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by Neale Godfrey
July 09, 2018
by Neale Godfrey
July 09, 2018
Now that spring is finally here, it’s that time again to think about shelling out money for a family vacation. And, you are not alone. According to ValuePenguin, “Vacation spending is equal to about 2% of the total budgets of all U.S. households annually…” With significant spending aimed at making the whole family happy, don’t you think it’s the right time to get the kids involved in the budgeting?
The average family will spend; “$581 for a domestic trip… [and] …$3,251 for an international trip,” according to ValuePenguin. And, the High Net Worth cohort – those with more than $1 million in investable assets – will be spending much more, as per a study conducted by BMO Private Bank. The study found that “…affluent Americans expect to spend an average of $13,249 on leisure travel… Sixty-three percent plan to take more than three trips this year, with the average affluent American taking six trips for pleasure.”
Whether or not the vacation is educational, these numbers should convince you to concentrate on how you can turn vacation planning into an opportunity to teach your kids some important money lessons.
Vacations can be both a rewarding, learning experience, as well as fun for parents and children alike if you turn the vacation into a family project from start to finish. When children take an active role in planning a vacation, they make an investment in their own adventure. The experience also becomes more meaningful.
To begin, set some cost and travel parameters, then have your kids go online to come up with some vacation ideas. Set a deadline for them to present their ideas to the whole family at a family meeting. They have to come up with ideas that will suit the whole family, within the budget. A hiking trip in the Himalayas is not a great idea if Mom or Dad has issues with heights.
After the family decides on the place, it’s now time for each family member to drill down more deeply into the location, its history, activities, museums, restaurants and hotels that are going to be on the agenda. This is a skill that they can use for a lifetime.
Parents, Step Away From The Suitcase
If you just pack for your kids, they have not learned the important lesson of planning ahead. By the way, in the years to come, we will be the first ones to complain about how inept the kids or grandkids are at figuring out what to pack. (Have you ever seen a husband try to pack if his wife had always done that for him? It’s not pretty!)
Helping your children to create a checklist of what they will need to pack is an important life skill in organization. They will be forced to think the trip through, including any activities that they will be doing, and the appropriate clothes and accessories that are needed. If there is swimming, they need bathing suits and maybe goggles and flip-flops. If the vacation is going to include skiing, they still may need a bathing suit for an indoor pool. You get the point.
Another challenging assignment is to give each child a suitcase and explain that everything has to fit in that. “Over packing” is a disease that most of us suffer from. My family rule was: “If you can’t carry it, you can’t take it.”
The Basic Budget
The initial cost of the vacation is just the start of your budget. Make sure that you coach the kids to plan for all costs of transportation to and from the airport, airlines, hotels or camping sites, car and gas, parking, clothes that may be special, meals, entertainment, park entry fees, souvenirs, and anything extra they can think of. They also have to think of hidden costs: Who is going to take care of the pets while you are away, or water the plants?
The Budget Challenge
No matter how wealthy you are, I suggest that the kids contribute to the family vacation. It doesn’t have to be in actual money; it is just as valuable if they come up ways to economize during the trip.
Again, these are important lessons that they can use throughout their lives. For instance, rather than eating in a restaurant for every meal, the family could save money by buying breakfast and even lunch food and plan fun picnics in a park. Dinner could be the special meal out. Going to a local grocery store is also an adventure.
I’m also a big believer in setting a budget for souvenirs. Decide on the dollar amount that you will give each child. Let’s say $100. If they want to save up their own allowance to supplement souvenir spending, that’s great.
The other lesson is, “If you see it and want it, you had better buy it.” There is little chance that you will be going back to the city you just left, so your kids can buy that special trinket they will never see again. You want to avoid both the tears of heartbreak when they can’t make up their mind and the feeding frenzy of wanting every set of mouse-ears they see.