How to Plan a Family Vacation without Hurting Your Retirement
Family vacations are probably one of the largest impulse purchases you can make.
Vacations can cost more than expected, especially if you have a large family or an exotic destination in mind. Several of my clients love to treat their entire extended families to a variety of family trips.
Some of my best memories are vacationing with my family. I’m sure yours are too. That’s why I advocate for every family to set aside time and money to vacation together. But the key is planning.
Big price tag purchases can change your tax bracket, hurt your investment strategy, or even postpone your retirement date.
If you want to plan for an elaborate family trip without wrecking your retirement plan, here are a few tips to get you started.
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Start planning & saving early.
I recommend estimating the total cost of the trip, and then add a 10% cushion. This should cover possible inflation or unexpected costs.
Next, start a savings schedule. Open a separate account and contribute to it every month. Little by little you’ll reach your goal and be able to track your progress.
Planning early can also provide opportunities for early booking specials and discounts when reserved a year or more in advance.
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Set expectations and communicated them.
Another, equally important aspect of logistical planning is setting expectations with those who are going.
If you are going to pay for the trip, it’s even more important to communicate your expectations. Who is going? How will you deal with boy/girlfriends? What activities or meals should the group participate in? Will there be a family photo with coordinating outfits?
It’s also important to be clear about costs. There are both “upfront” costs such as flights and hotels, but also “on the ground” costs like meals and excursions.
These might seem like small details, but I promise you, that if you’ve saved for months for a trip, you will have expectations (spoken or unspoken) about what the trip will be like. To avoid any hurt feels or frustrations, sit down with everyone who’s going and figure out what this vacation should look like.
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Set yourself up for success.
Vacation is all about making memories and spending time with those we love and cherish most.
But don’t let it hurt your retirement. Start planning and saving early, set proper expectations, and check with your trusted Financial Advisor to make sure your retirement is still on track.
With these few simple tips, your next family vacation can be both fun and financially feasible!