How to Plan for a Vacation

Today, we'll be discussing how to plan for a family vacation. Hello, welcome to Money Talks. My name is Ken Wink from Summit Financial Consulting here in Southeast Michigan. If you'd like more info about what you hear during our show today, give us a call 586-226-2100 or visit us online at summitfc.net. When you go to the website, be sure to check out the podcast page. We've got past shows. You can subscribe on Apple Podcasts, Spotify, or Amazon Music. So it is tax time, everybody. It's spring. Some people are excited because they're getting a tax refund. Other people aren't getting a refund, but it's still a great time to start planning some trips for this summer. So today we'll be discussing how to plan for a family vacation or any vacation financially. But before we jump in, got to introduce the two co-hosts today. First, Tony Shore. Tony, we've got an additional co-host today, Zach Bachner. He is our head certified financial planner in the office. So he helps all the other advisors in the office with their financial plans and just answering all the tough questions that we have regarding our own clients. But he's got a ton of his own clients as well. So let's welcome Zach Bachner.

All right. I'm excited. Zach, great to finally meet you on the show, at least. And Ken, you kind of did a disservice there. He's not a co-host. He's a guest on the show. He's a very special guest. And Ken, I have to hand it to you. A huge get to get Zach back here. the show. That's a huge get, and, um, yeah, he kind of is the head, uh, CFP over there, financial planner, and keeps you guys in check. So he's the, basically what you're saying, Ken, is that Zach here is the brains of the operation and you're just the eye candy, right? Is that, is that how this works? I like to think I play a little bit of both roles, but exactly. But we'll talk later, um. That's good. It's good you have that view of yourself, Zach. I appreciate you guys having me on here.

Tony, I've heard a lot about you from Ken as well. But like you said, yeah, I'm like the CFP of the office. I do a lot of the problem solving here, both for just all the clients of the office and then my own book of business as well.

Awesome. That's great. So you do meet with clients and you help the other advisors coordinate and plan. I know there's a lot to it. When you meet with somebody, you guys have helped so many people here in the community. And when you meet with somebody, there's a lot to it. You're looking at so many different aspects, running a lot of different reports, and everybody's goals and situation and timelines are different. So that's great. But Kenna, I also love our topic for today and the fact you brought Zach on, but the topic is great. Staying positive. Sometimes people tack, oh, it's tack season, but this is a great one. How to plan for a vacation. I should have had some of my sound drops ready from the movie Vacation. Oh, yeah. We can't play my favorite one on the air, though, where Chevy Chase Clark Griswold goes off in the car on the way to Wally World. He starts to freak out. We're two hours from the fun park. You want to turn around and go home? He starts swearing at the kids. Not so great. Great John Candy. Sorry, folks. Park's closed. The Moonsault Front should have told you. I love John Candy in that movie. So we're going to talk about how to plan for a vacation. Hopefully a little better plan than Clark Griswold and his family had, the Griswold family vacation. But, Zach, do you have a family of your own? Are you planning any family vacations this year? No.

Well, I do have a family. I'm married. We have almost a two-year-old daughter at home as well. We have done a decent amount of traveling, I think, in the past. Right now, we're just in the toddler phase, working on growing that family, so we're not really spending too much time traveling. We did a long weekend in Mexico a couple months ago. Besides that, everything else is kind of more low-key for the rest of the year.

Yeah. Okay. Well, Mexico is not too shabby. That's awesome. That's a great place to vacation. So we're talking about how to plan for a vacation. And I imagine mainly from the financial side, Zach, why don't you kick it off? Where do we begin here?

Yeah. So obviously vacations are very, you know, sometimes relaxing, sometimes more adventurous. My wife and I have had a lot of conversations that when we travel is either we're sitting somewhere and we're relaxing or we're, we're hiking, we're walking, we're seeing stuff, we're doing that adventuring. So there's different types of occasions, but the way that we plan for them all kind of come down to the same set of steps. And unfortunately that first step there starts with that, you know, that B word, it's going to be budget. Coming up with an idea of how much you can spend or how much you can afford to spend is really going to be where that first step comes in.

That's huge. Well, yeah, you have to have a budget. And I mean, and there's different levels. So your budget may dictate where you go to. Right. I mean, if you want to travel around the world, do a trip around the world or spend, you know, two weeks in Europe, that might be a different cost than, you know, going to visit a national park.

or headed to Colorado or something, right? So the way that we look at it is obviously we wanna make sure your retirement goals are being met, all your other savings and expenses are covered. Vacations are typically a little bit more discretionary. You don't always get the chance to take a vacation, but if you have the money set aside, you're not gonna be financially burdened. You come up with that budget of what you can responsibly spend. That can kind of help you decide what type of vacation you can go on. Cause like you said, Tony, you know, we did two weeks in Italy and that was a lot more expensive than going camping for a weekend. So what your budget is can definitely dictate the type of vacation or the type of travel that you can plan for.

I had a client meeting this last week and this client was really excited because she was starting to get stock options or RSUs. They're basically getting free stock from her employer as an additional benefit. And it's funny in every relationship, there's somebody who's the budgeter typically, and then there's somebody who's the fund planner or maybe doesn't get as wrapped up in the numbers. And the husband didn't skip a beat. He goes, so what you're saying is we could just cash these in and go on a big trip every single year? And it's like, well, let's look at retirement and see where we're at on retirement before we just spend this on a vacation every single year. And the wife immediately said, I don't want to see those retirement numbers. And she was the budgeter. So it's like, Zach, you mentioned it in passing, but that's a really big thing that we do around here is help people figure out actually at what age they can retire at. Yeah. Step one, make sure you're on track for retirement or if you want to help your kids with college or any big important goals that you have. We want to look at those first. And then, as Zach said, if there's discretionary money, then we start planning these, especially bigger vacations.

Yeah. So there's times that like, like you said, Ken, these bigger vacations, those are a lot more expensive, a lot more planning that can be involved. Sometimes people spend two, three years saving for that vacation, whereas the smaller ones can kind of be segmented or kind of built into like an annual budget too. Um, so it really depends on, you know, your priorities. And obviously some people want to sacrifice retirement savings to go travel. Like you just said, your client was, or the husband was interested in that. Um, but some others, and we obviously are more of a testament of focusing on long-term retirement goals first, and then any, you know, icing on the cake is how we, how we fund those vacations.

Yeah, how you fund it. I have to ask you about that. I would assume what I hear you saying is I assume that there's three areas that people should not use to fund their vacations. And that's you should never take out of your retirement fund for a vacation, especially before you're retired, right? That's for retirement. So in your working years, you don't want to dip into retirement funds to pay for a vacation. You probably don't want to. What about people who put vacations on credit cards? Yeah. Probably don't, if you don't have the money, don't put it on a credit card, right?

Yeah, if you're not paying off that credit card, do not charge your vacation to it because that's going to make it 20% more expensive. That's going to definitely increase the burden for you. But if you are just going to swipe it and pay it off, we're fine using cards for getting the rewards or the points because a lot of them are travel related. But if you're going to have a balance, we definitely advise saving more and think about paying in cash.

Yeah. I mean, my wife and I early on made that mistake. We would go on a vacation and put it on a credit card and then we'd pay it off over the next, you know, we didn't have the money up front. So we put it on a card. We don't do that anymore. We haven't done that in a long time. You've learned. Yeah. So we learned. But also probably the third thing you shouldn't touch is your emergency fund. You want to make sure you leave that. fully funded, right? So what I hear is maybe is what's the solution? Have a separate like vacation fund?

So it depends. Like I said, if it's something smaller and you want to build it into like your annual budget and you know, maybe you plan on spending a thousand dollars a year traveling, um, some smaller trips a couple of times a year, um, that one necessarily doesn't really need to be saved for it. It might just come out of like your cash flow or your salary. Um, but if you're planning that two week Italy vacation and you need to save up for a couple of years, We typically recommend setting that money aside, you know, probably getting it out of your checking account because if it's in the bank, it's probably more likely to get spent. If you can segment it into like a high yield savings account or like a money market account, something that's nice and stable that would earn a little bit more interest and isn't commingled with like your monthly bills. Getting that money set aside somewhere is a good way to help people stay focused and, you know, bookmark those, you know, that pool of money.

That's a great point because when money goes into what I call our general fund, the general fund, which is our checking account, poof, it's gone. You're not going to save any money that goes into the general fund. It's like our government. If your tax dollars go into the general fund, it disappears and you don't know where it goes. So that's a great point, Zach. You know, have it set aside, maybe someplace where it can earn some interest while you're saving. And it's separate from your checking account, right?

Yeah. You're not tempted to spend it and then restart all of your savings.

Yeah. So, so true. Now, you know, and then you talked about, you keep referring to a two week trip in Italy. That's probably less expensive than a trip to Disney world right now. Yeah.

I've never been to Disney, so I can't attest to it, but Italy was not cheap.

I can. For our retirees out there who are listening, who are already retired, if you're thinking about taking the grandkids to Disney World, my mother-in-law did that, took her kids and all their children. to Disney world where there are 11 people, airfare, the stay and the tickets and a week at Disney. Um, I don't even want to tell you how much that was. That was crazy. That was insane. Yeah. A small home costs. Yeah, that's it. It was way more than my parents paid for their last house, actually.

You bring up a good point, though, Tony. One of the next steps that we want to kind of think about is, you know, how do we choose that type of vacation? Because are there little kids, are there children that are going to be attending? Are you older and maybe not able to be as active or mobile as you once were? How long of a trip? How much time off work can you get? These next set of questions are kind of what help us pinpoint or narrow down at least the options of the vacation styles that we can choose from.

Yeah, that's true. Let's say for just an example, let's say you have a two year old. That's going to limit where you go. Right, Zach? Yeah.

Yeah. We took her down to Fort Lauderdale last fall and that was a lot. I can't imagine taking her to Disney and doing much else. Not yet. Too young. Chasing her around was enough of a vacation for me, you know, enjoy that time spending with her.

You're going to want to take her to Disney World at some point, but wait a bit so she can enjoy it more and we'll remember it. That's my advice on that.

That's what we've talked about, too, is like those big ones we're not doing until our kids can remember it. Because, you know, memories are one of the big benefits you get from vacation. So if you don't remember it, like, is the vacation worth it?

Right. You want to create memories and events. But I think certain trips, if they're going to cost that much money, it's important to wait a bit, I think. I had three kids. They're all grown now and out of college. So hindsight's 20-20, right? Ken, talk to me about your family and your vacations.

We're leaving on Sunday, headed down to Fort Myers for spring break. So... We properly prepared for it. We set aside money over the last year for spring break. So my wife and I do enjoy a cocktail every once in a while. So my goal with this vacation is to come home and not be financially hungover.

Oh, no.

Yes. Like, you know, we may have some drinks and we won't be hungover, but I don't want to be financially hungover. Beverage. You know, if you plan everything in advance, we try to pay for as much as we can in advance, and that's actually a big thing that you want to do going into a trip, is figure out what are the big ticket items, because if you can pay those in advance or estimate those costs ahead of time, that really, really, really helpful. So in our case, we knew we didn't want to get up at six o'clock in the morning to go get chairs by the pool, because it gets really popular during the heat of the day so it was like 50 bucks, but we rented chairs ahead of time, like six months in advance, so now we can just, just get down there whenever we want and sit around for the entire day. Don't have to worry about somebody stealing our chair or throwing our towels down too early. So planning, whatever you're doing, planning in advance and when possible paying in advance is really helpful.

Well, it takes a lot of the stress away from your trip. The whole reason to go on vacation is to get rid of the stress of your daily lives and to relax. And so many people have a hard time relaxing because of the financial aspect of the vacation. And the more you take care ahead of time, that's a great point, Ken. That's a great tip for our listeners and viewers. And I've learned that the hard way, and my wife and I need to be better about that. We're kind of seat of the pants. Hey, let's go here this day. And a lot of people can't operate like that. And we also cannot ever vacation with her sister and her husband anymore because we've tried that. And her sister plans every single second. Like, I mean, there's no I'm like looking, OK, where's the free time? Where's the freedom during the I mean, and she has it all planned out. And that's great. We're almost too much the other way. Like, oh, we might do this or we could drive over here. And then, you know, and we've learned the hard way, like, hey, we should have booked a hotel here before. I mean, we've actually went somewhere and didn't have a place to say, I mean, that's, that's crazy. That's, that's when we were young. It sounds like an adventure. That was BK before kids, but yeah. And we have memories from it. I mean, it creates some fun memories, you know, tragedy plus comedy equal or no track time. Tragedy plus time equals comedy. Right. That's that's what they say. So when you have these things at the time, it's not funny. But later now we look back and laugh. Remember that time you went to this place and then all the hotels were booked because there was an event happening. So, Ken, is it just you and your wife going down to Florida?

Oh, no, we got Charlotte and Jack. So taking the kids. Yeah. Charlotte will be 14 here in a couple of weeks and Jack will be 11 this summer. So 14 and 11.

What are you guys going to do? I mean, I get what you and your wife want to do. You've said that. What about what? What about the kids? What do you guys got planned down there for them?

There's a lot of kayaking opportunities down there. Oh, fun. And then they've got like a guy that wears a goofy nature hat and takes the kids on little nature walks here and there to go see stuff. So this is a resort? Yeah, yeah. It's called the Pink Shell.

Okay. But you mentioned kayaking. I've been to Florida a few times. There are alligators. Anywhere there's water... there are alligators. You understand that, right? That's good to know. Yeah, supposedly it's all manatees, even on the... Oh, the manatees are great. If you get to, a friend of mine was down recently and they got to, a manatee swim right under their kayak, and they got, they reached out and touched it. And yeah, they're nicknamed, uh, sea cows, the cows of the sea, because they just around and, yeah, I don't know if they eat grass, but I don't know. It's seaweed, maybe, but grass. Well, I don't know. They're not on land too much. I don't know. Probably seaweed. Okay. So what else do we need to know about here?

So yeah, those last couple items were one of the big things that we want to make sure we mentioned was planning those big ticket items, the flights, the hotels. What are you going to do for meals? Are you, Eating out every meal. Are you all inclusive? Are you getting groceries and cooking? And then the next thing is just like Ken said, kayaking, you know, planning your excursions, figuring out that itinerary. Some people, like you said, Tony, want every single minute booked and planned. Some people want to have flexibility. And it really depends on the type of people that you are, who you're with. If you have kids, we suggest a little bit more flexibility. flexibility. If it rains, Ken, are you still going kayaking? Do you have a backup plan in case something happens to one of your original activities that you wanted to do?

Board games.

We're bringing board games. That's smart. That's that's a good idea. We when my mother in law did this week long Disney trip for her three kids and all their kids, all the cousins went and there were actually there were 12 of us. We had one night where we planned on. We had different times where we'd eat in in the in the Airbnb area. So we'd get, we got groceries and different families would take turns with breakfast and then we'd eat at the parks, certain meals. And so you do need to plan these things out, right? I mean, it really does help. Yeah.

Cause if you don't, you might end up spending more than you originally thought. And then it goes, all goes back to that financial stress. You know, is that going to stop you from enjoying the vacation? If you end up finding, Oh, I'm spending way more than I originally planned because I didn't think all of these things through.

Yeah. Yeah. And I like how I know you put in your bullet points. You don't plan every single minute. Make sure you have at least a few hours of free time every day or certain times. But I like the idea of bringing board games, taking photos of manatees and crocodiles for and sending those back or something. Alligators, I should say. I want to see pictures, Ken, of you wrestling, holding open the mouth of a gator, a big gator down there. Come back like Chubbs Peterson minus one. Don't lose any digits or a limb. Yeah, don't use any digits, lose any digits. Well, you know, Zach, this has been great. And, Ken, I don't know why you said the things you did about Zach because he's been great on the show. He's been great on the show. I know you were worried about bringing him on the show, Ken, but there haven't been any expletives that we have to edit out. Not yet. Yeah, this is great. And I now know who the brains of the operation is. This is great.

You laid eyes on him. Yep. Yeah, yep. One, uh, one last thing in closing that I think everybody should do is, and Tony, everybody's mentioned it, like when we say don't plan every single minute, I think one of the best things you can do on vacation is actually plan on spending some time, whether it's a half a day or a meal, and actually ask local people or the people that work at the hotels you know, what they would do, you know, what, what's something cool that you would recommend. Sometimes you find some hidden gems and if you don't find anything that's really cool from a local recommendation, then you just relax. And that's, that's what vacation's all about.

Yeah, you ask my wife and kids, that's me in a nutshell. That's what I love to do. I want to know, okay, I want to find the locals and see where they eat, what the best pizza for them. Not the pizza that delivers to the hotel. I'm talking about where is the small joints and the food places where the locals like to eat. I like to explore, drive around. Like, look at that weird little antique store. Let's go in there. You know what I mean? I really like to – my wife and I like to explore the area and get to know the area rather than just, okay, we're doing this this day, this this day, and this this day, and it's all the tourist stuff. We typically don't do that, which drives, by the way, my sister and brother-in-law nuts. But –

That's why I don't travel with them anymore.

Yeah, exactly. Exactly. Used to be their family and us. We'd all take one trip together with our kids and all their kids. So her brother and her sister's family and our family and her mom. And we'd all take like a week once a year to go places. But yeah, there were some nightmares. Difference of opinions. Yeah. Yeah.

And then kind of on that point, Tony, like one of my last suggestions for planes vacations is just to kind of go with the flow of things. Things are always going to come up. Like you said, tragedy in time leads to comedy down the road. So just because something happens now, it may be very stressful and it may think like it's ruining your vacation. But just kind of roll with the punches and, you know, get back up and just be committed to enjoying the time that you have and being around those that you care about.

Yeah. Yeah, I like that. And I like the, you know, we started off the financial aspect, budget for it, save intentionally, right? Plan ahead for the big items and the big events and then go from there. I like that. You know, don't plan every minute, though. I really think you'll enjoy it more if you don't plan every minute. That's a good point you made. Yeah. All right, guys, anything else? Ken, you've been kind of quiet today. I've just kind of taken over. I love talking about vacations. This is a fun topic.

All I would say is the memories that you make will last longer than the receipts. So if you go a little bit overboard here or there, kids grow up so fast. I know my daughter's going to start getting her driver's permit here and there. six, seven months. And once she drives, she's so independent, I probably won't really see too much of her anymore. So I'm just trying to enjoy every single minute as I can of this family time. And if I have to work, you know, another three to six months at the end of my career, once the kids are moved out anyway, that's okay. But we'd wholeheartedly encourage people to budget and come up with a game plan, but don't beat yourself up. Sometimes there are moments that you won't get back. All right, Zach, any last final words of wisdom from you?

No, I think Ken summarized it pretty well. Vacations, at least for our family, are very important. They're great memories, great time for us to spend together. So if, you know, sacrifices elsewhere in your financial plan have to be made, if that's a big enough priority for you, we just suggest, you know, not derailing your entire plan to go on a trip. But, you know, if I need to not eat out or if I need to not go to the movies as much as kind of help save, you know, it's compromising some expenses for your bigger priorities. And for us, that's definitely one of the biggest priorities we have.

Excellent. Yeah, I would agree. Well, guys, great show today. It was fun having the Zach Attack join us. I love that. I love that. Zach Bachner. And I had to say it that way. Ken, great show today. Before we go, though, if people... want to know, maybe they're planning for retirement or in retirement, how do I budget or work in a vacation into my retirement plans? Or hey, how do I, am I financially okay to use this money for a vacation? Or I just want a second opinion, get some reports run to see if I have a solid plan in place for my finances and for my retirement funds. How can they get a hold of you and Zach and the team there at Summit Financial Consulting?

All the time we ask people when we sit down with them or they're getting ready to come in, please bring in your retirement income plan. And their eyes just gloss over because most people do not have a retirement income plan. They don't know at what age they're going to retire. They don't know what their expenses are going to look like during retirement. They haven't looked at health insurance costs or what tax brackets may look like because of our ridiculous government debt. I highly encourage all of our listeners and viewers to give us a call. We can discuss retirement, retirement income plans, vacations, buying a vacation home someplace warm. Do you own both places? Do you just move into one? Do you go down for five years and come back? Is there enough space for the kids and grandkids to come visit? We will help you crunch all those numbers. That's what Zach does most of the day, and he does an absolutely fantastic job at it. Give us a call.

586-226-2100 or visit our website summitfc.net. We'd love to connect with you. All right, great show today, guys. Listeners, that does it for today's episode of Money Talks with our host Ken Wink and special guest Zach Beck. Thank you for joining us for Money Talks. Don't head into retirement without a strategy that addresses both income and taxes. For more information, please contact Ken Wink at Summit Financial, working with people you trust. Call 586-226-2100 or visit summitfc.net. Join us again soon for another episode of Money Talks.