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Should I spend $5k on a vacation this summer

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  • Should I spend $5k on a vacation this summer

    Hello everyone,
    It's been a few years since I've posted on here I've mostly been a lurker. I would love to get y'all's thoughts on something I'm struggling with. I've got an opportunity to go on a guided fishing trip this summer in Alaska with some folks from my church but with flights, lodging, guide fees etc I'm calculating that I'd be spending about around $5k. I've never really taken expensive vacations so I'm a little hung up on dropping that much money. I guess my question would be, at what point in your financial journey is it ok to drop 5k on a vacation? 29 and single with emergency fund in place and am contributing to 401k, Roth IRA etc. Thanks in advance for your advice!

  • #2
    Do you have debt, other than a mortgage? Do you have the cash on hand to cover the trip? If no and yes, I say go for it. Some money should be saved for the future, but some should be spent and used for our enjoyment!
    My other blog is Your Organized Friend.

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    • #3
      Originally posted by creditcardfree View Post
      Do you have debt, other than a mortgage? Do you have the cash on hand to cover the trip? If no and yes, I say go for it. Some money should be saved for the future, but some should be spent and used for our enjoyment!
      No debt other than house. About $25k in non-retirement accounts so I'd be able to cover it. I do appreciate the advice, CCF!

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      • #4
        And I would guess potentially you could save some of the money for the trip from current cash flow or reducing other expenses for the rest of the year if you wanted to take less out of your non-retirement accounts.
        My other blog is Your Organized Friend.

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        • #5
          An extreme is there is contributing to your retirement accounts and then there is maxing your retirement accounts -$6k for Roth and $19k for 401K.


          there isnít really enough information to give solid advice

          this could fall into the You Only Live Once category.

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          • #6
            I'm biased because I live here (Anchorage area)... but yes, you should definitely do it.

            The simple fact that you're "hung up" about such an expense is good news. Combined with the fact that you've got no consumer debt, have cash in the bank, and are actively saving toward retirement (at least 15-20% of gross income, I hope?), and it's a slam dunk. All of that indicates that (1) you're living well within your means, and (2) that you're being intentional about your finances. Those are two issues that get constantly overlooked by most people (to their financial detriment), but you've got both of them well under control. One caveat: "$25k in non-retirement accounts" sounds alot like you've included your emergency fund in there. If not, disregard. But if that is the case, I'd caution you against considering your emergency fund as 'available cash' when you're contemplating a large 'lifestyle' expenditure. Your EF is for emergencies, and nothing else.

            Otherwise, my advice mirrors CCF -- You've got a few months until your trip. If this vacation is really important to you, save up the cash beyond anything you currently have between now & then. At that point, you will have proven to yourself that you're running the show, have control over your own money, and can well afford to sacrifice the cash for an experience that is truly spectacular (believe me). Plus, you also have time until your trip to investigate ways to reduce your total costs, which will only make it more affordable.

            Side note, if you have any questions about Alaska, just ask. I love it up here, and I'm happy to help.
            "Praestantia per minutus" ... "Acta non verba"

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            • #7
              You haven't given enough info to crunch the numbers, but I don't think we need that to answer because this isn't purely a financial question. You're young. You're gainfully employed. You're conscious of your finances. You have an emergency fund. You are funding your retirement accounts. You have a nice amount in savings. You have no debt beyond your mortgage. And you have another 3-4 months before this trip happens. I think you're fine to go on this adventure.

              Is your EF big enough? Are you saving enough for retirement? I don't know, but at 29, I think you're doing well enough to splurge on this.

              kork said he's biased because he lives in Alaska. I'd say I'm biased because I'm a big travel fan and think it is so important in life in general. One of my favorite quotes is from Saint Augustine who said, "The world is a book and those who don't travel read only one page." That said, my one warning would be that once you start doing things like this, it's hard to stop. Once you start experiencing all the world has to offer, it's tough to go back to vacation being a few nights at the Motel 6 on the outskirts of town somewhere. So going forward, if you don't already, you might want to add a line item for travel in your budget.
              Steve

              * Despite the high cost of living, it remains very popular.
              * Why should I pay for my daughter's education when she already knows everything?
              * There are no shortcuts to anywhere worth going.

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              • #8
                That's actually a pretty reasonable price for an AK fishing trip. I've been there (7) times hunting and fishing and would encourage you to go.
                You'll get more opportunity in your life to make and save money, but you're only young once. Go for it and spend the necessary $$ to ship home a bunch of fish, and take lots of photos.

                P.S. The fishing will blow you away. I'll bet you'll be going back again.

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                • #9
                  I appreciate everyone's input. I was reading all of your thoughts/advise today during lunch and signed up and paid the initial deposit of $1k so it looks like I'm going to Alaska this summer!

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                  • #10
                    Originally posted by A-Aron1 View Post
                    I appreciate everyone's input. I was reading all of your thoughts/advise today during lunch and signed up and paid the initial deposit of $1k so it looks like I'm going to Alaska this summer!
                    Awesome. Have an amazing time!
                    Steve

                    * Despite the high cost of living, it remains very popular.
                    * Why should I pay for my daughter's education when she already knows everything?
                    * There are no shortcuts to anywhere worth going.

                    Comment


                    • #11
                      if you are on track with your financial goals, then do it. you only live once and dont take the money to the grave.

                      i like alaska, and been fishing there at least 3-4 times. my preference is unguided cabin rentals. Its way more economical. Having a guide, boat for trolling, kitchen staff prepping meals, laundry service, whatever is nice, but you are paying A LOT for that.

                      Straight up cabin rental, you take care of your own meals, fishing gear, and whatnot probably runs 2k per head for a week plus airfare, food, car rental. All that stuff comes out cheaper if shared.
                      Last edited by ~bs; 03-18-2019, 06:16 PM.

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                      • #12
                        I feel like you need to live your life to the fullest, there's nothing wrong if you want to go for a vacation. Taking a break is essential, you have to relax once in awhile.

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                        • #13
                          I think Kork really summed it up nicely.

                          So glad to see youíre going. Enjoy your trip!!

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                          • #14
                            Thanks everyone. I'm excited to go! I've been wanting to start traveling. We are going to be staying in Soldotna, AK.

                            Side question...for you folks that travel and take yearly vacations. Do y'all have a "travel fund" that y'all contribute to throughout the year or is it just a vacation by vacation basis? Also, is there a good rule of thumb for the amount spend on travel to not exceed in terms of a % of income or savings?

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                            • #15
                              Originally posted by A-Aron1 View Post
                              for you folks that travel and take yearly vacations. Do y'all have a "travel fund" that y'all contribute to throughout the year or is it just a vacation by vacation basis? Also, is there a good rule of thumb for the amount spend on travel to not exceed in terms of a % of income or savings?
                              That is a very practical way to go about it. It also helps you to set & stick to a budget for your travel. We've done it both ways, and I personally prefer using the travel fund. But either method works just fine.

                              As for how much to spend, it just depends on what you're doing with your other money, what your priorities are, and what you're comfortable with. Personally, we've hovered around 2-3% of our gross income for travel ($5k-$6k/yr), which has thus far been somewhat conservative, given it's the two of us + 2 little kids. So we may end up bumping that up.
                              "Praestantia per minutus" ... "Acta non verba"

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