Personal Finance Payoff – the Vacation

July 1, 2009 by  
Filed under Spending

I am on vacation this week with Mrs. ToughMoneyLove and members of our nuclear and extended families.  That is why my postings this week are short and sporadic. I did want to take a minute to say something about vacations and how they relate to the world of personal finance.

To me, taking a vacation is part of the payoff for doing the right things with your money year-round. If you think about a vacation purely as a spending activity, it would be about as frivolous an expenditure as you can imagine. You are not working, making you unproductive.  You are typically paying for the privilege of staying and eating somewhere other than your home, thereby duplicating your shelter expenses. And, you are often engaging in expensive recreational activities for pure pleasure and amusement. In isolation, that doesn’t sound like responsible financial behavior.

But enjoying a vacation is responsible financial behavior, if done right.

Employers offer us vacation time off as a benefit to remain competitive, to allow us to recharge our batteries as employees, and to motivate us.

The motivation part can be sad if you are one of millions of employees who dislike their jobs and therefore work only for their weekends and vacations.

Others of us see vacations as opportunities for in-depth exploration of non-work interests.  Later in life, we may view a vacation as a prelude and testing ground for that time when we are financially independent and therefore free to do what we want and go where we want (within reason!). These aspects are the personal finance payoffs of a vacation.

I said above that taking a vacation is not irresponsible financial behavior if done right.  That means you have 100% planned for the cost. Too often we see vacation time as one of those “I deserve it” entitlement expenses that are to be incurred whether we can afford it or not. The credit cards come out and away we go. You may – according to your employer – be entitled to the time off.  But your personal balance sheet and financial behavior throughout the rest of the year determine if you are entitled to the full vacation payoff. If not, welcome to that new vocabulary word and world: the staycation.

And now, back to enjoying mine.


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