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We're Financial Planners, This is How We Travel

We're Financial Planners, This is How We Travel

Let’s set the stage. It’s our first interaction with a client. We hit them with the big question, “I want you to imagine you have all the money in the world – what does your life look like, what do you change, how do you use the money?” That’s deep. The number one response we hear… I’d like to travel more🎒🗺️

It’s no secret that travel is important to our generation. Travel allows us to experience different cultures, see how people live around the world, and inspires us to think differently. I sound like Ed Bastian of Delta when I’m taking off for a flight ✈️. Anyways, since we know travel is so important to many of you we thought we’d share how we, as financial planners, plan our travel.

The process of planning

It’s in our nature (and business name) to plan. At the beginning of every year, we sit down together and understand how much we can afford to travel. This means we have an understanding of our cash inflow, our cash outflow, and how much we are saving in the upcoming year.

For example, let’s say our monthly net take home (what hits our bank account) is $12,000. Our monthly expenses are $7,000. We have a monthly surplus of $5,000. We earmark $3,000 of that surplus toward additional taxable account savings and 529 contributions. That leaves us with $2,000 left over each month. Hmm… what to do with the money? This is why our question in the opening is so important. It helps us frame what client’s really value. Let’s say we take $1,000 per month and earmark it for travel.

In this example, there is $1,000 each month being allocated for travel or $12,000 per year. Now that we have a clear understanding of how much we want to spend on travel in a given year, we can get to the fun part. 

We start to brainstorm all of the locations we want to travel to in the upcoming year. We then assign a dollar amount to each location which includes costs for airfare, gas, stay, food, and experiences.

It may look something like this:

Hawaii: $5,000 🏄‍♀️

Minnesota/Oregon: $2,000 ❄️

New York: $4,000 🗽

Random workcation: $1,000 ⛰️

Now that you have your high-level number per location it’s time to start putting the plan in motion.

Open a separate travel account

We advocate for simplicity. This means bank accounts with purpose. We have a total of 3 personal bank accounts. We have 1 checking account, 1 savings account, and 1 travel account. Our travel account is just a regular old savings account with our bank. Why have a separate travel account? Two reasons: 1) purpose and 2) for our own sanity 🤪. 

Travel is an important value for us. We want to feel good (not guilty!) about spending money on traveling. If we had our travel money mixed in with our checking or savings account, then it would get confusing on how much we truly have allocated towards that value of ours.  

Setting up a separate travel account allows us to spend money without shame. It helps us know “hey this money is for travel, and it’s okay to spend it”. It also gives us parameters on how much money we are spending on travel because as you know it can get out of hand quickly. Agree on your funding number with your partner and enjoy the experience!

Detailed Itinerary

We’ve talked high level so far. If you’re following with me still then let’s get into some details. In preparation for this blog, I went back and looked at our 2019 Europe vacation. We spent 22 days abroad. Our trip brought us to Berlin (where I will boastfully say I ran the Berlin Marathon in under 4 hours), Prague, Munich, Salzburg, Lucerne, Lauterbrunnen, Frankfurt, and back to Berlin. Here’s how we planned our day-to-day expenses on the trip.

We created a Google sheet. We created columns with the following headers: 

Date, location, transportation, lodging, cost of lodging, activities, cost of activities

Date: Yeah, pretty self-explanatory.

Location: Where we would be on that specific day

Transportation: Details of planes ✈️, trains 🚄, and automobiles 🚙

Lodging: Airbnb, hotel, group camp

Cost of lodging: The cost of staying at each location per day

Activities: Brief description of must-do activities

Cost of activities: The cost of each activity

We went into the trip having a good idea on how much we should spend per day.  This isn’t something we typically worry about, but when it comes to travel, it helps A LOT!  Lodging and airfare were easy to price out ahead of time.  It was the shopping and eating that was more difficult.  That’s why we gave ourselves a daily spending limit and adjusted it based on where we were (Germany is much cheaper than Switzerland!).  

As the trip progressed, we simply added up our costs for the day.  What ended up happening was that we spent less than we anticipated at the beginning of the trip leaving more room to spend (or a higher daily cap) towards the end!  This way of tracking our expenses really helped us stay on budget for the trip.

For example, if you have $5,000 earmarked for a 10-day trip and have spent $4,000 by day 6, then you have $250 per day to spend for the next 4 days. If you splurge in the beginning, just be prepared to go to eat at an IKEA for your last meal.  Full transparency, we did this on our honeymoon in Barcelona. I mean, what’s more important… a nice dinner or seeing Messi play ⚽? Yeah, thought so. Just don’t ask Natalie.

This may sound tedious.  However, if you’re blowing your travel budget out of the water each time it sounds like what you are doing isn’t working.  Yes, ignoring the numbers is a great way to relax.  But, facing the reality of those numbers when you get back home sounds even worse. Contact us if you need help creating a layout for your travel goals.

In summary

We’ve helped many clients allocate excess cash flow to a separate travel account. Their feelings of guilt are removed, knowing the money is allocated for a purpose. People come to us because they want to prioritize goals, which include travel. If you want to use your money more intentionally and set goals as a household, then schedule 45-minutes with us to see how we can help.

The balance of experiencing your money and setting yourself up for future success is what we love most about our company.

Disclaimer: This article is for informational purposes only and is not a recommendation of Fyooz Financial Planning, Natalie Slagle CFP®, or Daniel Slagle CFP®. Past performance may not be indicative of future results and may have been impacted by events and economic conditions that will not prevail in the future. Therefore, it should not be assumed that future performance of any specific security, investment product or investment strategy referenced in the article, either directly or indirectly, will be profitable or equal to the corresponding indicated performance level(s). No portion of the article shall be construed as a solicitation to buy or sell any specific security or investment product or to engage in any particular investment or financial planning strategy. Any reference to a market index is included for illustrative purposes only, as it is not possible to directly invest in an index. Indices are unmanaged, hypothetical vehicles that serve as market indicators and do not account for the deduction of management fees or transaction costs generally associated with investable products, which otherwise have the effect of reducing the performance of an actual investment portfolio.

Dan Slagle
Founder, Fyooz Financial

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