OP's grand scheme of things? He has already gotten ahead of us.

OP, the answer to your question depends on your net worth progression and that of the next person you are trying to get ahead of.

As one of the other posters here would say ... Got data??
T4REngineer
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Re: How do you justify family vacation costs?

Post by T4REngineer »

tryingtogetahead wrote: Sun May 23, 2021 9:52 pm I think many of us in this community, myself included, read Financial Samurai, Mr Money Mustache, Choose FI, and countless other FIRE blogs throughout our careers to try to save and get ahead so I guess it’s hard to know when to turn that off. I still don’t know the magic number. I guess that’s the bigger question. I guess it’s gradual bc you don’t wake up one day and say “now I can forget everything I did the last X years to get here and do things differently. Certainly, if I did that at 2mm, I wouldn’t be where I am today. Maybe that’s not a bad thing either.
I will say its gradual but can also happen relatively fast - Over the past couple years I have worked very hard at becoming content and realizing what a dream life we live. This is on a Portfolio 1/4 of yours and income of <1/3 and only a few years younger. Mostly because we have our health and see so many around us with either chronic issues or no energy/time to take an after dinner walk as a family - if you can not enjoy the day to day any "Dream" vacation is just a band aid to larger problems.

We will be spending in the 7.5-10k range for a trip to the Vegas area and surrounding national parks - this amount of money is not required for us to enjoy the trip but we are choosing to do so because we can and that money is going to buy experiences that are outside of our normal lives (flying first class, nice hotel room/AirBNB, exotic cars around the Vegas Speedway, Ford Raptor rental etc - to some those things means nothing but WE will enjoy them so its worth spending OUR money on. I hope you are able to find what balance works for you

Money is not enough by itself - some may have true happiness with millions but its generally what those millions bring that helps enable happiness. It does not require millions to be happy and as a first time father the past few years I can assure you your perspective is going to change drastically. Wait till your little ones says "thanks for taking care of me dad" or " we are eating as a family" or "snuggle with me forever and ever" or holding the lug nuts as you change a tire - your cares, your worries just melt away and you realize the only things that truly matter are things that money can not buy.

Enjoy your family vacation and the upcoming ride that is parenting! With that in mind I do think its worth some personal reflection as your level of concern signals other issues to me and I mean that in the most respectful way possible with zero qualifications to say so. Congratulations on your financial successes.
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Random Musings
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Re: How do you justify family vacation costs?

Post by Random Musings »

Based on income level, this is a non event. I make far, far less and spend far more on a percentage basis.

Saying that, you may want to consider mixing up your travel plans - some people find comfort in the same ol', same ol' (it's also far easier to plan), but there are so many great places to visit (including beaches). Analogous to crop rotation, perhaps have a rotating beach schedule as a family tradition?

You only get to see the world once.....

RM
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Re: How do you justify family vacation costs?

Post by KlangFool »

tryingtogetahead wrote: Sun May 23, 2021 9:52 pm I think many of us in this community, myself included, read Financial Samurai, Mr Money Mustache, Choose FI, and countless other FIRE blogs throughout our careers to try to save and get ahead so I guess it’s hard to know when to turn that off. I still don’t know the magic number. I guess that’s the bigger question. I guess it’s gradual bc you don’t wake up one day and say “now I can forget everything I did the last X years to get here and do things differently. Certainly, if I did that at 2mm, I wouldn’t be where I am today. Maybe that’s not a bad thing either.
tryingtogetahead,

I am not sure that is your problem. With half of your asset in real estate and your 2 million real estate return is only 20+K per year, are you sure that you are making money? You have about 1 million in mortgage. On your portfolio side, you have a bunch of high flying individual stocks.

Perhaps, subconsciously, your intuition is telling you that you are not as financially secure as you believe.

Something tells you to ask this question. What is that? Are most of your income/savings ended up servicing the mortgage and real estate investment?

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Grt2bOutdoors
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Re: How do you justify family vacation costs?

Post by Grt2bOutdoors »

tryingtogetahead wrote: Sun May 23, 2021 12:37 pm
I-Know-Nothing wrote: Sun May 23, 2021 12:12 pm I am very frugal, but I can’t imagine feeling like I needed to justify a $10k vacation at a place I loved with a HHI like you have. I would probably feel like I needed to justify the $70k car though, so I guess we all prioritize the things that matter to us.
The car was also a hard decision for which I crowdsourced opinions on BH. DW was driving a 20k Honda for several years (leased for 200/month). We just got the 70k SUV a few days ago for the baby. Lease is 800/month. Economy SUVs were a few hundred bucks less per month but we justified the luxury SUV bc we got a great deal for what we got and we plan to take more trips with baby. It was still, however, a hard decision.
How secure is your employment? My suggestion is to lighten up a bit, life is short and some of the best experiences in your life will be with your immediate family. You are in the top 1% or very close to it, what more do you need? A 5 percent decline in the markets will cost you months of pricey vacations, so what? Go on that vacation and focus on the big rocks in your life. Hint: that investment account? Is not a big rock.

Big rock - spouse, kid (experiences with them) roof over head, health, food on table, family. Everything else - cars, trinkets, won’t mean much without the above. You have more now than most accumulate in a lifetime- take a breather and go on that vacation to Nantucket. You have no excuse not to.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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cheese_breath
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Re: How do you justify family vacation costs?

Post by cheese_breath »

I always funded vacations from discretionary income after all necessary expenses were met. Then it was just based on emotion. Did it want it more than the other stuff I might want?
The surest way to know the future is when it becomes the past.
jumppilot
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Re: How do you justify family vacation costs?

Post by jumppilot »

tryingtogetahead wrote: Sun May 23, 2021 11:34 am We are late 30s, HHI mid to high 700s including bonuses and equity. NW mid 4mm

….. With food and travel, this means $10,000/week all in just for a quasi-local beach vacation. How do you justify this? What metrics do you use to determine appropriate costs for a vacation? We would appreciate any feedback.
:oops:

With those numbers I’d be flying private to that beach house. Seriously.

I mean this with all sincerity, without knowing your total financial picture, of course - you are wealthy. Enjoy your life, especially when it comes to kids.
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quantAndHold
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Re: How do you justify family vacation costs?

Post by quantAndHold »

As far as justification, you’re making more money in a year than most people make in a decade, and at a young age, your net worth is already in the 99th percentile. What’s the point of making and having all that money? I mean, you can certainly live like a monk and give everything away, there’s absolutely nothing wrong with that. And you definitely need to think about what kind of values you want to teach the kids. But with that kind of money, $10k for a week’s vacation once a year is not extravagant, isn’t a stretch, and won’t cause you to delay retirement or anything like that. It seems like an enjoyable way to spend time with family.
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HomerJ
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Re: How do you justify family vacation costs?

Post by HomerJ »

tryingtogetahead wrote: Sun May 23, 2021 9:47 pm You kinda hit the nail on the head. First of all, I know that most of my problem is psychological and not financial (although I experienced 2008 and 2020 crises so I know nothing is promised, most of all a job). These numbers just shock me. I cannot believe how much things cost. Most of the people around me, including family and childhood friends, earn less than me (or at least I think so) so it seems crazy to spend this kind of money. Secondly, as other posters pointed out, I probably have a problem that I am seeking permission or validation for spending my own money. I guess I just want to make good decisions. The BH community is definitely great and I have learned a lot on here. Upgrading cars recently was also a hard decision. I didn’t dump the $200/month lease until I hit 4.5mm and had baby on the way. I definitely have a scarcity mindset. I’m working on it bc I know life is short and I want to live with as few regrets as possible.
Well, you should always look at cost.

I can afford to spend $20 on a Coke, but I'm not going to, because that's stupid.

You can find some very nice vacation spots that cost a LOT less than $800/night.

There's no reason to throw your money away.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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Re: How do you justify family vacation costs?

Post by Wellfleet »

tryingtogetahead wrote: Sun May 23, 2021 11:34 am DW and I are expecting our first baby this summer. We are late 30s, HHI mid to high 700s including bonuses and equity. NW mid 4mms. We love Nantucket and want to start a family tradition of going there for a week or more every summer. Our dilemma is hotels are min $800/night and houses are even more. With food and travel, this means $10,000/week all in just for a quasi-local beach vacation. How do you justify this? What metrics do you use to determine appropriate costs for a vacation? We would appreciate any feedback.
On principle, I try to get a good deal on any purchase, within reason, whether a bag of flour, car or vacation. If you've shopped a couple hotels/houses, other destinations like Martha's Vineyard and Cape Cod and this is the cost that it is, then my frugal nature allows for the purchase.

That said, you are making a last minute purchase this year, similar to trying to get Game 7 seven tickets to the NBA finals, if you will.

It might be the busiest year ever on Cape Cod and the Islands given the limits on international travel. I hear vacation rentals were booked up months ago, hotels can't find staff because of housing costs and foreign student worker limits this year. All raising costs.
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Re: How do you justify family vacation costs?

Post by tonyclifton »

tryingtogetahead wrote: Sun May 23, 2021 11:34 am With food and travel, this means $10,000/week all in just for a quasi-local beach vacation. How do you justify this? What metrics do you use to determine appropriate costs for a vacation? We would appreciate any feedback.
Our household income is much less than what you listed and we spend around this amount for our family vacation each year for the last 5 years. These are more of a family reunion type event where we pick a destination that can hold 25+ people and the kids pay for the parents. Up to the point of leaving for the vacation I am always thinking that it is super expensive and then the two weeks after it is over I am already planning the budget to save for next year. If there was a metric, how about the "Regret Scale"?

You could roll the dice, go and then later decide if you would ever want to do it again.
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Re: How do you justify family vacation costs?

Post by jcricket73 »

tryingtogetahead wrote: Sun May 23, 2021 11:34 am DW and I are expecting our first baby this summer. We are late 30s, HHI mid to high 700s including bonuses and equity. NW mid 4mms. We love Nantucket and want to start a family tradition of going there for a week or more every summer. Our dilemma is hotels are min $800/night and houses are even more. With food and travel, this means $10,000/week all in just for a quasi-local beach vacation. How do you justify this? What metrics do you use to determine appropriate costs for a vacation? We would appreciate any feedback.
At your income level (we're about 50-75% more than this) I'd encourage you to stop thinking of "is this appropriate" and start thinking of "will I derive enough enjoyment from this that I won't be distracted by the cost" - I actually regret being so cost focused when our kids were the tiniest. Sure, they wouldn't remember any of the vacations, but DW and I skipped a few family trips thinking they'd be a hassle/cost money (think $2k, not $10k) and I look back and how much we've enjoyed our travels w/family since then, and feel dumb. Not tragic, but that's 3-4 "memories" we won't ever get back.

For me I only try to justify spending on "items" - like "can I justify a $25-50k Patek Phillipe?" (something I have long coveted). The answer from affordability (meaning does it interfere w/any long-term goals) is yes, but I keep coming back to a "will I really get that much enjoyment from it" or "considering what else I could buy with that money, is this watch/jewelry justified?" set of questions, so the answer is no.

We discretionary spend freely on travel - because we enjoy it! If you don't, then don't spend the money. I can say over the last almost 20 years, we (me, DW, 2 kids now teenager and pre-teen) have almost never regretted the money spent on vacations, no matter the cost. The vacations are definitely more luxurious now than they were 10-15 years ago when we were making 1/10th the current income. We have however learned what we like more (beach/snow, rental home, etc) and less (cruises, lots of museums, small hotel rooms) so we are willing to spend more on the kinds of vacations we'll enjoy, and limit our spending when we "have to" travel for a family obligation and it requires elements of the latter. We'll still stay in a cheap hotel if we're just driving somewhere and staying overnight, or the prices seem "insane" and we have to be in a city (say New York).

Speaking of justifications, this past summer we decided to buy a smallish waterfront vacation condo - we're using it a ton (esp bc remote work allows for it) and it's under 2 hours from us (no ferries, planes, border crossings, etc). Kids are loving it, plenty to do nearby the place, etc. With Covid "winding down" we can bring friends/family up with us.

Like you, I'd like to believe it'll be a family tradition for the next 10-15 years, and it might be the kind of place we can retire to, but who knows. From a "can we justify it?" monetarily perspective? I mean certainly this will return less than putting the same amount of $ in the stock market, but by that metric no spending is justified except the barest of existences (food/shelter). Not how we plan to live the remainder of our days (nor how we've lived them until now). It's a hot enough area (between two major west coast cities) that we'll certainly get our money back, so that's part of how I justified it, but it's not a money maker.

As someone with kids who are now closer to leaving than I'd like to think about remember that as people say "the days are long, but the years are short"
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Re: How do you justify family vacation costs?

Post by an_asker »

Random Musings wrote: Mon May 24, 2021 8:51 am Based on income level, this is a non event. I make far, far less and spend far more on a percentage basis.
[...]
RM
But but but ... you're not "tryingtogetahead" are you? ;-)
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TomatoTomahto
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Re: How do you justify family vacation costs?

Post by TomatoTomahto »

jumppilot wrote: Mon May 24, 2021 9:04 am
tryingtogetahead wrote: Sun May 23, 2021 11:34 am We are late 30s, HHI mid to high 700s including bonuses and equity. NW mid 4mm
:oops:

With those numbers I’d be flying private to that beach house. Seriously.
With your username, I imagine you know how much flying private costs. I haven’t priced “local” flights, but I know that my wife and I don’t even book business class for longer flights, much less private. We are working on our frugality in this regard.
I get the FI part but not the RE part of FIRE.
jumppilot
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Re: How do you justify family vacation costs?

Post by jumppilot »

TomatoTomahto wrote: Mon May 24, 2021 11:15 am
jumppilot wrote: Mon May 24, 2021 9:04 am
tryingtogetahead wrote: Sun May 23, 2021 11:34 am We are late 30s, HHI mid to high 700s including bonuses and equity. NW mid 4mm
:oops:

With those numbers I’d be flying private to that beach house. Seriously.
With your username, I imagine you know how much flying private costs. I haven’t priced “local” flights, but I know that my wife and I don’t even book business class for longer flights, much less private. We are working on our frugality in this regard.
Depends on the route and type of aircraft you want. It’s not cheap at all, but it is affordable with the OP’s income and assets.

As you get older, flying first class is actually better for your health. More comfortable seats, easier to get up and stretch etc.
Nowizard
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Re: How do you justify family vacation costs?

Post by Nowizard »

Basically, your financial choices are to go, not go and make other vacation arrangements, as you already know. There are other aspects of vacations, however, that represent recharging for yourself and experiences for the family. There are choices to make regarding returns for investments. One of our best choices was to annually schedule vacations that were often significant in cost, more significant in return, as our adult children would affirm. There can be, of course, other family traditions that will be remembered by all.

Tim
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Petrocelli
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Re: How do you justify family vacation costs?

Post by Petrocelli »

tryingtogetahead wrote: Sun May 23, 2021 11:34 am DW and I are expecting our first baby this summer. We are late 30s, HHI mid to high 700s including bonuses and equity. NW mid 4mms. We love Nantucket and want to start a family tradition of going there for a week or more every summer. Our dilemma is hotels are min $800/night and houses are even more. With food and travel, this means $10,000/week all in just for a quasi-local beach vacation. How do you justify this? What metrics do you use to determine appropriate costs for a vacation? We would appreciate any feedback.
My general rule of thumb when my wife and I go on vacation is that I budget $1,000 a day for travel, food and lodging. So $10,000 for a week in Nantucket (which is pricey to start) sounds about right.
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Re: How do you justify family vacation costs?

Post by Nebraska_Drought »

High end vacations are not cheap, regardless of where you go. Have you priced a Disney trip to Orlando lately?

The intangible return of investment from a vacation is the quality time with family and the memories being made. My family of 4 did a dozen trips to WDW in Orlando over the course of my kids growing up. Usually 7-9 nights, staying on property, meals in parks, shopping and special excursions along with 10 day park tickets. With that being said, usually went every other year or 3 times in 5 years and saved up for these trips to make them special. It was magical and the memories we have with our kids was priceless. If you wanted to start a similar tradition for you family, go for it. You will be surprised how quickly kids grow up or how busy life can get as they get involved with more activities. The last trip we took was 3 years ago, told the kids we were going to Washington DC for a week to see the sites and instead, we got on a flight to Orlando and did another surprise trip. Kids were 13 and 16 at the time and we still talk about this trip and how we miss going to WDW. Can't wait to do this again with grandkids some days. All in all, trips would usually run from $7-$9,000 depending on where we stayed, flights, food, etc, but we know that the trips we took could have easily added a bunch more to our portfolio, but the memories and experiences were priceless. Money is nothing if you cant enjoy it.
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Re: How do you justify family vacation costs?

Post by H-Town »

tryingtogetahead wrote: Sun May 23, 2021 9:47 pm
JPM wrote: Sun May 23, 2021 4:54 pm For people raised in working class or even more modest environments, adjusting to the usual upper middle or upper class norms and customs can be difficult or impossible. Due to professional education, business acumen, sports prowess, or dumb luck some people raised in modest circumstances find themselves possessed of extraordinarily valuable human capital in early and mid adulthood and able to easily afford luxuries undreamt of in their raisings. Of course some (many?) take very readily to living luxuriously but not all. Some look at expensive cars and vacations as something to be avoided, as they were not sought by anyone they knew growing up. This difficulty tends to be overcome with time, but not always. Some guys worth 8 figures drive old beaters and park them in garages behind modest homes because it's comfortable in a way that an expensive car and luxury home would not be. Suum cuique.
You kinda hit the nail on the head. First of all, I know that most of my problem is psychological and not financial (although I experienced 2008 and 2020 crises so I know nothing is promised, most of all a job). These numbers just shock me. I cannot believe how much things cost. Most of the people around me, including family and childhood friends, earn less than me (or at least I think so) so it seems crazy to spend this kind of money. Secondly, as other posters pointed out, I probably have a problem that I am seeking permission or validation for spending my own money. I guess I just want to make good decisions. The BH community is definitely great and I have learned a lot on here. Upgrading cars recently was also a hard decision. I didn’t dump the $200/month lease until I hit 4.5mm and had baby on the way. I definitely have a scarcity mindset. I’m working on it bc I know life is short and I want to live with as few regrets as possible.
Our HHI is half as yours and our net worth is closing to 3.5 mil. We still don't spend 70k on a SUV or 10k on a week vacation. Don't get me wrong, we spend 20k on average on traveling, but we take many vacation trips during the year. The most expensive hotel we spend money on is around $300. Spending lesser per night give us more time for extended vacation. We probably end up spending the same amount of money on traveling, but we probably have more vacation time than yours in that aspect.

There are so many things to do that won't cost you 10k per week. And I found out that the lesser money spent on a day basis, the easier it gets to justify traveling cost. In other words, if we spend $100/$150 per person per day for traveling, it's not difficult to justify the cost. But we are able to do more things and extend the trip.
Time is the ultimate currency.
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celia
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Re: How do you justify family vacation costs?

Post by celia »

As a parent of minors, you get to choose the vacations. Make good memories as that is what the kids will remember, not the daily routine.

I think a variety of vacations is best. I would find it boring to go to the same place every year when there is a whole world to discover. (Our pre-schooler once asked the babysitter when she was throwing out an old mattress if she was going to give it to the Smithsonian as they collect old things as he knew from a recent trip there.)

My favorite ad is a short film clip showing everything that went wrong on a camping trip-the tent caved in, a bear ate the food, mosquitoes were everywhere and the parents are fraught. But when they get home, the kids talk about how that was the best vacation ever! I don’t know what the ad was for, other than to spend time with your kids doing something different.

P.S. kids under 10 won’t care which beach you go to. They just want to go in the water and dig in the sand.
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marti038
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Re: How do you justify family vacation costs?

Post by marti038 »

My thoughts:

1) You can afford a $10k vacation and you have no need to justify it to anyone but yourself. Have fun. If you decide it wasn't worth it, you don't have to go again next year.

2) As a data point, DW and I spend about 2% - 5% of our annual income on vacations. We decide where we want to go, then decide how much to spend (not the other way around).At times this means we spend a lot more on some trips than others, but we've never come back from a vacation and thought, "that wasn't worth it."

3) A while back, we made a list with our kids of places we all want to go on vacation. It's about 30 or so destinations long and will take years to complete, but it has helped us prioritize and plan based on what ages we'll all be for different locations. For example, we're saving several international trips for when the kids are older and doing more national park type trips now while they're younger and we have more flexibility in what we do or don't do.

4) Finally, we find time to be a greater limitation than money and your income far exceeds ours. I wish I could take 2+ week vacations, but it's just not practical in my job right now. We generally travel for 7-10 days a couple of times a year, but would take longer trips if we could. We plan to go for months on end in retirement.
“Having, first, gained all you can, and, secondly saved all you can, then give all you can.” - John Wesley
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tryingtogetahead
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Re: How do you justify family vacation costs?

Post by tryingtogetahead »

KlangFool wrote: Mon May 24, 2021 8:55 am
tryingtogetahead wrote: Sun May 23, 2021 9:52 pm I think many of us in this community, myself included, read Financial Samurai, Mr Money Mustache, Choose FI, and countless other FIRE blogs throughout our careers to try to save and get ahead so I guess it’s hard to know when to turn that off. I still don’t know the magic number. I guess that’s the bigger question. I guess it’s gradual bc you don’t wake up one day and say “now I can forget everything I did the last X years to get here and do things differently. Certainly, if I did that at 2mm, I wouldn’t be where I am today. Maybe that’s not a bad thing either.
tryingtogetahead,

I am not sure that is your problem. With half of your asset in real estate and your 2 million real estate return is only 20+K per year, are you sure that you are making money? You have about 1 million in mortgage. On your portfolio side, you have a bunch of high flying individual stocks.

Perhaps, subconsciously, your intuition is telling you that you are not as financially secure as you believe.

Something tells you to ask this question. What is that? Are most of your income/savings ended up servicing the mortgage and real estate investment?

KlangFool
Just to clear this up, I moved around alot of things since my prior asset allocation post. NW is 4.5mm. Primary residence is worth 900k less 500k mortgage. Investment RE is worth 1.29mm less 792k mortgage. 1.5mm 401ks/IRAs. 2mm taxable brokerage accounts. The small balance is a blend of personal property like car and private loan to family less small student loan. In 2021, we will earn 780k total. 593k from my job, 160k from DW's job, 13.65k from RE (I know this is a 2.74% return on current values but it's 4% return based on what I paid for them plus this does not count mortgage paydown of $18,000 per year, which makes it over 9% return on my initial investment, none of which is currently taxed due to depreciation, etc.), and 13.5k in dividends from taxable accounts (because almost 30% of my investments don't pay a dividend, 70% or so is S&P 500, and a small piece is unvested RSUs that don't pay dividend either).
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Re: How do you justify family vacation costs?

Post by KlangFool »

tryingtogetahead wrote: Mon May 24, 2021 4:42 pm

Just to clear this up, I moved around alot of things since my prior asset allocation post. NW is 4.5mm. Primary residence is worth 900k less 500k mortgage. Investment RE is worth 1.29mm less 792k mortgage. 1.5mm 401ks/IRAs. 2mm taxable brokerage accounts. The small balance is a blend of personal property like car and private loan to family less small student loan. In 2021, we will earn 780k total. 593k from my job, 160k from DW's job, 13.65k from RE (I know this is a 2.74% return on current values but it's 4% return based on what I paid for them plus this does not count mortgage paydown of $18,000 per year, which makes it over 9% return on my initial investment, none of which is currently taxed due to depreciation, etc.), and 13.5k in dividends from taxable accounts (because almost 30% of my investments don't pay a dividend, 70% or so is S&P 500, and a small piece is unvested RSUs that don't pay dividend either).
tryingtogetahead,

IMHO, you have a collection of investments. You do not have a strategy. You are spending a lot of time and effort on investment that does not matter to you.

How much is your PITI on your primary residence and investment RE?

KlangFool
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Re: How do you justify family vacation costs?

Post by Workaholic »

Family time is something very precious to my wife and I and we have no qualms about spending money to enjoy it the way we want to. Our kids are young and this is time you never get back. I can't think of a better way to enjoy the fruits of our labor than to makes memories/experiences with our kids. $10K is not much to spend on a family vacation nowadays- heck try doing a week at Disney World for under that!

We're heading to Hawaii for two weeks with the kids this December and I have budgeted for $20K. Hopefully it's closer to $15K but I'm not making any bets.

Life is too short- enjoy it with the ones you love.
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tryingtogetahead
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Re: How do you justify family vacation costs?

Post by tryingtogetahead »

KlangFool wrote: Mon May 24, 2021 4:50 pm
tryingtogetahead wrote: Mon May 24, 2021 4:42 pm

Just to clear this up, I moved around alot of things since my prior asset allocation post. NW is 4.5mm. Primary residence is worth 900k less 500k mortgage. Investment RE is worth 1.29mm less 792k mortgage. 1.5mm 401ks/IRAs. 2mm taxable brokerage accounts. The small balance is a blend of personal property like car and private loan to family less small student loan. In 2021, we will earn 780k total. 593k from my job, 160k from DW's job, 13.65k from RE (I know this is a 2.74% return on current values but it's 4% return based on what I paid for them plus this does not count mortgage paydown of $18,000 per year, which makes it over 9% return on my initial investment, none of which is currently taxed due to depreciation, etc.), and 13.5k in dividends from taxable accounts (because almost 30% of my investments don't pay a dividend, 70% or so is S&P 500, and a small piece is unvested RSUs that don't pay dividend either).
tryingtogetahead,

IMHO, you have a collection of investments. You do not have a strategy. You are spending a lot of time and effort on investment that does not matter to you.

How much is your PITI on your primary residence and investment RE?

KlangFool
3443/month on a 800k rental renting for 3600/month that I paid 770k for but bought for appreciation 2.375% mortgage at 510k
1985/month on a 455k rental renting for 2700/month that I paid 330k for and rent to long term tenant I know 2.5% mortgage at 280k
2943/month on a 900k personal residence that I paid 590k and mortgage of 500k at 2.375%

The rentals take very little effort. The returns are not stellar but the mortgage rates are very low and rents are paying them down.

What is your suggestion based on your comment?
Da5id
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Re: How do you justify family vacation costs?

Post by Da5id »

tryingtogetahead wrote: Mon May 24, 2021 5:25 pm
KlangFool wrote: Mon May 24, 2021 4:50 pm
tryingtogetahead wrote: Mon May 24, 2021 4:42 pm

Just to clear this up, I moved around alot of things since my prior asset allocation post. NW is 4.5mm. Primary residence is worth 900k less 500k mortgage. Investment RE is worth 1.29mm less 792k mortgage. 1.5mm 401ks/IRAs. 2mm taxable brokerage accounts. The small balance is a blend of personal property like car and private loan to family less small student loan. In 2021, we will earn 780k total. 593k from my job, 160k from DW's job, 13.65k from RE (I know this is a 2.74% return on current values but it's 4% return based on what I paid for them plus this does not count mortgage paydown of $18,000 per year, which makes it over 9% return on my initial investment, none of which is currently taxed due to depreciation, etc.), and 13.5k in dividends from taxable accounts (because almost 30% of my investments don't pay a dividend, 70% or so is S&P 500, and a small piece is unvested RSUs that don't pay dividend either).
tryingtogetahead,

IMHO, you have a collection of investments. You do not have a strategy. You are spending a lot of time and effort on investment that does not matter to you.

How much is your PITI on your primary residence and investment RE?

KlangFool
3443/month on a 800k rental renting for 3600/month that I paid 770k for but bought for appreciation 2.375% mortgage at 510k
1985/month on a 455k rental renting for 2700/month that I paid 330k for and rent to long term tenant I know 2.5% mortgage at 280k
2943/month on a 900k personal residence that I paid 590k and mortgage of 500k at 2.375%

The rentals take very little effort. The returns are not stellar but the mortgage rates are very low and rents are paying them down.

What is your suggestion based on your comment?
I'm a bit confused too, your holdings seem reasonable enough to me as well (though relation to your vacation plans is tangential at best).
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JoeRetire
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Re: How do you justify family vacation costs?

Post by JoeRetire »

tryingtogetahead wrote: Sun May 23, 2021 11:34 amHow do you justify this?
That only people who require justification are you and your wife.
Decide if that's what you want to do with your money, and stop worrying.
This isn't just my wallet. It's an organizer, a memory and an old friend.
UpperNwGuy
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Re: How do you justify family vacation costs?

Post by UpperNwGuy »

I don't understand the concept of "justifying" the cost of a vacation. If you have the money, spend it. If you don't, don't.
welldone
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Re: How do you justify family vacation costs?

Post by welldone »

We started saving for vacations almost 15 years ago. We wanted to take a really nice 10 year anniversary trip but I am definitely the frugal one in our marriage, and I decided it would help me psychologically to save up the entire vacation amount so that there would be no bills after we got home.

We saved up around $15k specifically for that trip, and had a wonderful 10 day trip. No regrets, no buyers remorse. Amazing location/accommodations, incredible meals, fun activities...and no stress about whether we were 'optimizing' our resources because it was all already paid for.

Ever since then, we have continued to save money in the vacation fund for both family trips and 'just the two of us' trips. We've taken trips to China, to Europe, to Disney, all over the US....and we figure out how much of the vacation fund we want to use in order to figure out how frugal or lavish each trip will be. Some years, when I think there is just too much money in that account, I redirect it to fund our IRAs for the year or other investing according to our Investment Plan.

I found having a vacation fund (separate from all our other money) helped me look at it as the play money it should be. It helped me decide to fly 1st class as a rule, as opposed to an exception...and currently the prices between 1st class and other cabin classes just isn't that big. It helped us to get out of the, 'I guess this will do" mindset and into the, "Let's make sure we have enough space and amenities to actually feel like this is a vacation, not an endurance test."

Perhaps planning for this expense will help you get into the vacation mindset as opposed to just taking it out of your general funds.
KlangFool
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Re: How do you justify family vacation costs?

Post by KlangFool »

tryingtogetahead wrote: Mon May 24, 2021 5:25 pm
3443/month on a 800k rental renting for 3600/month that I paid 770k for but bought for appreciation 2.375% mortgage at 510k
1985/month on a 455k rental renting for 2700/month that I paid 330k for and rent to long term tenant I know 2.5% mortgage at 280k
2943/month on a 900k personal residence that I paid 590k and mortgage of 500k at 2.375%

The rentals take very little effort. The returns are not stellar but the mortgage rates are very low and rents are paying them down.

What is your suggestion based on your comment?
tryingtogetahead,

<<3443/month on a 800k rental renting for 3600/month that I paid 770k for but bought for appreciation 2.375% mortgage at 510k>>

Why are you keeping this house instead of selling it? The cash flow is barely positive. And, given that opportunity cost of the home equity (290K), you are not making money.

<<1985/month on a 455k rental renting for 2700/month that I paid 330k for and rent to long term tenant I know 2.5% mortgage at 280k>>

It may make sense to keep this one. It is cash flow positive. But, you tied up 455k - 280K = 275K home equity in this house. You are only making 715 X 12 ~ 9K per year on this 275K. Is it worth the trouble and RISK?

<<The rentals take very little effort. The returns are not stellar but the mortgage rates are very low and rents are paying them down. >>

Versus stock and bond that takes ZERO effort. If it is not doing much better than your passive index portfolio, why are you doing it?

That is MY POINT about not having a strategy.

A) What is your GOAL?

i) X millions in Y years.

B) What is the return rate and annual savings that let you achieve (A)?

C) If the passive index portfolio let you reach your goal, why would you do anything else? My 60/40 portfolio return on the average of 7% per year.

D) If you want to do real estate investment with more RISK and EFFORT, it should beat your passive index by a good significant margin. If not, why waste your time and effort? Why take the RISK?

e) At your annual saving, do you really do anything else besides passive index investing? How much of this tinkering really helps and matters to you? If it does not, why are you doing it? Start a hobby instead.

Think strategically. What is your GOAL? What lets you achieve your GOAL earlier and faster? Investing on real estate with a lowered return than passive index is not the answer. Someone else with REAL expertise may do a better job. But, you are not one of them.

KlangFool
Last edited by KlangFool on Mon May 24, 2021 6:36 pm, edited 1 time in total.
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BillWalters
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Re: How do you justify family vacation costs?

Post by BillWalters »

Can’t take it with you.

It may help to think about the reasonable chance be your have a taxable estate, in which case Uncle Sam is paying for almost half.
andypanda
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Re: How do you justify family vacation costs?

Post by andypanda »

"The OP can obviously afford it, but magical days don't require $800/night hotel rooms."

They do if you want to go to really popular - and nice - places. And if you want those housekeepers, front desk staff, cooks, dishwashers, lawn care workers, wait staff, bus persons, cab drivers and everybody else that has a summer job there to get paid and support themselves, somebody has to pay for those $800/night rooms.

Does anybody here camp in their own backyard because it's affordable? If not, why not? Think of the money you'd save instead of those Motel 6 vacations. :sharebeer

We're going to the Outer Banks in June for another week. And August for a week in a larger cottage with her son and grandsons, etc. And then again in September. But a small cottage in season with 3 or 4 bedrooms is only $750/night. It's cheaper for the 2-bedroom place we stay.

It's only money. I've spent weeks camping and driving around in a little car and we were so poor we couldn't afford air mattresses. That was nearly 50 years ago. I'm leaving those memories in the past along with the lumpy ground and flooded tents and wind storms.
flyfishers83
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Re: How do you justify family vacation costs?

Post by flyfishers83 »

One time or annual thing, no problem. However, to me, there are two questions:
1. Is this the start of recurring very expensive get aways? You can spend a lot of money if you start doing weekends through the summer plus a week here or there, plus a different week somewhere else with the same quality. Your 10k could easily become 50-100k.
2. Is this a vacation that you want to take, or are you really looking for something else? As a lot of people have mentioned, 10k is a fair bit of money, but not crazy. My wife and I probably spent that on a trip to Hawaii. However, that included rental of a house with kayaks and a secluded bay. The kayaking and snorkeling with the sea turtles was incredible. If you're really concerned about perceived value and not the cost of this vacation, whole different question.

One more piece of personal advice--don't plan a really "special" vacation with a baby. You can have a great time doing a lot of things, but you'll be working around your baby. Don't plan something where you'll feel like you're missing out because you have to plan around the baby.
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HomerJ
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Re: How do you justify family vacation costs?

Post by HomerJ »

Workaholic wrote: Mon May 24, 2021 5:14 pm Family time is something very precious to my wife and I and we have no qualms about spending money to enjoy it the way we want to. Our kids are young and this is time you never get back. I can't think of a better way to enjoy the fruits of our labor than to makes memories/experiences with our kids. $10K is not much to spend on a family vacation nowadays- heck try doing a week at Disney World for under that!

We're heading to Hawaii for two weeks with the kids this December and I have budgeted for $20K. Hopefully it's closer to $15K but I'm not making any bets.

Life is too short- enjoy it with the ones you love.
Heh, "Workaholic".. Get a lower-paying job that gives you more daily time with your kids and you won't have to spend so much on vacations to build up memories...

:)
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Marseille07
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Re: How do you justify family vacation costs?

Post by Marseille07 »

Personally I don't think this is justifiable. A one-time trip to Nantucket is obviously fine. But starting an annual tradition to go there every year?

Hypothetically, if they were retired on 4.5M NW doing 3%, it would provide 135K/year, or 11.2K/mo. This trip, happening annually, essentially blows up one month of withdrawals, leaving 11 months to live a year. If I were them, I would not be comfortable with this kind of budgeting.
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Random Musings
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Re: How do you justify family vacation costs?

Post by Random Musings »

To quote Judge Smails:

"Well, we're waiting."

RM
I figure the odds be fifty-fifty I just might have something to say. FZ
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