My family and I are beginning a much anticipated family vacation. We’ve been saving our funds for months, have our budget set, and are ready to execute our spending plan. We thought about how we normally handle our finances while on vacation, and thought of doing things a bit differently this time.
The Envelope System
Our usual vacation financial plan includes the following steps:
- Withdraw our budgeted vacation cash from the bank
- Create a daily spending plan
- Put the amount of cash targeted for each day into an envelope
- Each day, we take the appropriate envelope and use the money for the day’s activities
While this does help us to keep our spending on track, it does have a few negatives:
- We carry around a large amount of cash
- We don’t earn any credit card rewards
In an attempt to address those negatives, we thought of trying something different.
Credit For Everything
- Create a daily spending plan
- Use a credit card with a good rewards program for every purchase
- Keep track on our cell phone the spending for the day to know how we’re doing against the day’s spending target.
- Make one payment after the vacation was over
This system would be more secure, and help us earn rewards, but will we be able to stay within our spending limits knowing that our credit limit would allow us to spend more than we have budgeted?
At one point in our lives, I would have immediately dismissed the credit card plan, knowing the temptation to overspend would be too great. However, I think our self-discipline and our desire to stay on track financially has grown significantly over the last few years. We’re going to try option B, and see how it works for us.
How about you, Clever Friends? How to you handle your finances while on vacation? Do you prefer to carry all cash, no cash, or something in between?
Brought to you courtesy of Brock
I definitely wouldn’t carry around large amounts of cash. A lot of vacation spots have a lot of cash only stores, so I would carry enough to be able to go there if I need or want to.