What to do with the travel itch?

A good plan is a flexible plan. It should allow to adjust to the new reality. If not, it is more heavy weight that you drag along rather than a map towards your destination.

When reviewing one of the long term life objectives, it is to travel, to show the world to the kids. But figure this out: it costs money. and spending more means saving less.This money needs to come from somewhere. Getting a second job is a solution that I discard. I work to life, not the other way around. I want free time to enjoy life with family and friends. So, the money needs to come from the current sources.

income – expenses = savings

income – expenses – holidays = savings – holidays = less savings

Good thing, I did not discover this just today. It has been part of the FIRE planning as from the start. The real question is more: how to deal with it when calculating savings rate and the amber index?

Right now, it is easy: all the money that is not spend on living expenses and this years holidays goes into the nest egg. It ignores the fact we will spend a part of the money on travel in the coming years.

travelThese travels are supposed to be big holidays with the kids, showing them a few distinct areas of the world. Think the west coast of the USA and its national parks, think New Zealand or an African safari. This typeof holiday is not covered by the travel budget that is foreseen for in given year. They need extra funding. This funding will come out of the nest egg.


Where are we?

The current FIRE calculator has travel included as a parameter for the FIRE date calculation. This is a good thing. It is this very likely that FIRE date will not be infected too much by our travel plans.

The downside of this solution is that the travel funds are hidden in the net worth. As such, I overestimate the net worth I have. Not seeing the travel funds could also mean that I will hesitate to use the funds when the opportunity for travel is there.


A change I could to make is to split out the travel money from the pure nest egg. As such, I have a better view on where we stand, both from a travel perspective and a true amber index. This means I also need to start officially contributing to the travel fund. This will decrease our saving rate. But in fact, it is already the case today, it remains just under the radar.

On the same line, I would add the company pension savings we have – but can not touch till we are 65 or so – to the amber index. It is money that belongs to us. Right now, it is hidden.

Something similar would need to be done for a house renovation fund. Or maybe here we could use the emergency fund. Or just split it off at the time when we start considering to remodel the house.

How do you manage this travel fund topic? What pros and cons do you see?







11 thoughts on “What to do with the travel itch?

  1. Ciao ATL,
    In my opinion money spent “living” is much more valuable than money sitting in the bank… This is probably why I am not posting stats on how much I save, I have difficulty giving myself hard targets there if that means not enjoying my life… Enjoying might be a pizza out with my partner, a present for her, a short holiday or a new phone… Of course I am very frugal, if I can, so in the end I do end up with money to invest in my “fund”, but I am not too hard on saving a lot, there is little point in being the richest man in the graveyard… 😛

    Big holidays with the family… I see it as an investment in your kids!! 🙂

    ciao ciao



    1. Hey ATL, it is good to hear this argument again: there is little point in being the richest man in the graveyard
      I start to value the living now more and more, and family time is indeed a big part of that.


  2. I agree with your philosophy of making sure you have funds allocated to travel — both now, while saving for FIRE, and later, once you actually reach early retirement. Dedicating a specific fund for that purpose seems like a great way to ensure that it’s always a priority.


  3. Hey ATL,
    for us no separate fund, it all directly comes from the checking account (in parts perhaps). It is all budgeted for (now and during FIRE) and covered under the expenses section of the budget, and will therefore directly affect our savings rate.
    As our Cheesy Index is just an amalgamation of all our assets, the holiday will affect this number once paid. But at this stage it’s merely a blip on the radar, so to speak.
    One thing though, we would never skimp on the holidays. However, we always to try to pay the least amount of money for maximum experience. Even when undertaking longer trips.
    Good luck determining how you want fund the fun.


    1. Hey CF, how do you budget for the travel item?
      I think we try to do the same. Each month I would put a part of our income apart, as such impacting the savings rate.
      Where I go different: The amount would go onto a travel account, that I exclude from the FIRE net worth calculation


      1. The amount in the travel & leisure portion of our budget is based on actual numbers from the previous years and rough plans for the trip(s). This year for example, we will likely do a road trip to and maybe a couple of day trips (no firm plans yet), so we budgeted about €1850 for the year. The cost of the car and food is already covered under transport and groceries, so the budgeted amount is purely for accommodation, entrance fee’s and various miscellaneous expenses during the holidays. Considering we are planning a two week trip, this should be more than sufficient to get around (about €100 per day for the three of us).


  4. Working and working and no leisuring is unthinkable. We might as well call it imprisionment in our own FIRE path. That’s why Mr. And I have our list of this we would plunge on. One of which would be traveling. Yes, it would slow us down, but cold and long winter of North America wearing us down, we don’t hesitate to take a long week off to bathe in the sun of South America, :p. That’s the beauty of FIRE mindset. When you have the mindset, so go into budgeting mode, and just treat our traveling as a “must spend” category and go from there.

    Have fun planning your trip, I’m sure you’ll have a blast on your vacation.


  5. Hi Amber
    I have exactly the same dilemma. We love travelleling and I think our kids are old enough now to remember it. I try to spend money on experiences rather ‘things’. My fondest memories as a child were of being on holidays.
    We are saving up for an overseas holiday in 2017 and our main savings is in our mortgage redraw (we have adequate projected adequate retirement and our taxable investment is our investment property( once the mortgages are paid we plan on putting all that into taxable investments) so we are saving in the mortgage redraw as at least we are getting the interest offset. But it is expensive to take 2 adults and 2 kids overseas especially from Australia where we live and represents around 25% of our normal savings amount in a given year (although we are taking 2 years to save it up). So it is not insignificant.
    Longer term, I think of travel as the icing on the cake, if markets are above long term average, we will be having a really good holiday (overseas), if not they will be more modest (domestic). I have a mix of these on my bucket list, and hopefully we will have enough years to do most of them.
    Good luck with your saving and look forward to reading about your travels.


    1. that is our plan. Combine some domestic travel and european travel with overseas travel. Australia is on our list!
      The idea is to start saving now, so in a few years, when the kids are like in their teens, we can do some overseas travel. It would be great if we can goto ski every other year as well.

      Liked by 1 person

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