308 | How to Take a Vacation Without Going Into Debt

Many lawyers can’t take a vacation without going into debt and/or stressing about money the whole time.

But a little planning on the front end could completely change that experience.

In this episode, let’s talk about practical strategies to pay for your summer vacation so you can enjoy your time away without stressing about money.

• • how most lawyers approach vacations
  • the number one reason lawyers feel stressed about money on vacation
  • thinking through the costs of your vacation
  • how to fund your vacation

• Apply for a strategy session

You’re listening to Personal Finance for Lawyers. I’m Rho Thomas, and as a busy wife, mom, and former Biglaw associate, I know all too well the tension between the culture of the legal profession and pretty much everything else you want to do in life. That’s why each week, I’m bringing you the information and tools you need to improve your money mindset and manage your money to create true wealth. Because ultimately, it’s not about the money. It’s about the freedom and flexibility the money affords.

Hey friend. Welcome back.

Today, we are talking about vacation. Summer is right around the corner. My kids are getting out of school in the next month and a half, and if you’re in a different part of the country, maybe it’s a little bit of a longer timeline. But the fact of the matter is, summer is coming, and a lot of people want to take vacations in the summer.

This is the time to start thinking about that. You don’t want to wait until summer gets here, and then you’re scrambling trying to figure out how you’re going to pay for vacation. What I’ve seen a lot of times is people don’t think about what they’re going to do for the vacation in terms of paying for it and all of that, and then they end up not having a great time on vacation, because there’s always this low-level stress about how much money they’re spending.

And it’s only because they never thought about how much the vacation would cost, how much money they needed. They didn’t plan for it. I don’t want that to be you. So if you are planning to take a vacation this summer, let’s start thinking through how you’re going to pay for it now so that when you get to that vacation, it can be stress-free and you can have a great time and enjoy yourself.

The number one reason why lawyers feel stressed about money on their vacations is because they don’t think through the planning on the front end. We plan vacations. We will plan what we’re going to do on the vacation, where we’re going to go all that kind of stuff. But I’m talking about the paying for it part.

What I have seen is people will go on vacation and they just put it on a credit card and figure they’ll figure it out once they get home. And so there’s always this underlying current of stress because they’re looking at how much money is going on that card? What’s that balance going to be when I get home? And that’s not a way to vacation. That’s not a way to enjoy yourself. So let’s think through what your vacation might cost.

So first think about when you want to go. Are you gonna go in June? You’re gonna go in July, maybe August. The further out the vacation is, the more time you have to plan on the money front. So think about when you’re going to go on vacation.

Think about where you’re going to go. Do you want to go somewhere that you’re going to have to fly to? Are you going to go somewhere that you could drive to? Let’s figure that out, and then think about how much it’s going to cost to get there.

So let’s look at the cost of flights, if you’re going to fly. How much does it cost if you go on this day? Could you play around with the dates and see if that changes the cost of your flight? If you’re going to drive, how much is it going to cost for gas to get to where you’re going? Think through that stuff now.

Then let’s think about where you’re going to stay when you get there. If you’re going to do a hotel or an Airbnb or something like that, how much is that going to cost? How long are you staying for? Could you play with that timeline to change the cost, if necessary? Maybe instead of doing a week, you do five days, or instead of doing two weeks, you do 10 days. Things like that can really change how much that trip costs. So think about how long you’re going to stay for your vacation, and then think about how much that’s going to cost. Add that to the cost of getting to where you’re going.

Now let’s think about food. How much is it going to cost for you and your family or your loved ones to eat while you’re on this vacation? Think about breakfast, lunch, dinners. Where is the food coming from? How much is it going to cost? Let’s estimate it now.

I like to overestimate on all of these things because I’d rather have more than I need than to get there and not have enough. But even if you don’t quite estimate correctly, even if you’re a little bit under, the fact that you’re spending this time thinking through it now means that it’s going to be much less of a financial crisis and more of an inconvenience that you spent a little bit over your estimate.

Now think about if there are special things that you want to do while you’re on vacation. Are there attractions that you want to see, or certain places that you want to go? Maybe there are museums or shows or things like that. Look up how much those things cost, and add all of that together.

So we’re talking about how much it’s going to cost to get you there, how much your accommodations are going to cost, how much food is going to cost, and then how much any attractions or things like that cost. Now you’ve got a really good estimate of how much this vacation is going to be.

So rather than just pulling some number out of thin air and saying we should be able to take a vacation for this amount of money, you’ve got an actual estimate. Rather than just going and putting everything on a credit card and praying about it, you’ve got an estimate. So now we got to talk about how you’re going to pay for it.

So let’s say that it’s going to cost you $3,000 to take this vacation. If you go on vacation in June, you’re going to have to save $1,500 for the next two months to be able to take that vacation. If you go on in July, that stretches it out a bit, so now it’s only $1,000. And if you go in August, that stretches it out even more, so you’d be at $750.

Figure out where that money is coming from. My husband gets paid bi-weekly, which means there are a couple of months each year where he gets three paychecks. And so we are starting to set money aside for vacation from those months because we’ve got that extra money coming in. So if you or your spouse or partner are on a bi-weekly pay schedule, that is something to consider. It might not work out this year, just depending on when those three paycheck months fall for you, but that’s something to think about.

The other thing you can do if you’re not on a bi-weekly schedule or you just don’t like that system, is what we just talked about, which is mapping out how much time you have until you’re going to take vacation, and then setting aside that money from each month so that you’ve got it ready to go. The point is for you to have this money set aside so that you are able to pay the vacation expenses as they come up.

So if you’re setting aside money each month, like we talked about, you’re putting that in a savings account. Hopefully, if you’ve been listening to me for any length of time, it’s a high yield savings account, not with those brick and mortar banks, but something where you’re going to get more interest on your money.

Put that money aside in the savings account, and you know that it’s for vacation. I have talked before about Ally Bank. They have these savings buckets where you can name the amount of money in your account, so it’s a single account, but I can say this portion of that money is my emergency fund. This portion is for my vacation. This portion is for a down payment, or whatever it is.

But I really like that system because being able to see exactly what the money is for, I think sometimes motivates you because it’s like, Oh, I’ve got this much my vacation fund. Let me keep going and make good choices so that I can save more. But then it also keeps you from raiding that money for other things. So you’re not going to raid the emergency fund to pay for your vacation, because it explicitly says it’s for emergencies.

But whatever system you use, you want to be setting that money aside in savings so that it’s there ready to go on vacation. And because you’re paying for it now in the spring, then come summer, when it’s time to take your vacation, you are going to have a much more stress-free experience, and you’re going to enjoy yourself much more.

This is the kind of thing that I have been teaching my clients for years. If you would like help with mapping out how you’re going to do your vacation, apply for a strategy session. Head to rhothomas.com/apply, and let’s talk.

All right, that is it for this week’s episode. Thank you for being here as always. Please take a second and share this episode with a friend or two who you think could use this information. That is how we get this podcast and this information in the hands of as many lawyers as possible, and as always, I appreciate your support.

As we close out, friend, I pray that you take the information you learn here, apply it in your life, and open up to the realization that wealth is available to you. As you do that consistently, week after week, you’ll continue to take steps to take back control of your time, build wealth, and live the life of freedom and choice you deserve. Talk to you later.