June 2019: Choice, Control & Collaboration — The 3 Cs to Help You Plan for Your Vacation

By Marguerita Cheng, CFP® • CEO, Blue Ocean Global Wealth

“A journey of a thousand miles starts with one step” has many practical applications to help you navigate your hectic, enjoyable modern life.

The intent of the statement seems fairly clear, however. To me, it means that no matter how daunting, stressful or intimidating the task may appear, it all starts with one step. You can apply the practical wisdom of ancient Chinese philosopher Lao-tsu to plan a family friendly vacation that is affordable as it is memorable.

Based on consumer surveys, the average family vacation costs between five and ten percent of total household income. For example, if your family earns $60,000 per year, financial experts advise allocating $3,000 to $6,000 of your annual income toward your annual family vacation budget. Other families with extended family living overseas may prefer less frequent, international travels.

Regardless of your vacation budget, it is important to develop a plan to help you allocate this money wisely. By understanding your options, you can be a savvy consumer and get more vacation bang for your buck.

Three C’s come to mind: Choice, Control and Collaboration. Here are some guidelines that may help you plan your vacation spending:

Choice: By starting early, you will have more choice and more options. Use the week between Christmas and New Years to begin researching your options.
Control: Budgets are like diets, they can feel restrictive. But as an informed consumer, they help you stay in control of how you spend your money. You may be deferring consumption today, but you’ll have more consumption in the future. Take every opportunity to save for your vacation. For instance, your family likes to dine out once a week. Consider cooking at home for two of these meals a month and allocate the savings to the family vacation fund. Evaluate your current discretionary spending for recreation and entertainment as well.
Collaboration: When you include family in the decision-making process, the experience is more collaborative and enjoyable for all. Keep them involved, from where you’ll go to what you’ll do. Establish a goal based upon the destination and track the goal as a family, and review progress and contributions. Use the family vacation budget exercise as a teaching/learning opportunity for your children.

The bottom line: You want memories of your summer vacation to last a lifetime, just not the expenses or payments. Vacation may be all you ever wanted and you had to get away, but planning ahead will help ensure you don’t feel summertime sadness when it comes to your personal finances.

About Marguerita M. Cheng: The founder and Chief Executive Officer of Blue Ocean Global Wealth is a regular columnist for Investopedia & Kiplinger, and has worked as a spokesperson for the AARP Financial Freedom Campaign. Prior to launching her firm in September 2014, she was a Financial Advisor at Ameriprise Financial and an analyst and editor at Towa Securities in Tokyo, Japan.

She is the recipient of the Ameriprise Financial Presidential Award for Quality of Advice and the prestigious Japanese Monbukagakusho Scholarship. In 2017, she was named the #3 Most Influential Financial Advisor in the Investopedia Top 100, a Woman to Watch by InvestmentNews, and a Top 100 Minority Business Enterprise (MBE®) by the Capital Region Minority Supplier Development Council (CRMSDC).

Marguerita’s certifications include: CFP® professional, Chartered Retirement Planning Counselor^SM, Retirement Income Certified Professional® and a Certified Divorce Financial Analyst. As a Certified Financial Planner Board of Standards (CFP Board) Ambassador, Marguerita helps educate the public, policy makers, and media about the benefits of competent, ethical financial planning. She serves as a Women’s Initiative (WIN) Advocate and subject matter expert for CFP Board, contributing to the development of examination questions for the CFP® Certification Examination.

She volunteers for several organizations including: CFP Board Disciplinary and Ethics Commission (DEC) hearings, she has also served on the Financial Planning Association (FPA) National Board of Directors from 2013-2015 and is a past president of the Financial Planning Association of the National Capital Area (FPA NCA). Click here to learn more about Blue Ocean Global Wealth.

Thoughts, questions? Click here to contact Marguerita today.