Paying in advance is a far more relaxing way to travel!
12 Mar, 2023
Every blog I write generates differing amounts of feedback, but I have noticed over time, when I share details of the day-to-day bits of my financial life, it gets the most significant response from people. They find it particularly useful.
So today, keeping with that transparency theme, I wanted to share the exact costs of a holiday we took in January of this year when we went to Australia and took our first-ever cruise. I went in hugely sceptical of cruising, but I absolutely loved it.
Click on images to view bigger:
1. Royal Caribbean Quantum of the Seas, our home for 7 nights. 2. Welcome aboard cupcakes. 3. View from our balcony near Airlie Beach and Whitsundays. 4. Looking down on the top deck. 5. Snorkelling on the Great Barrier Reef with my daughter. The Great Barrier was amazing! 6. My daughter’s breakfast. The food was great and never-ending. 7. Sunset from our balcony. 8. A walk around the ship after dinner. Here you can see the walking/running track, where we ran 5km most mornings before breakfast. 9.12 Laps equals 5km.
We holiday differently from some
Our holiday is fully paid for before we leave.
Gone are the days of putting a holiday on a credit card, drunkenly shouting YOLO, only to return home to begin the panic of worrying about how we would pay for it. Paying in advance is a far more relaxing way to travel, indeed, the ONLY way to travel, in my opinion.
Today I wanted to share what we did and what it cost to do it. The costs below are for Jonny, me and our 15-year-old daughter.
It all starts with a sinking fund bank account called “Holiday”. Every Monday (the day we get paid), $100 is automatically transferred to our “holiday” account. It’s set and forget. Plus, from time to time, if we have extra money come our way, I’ll transfer some into here to build it up faster.
This sinking fund has been running for years now, the balance ebbs and flows over the years, but with $100 going in every week, it continuously regrows. We drained it in January; its balance is already up to $700. Magic!
If you are good at math, you will have already worked out that over 52 weeks, I’ll contribute $5,200 plus whatever else I can spare. This is both a lot and nowhere near enough. The cost of travel has shot up in the last few years. But it is a cracking start and an amount I can commit to saving each week while still paying all our other expenses and investments. So, once we have a holiday firmly in our sights, I’ll add as much extra money to this account as possible.
In early 2022 we started to firm up plans for a January 2023 holiday. Yes, we would love to be more spontaneous and holiday on a whim, but with our daughter in school and our need to still work, even if it is only two days a week now, we still have many commitments that impact our spontaneity.
It’s a shame that we can’t be as spontaneous anymore, but on the positive side, it gives us a lot of time to plan and save.
Jonny is the super researcher in our whānau, and we had settled on taking our first-ever cruise. We were always quite sceptical, but enough people we know raved about it for us to decide not to mock it until we tried it.
Create a rough estimate
The first step was to roughly work out what it might cost us for:
Flights from Queenstown to Brisbane
A seven-night Royal Caribbean cruise
Travel Insurance
Accommodation before and after our cruise
Extra activities throughout the holiday
New passports, rental car, insurance, and spending money
An additional cash buffer for the unexpected
Jonny’s initial estimate was $10,000.
Once I had gotten over the SHOCK of $10,000 being an enormous sum to spend on an eleven-day trip to Australia, I began to get my head around saving this money.
We now had a solid figure to work to, and we were not just guessing what this holiday would cost us.
Saving up
Next, I looked at how much money we already had in our holiday account and how much we were short by. I then used one of the functions PocketSmith has to show me what our balance would be by our leaving date in January, given my current saving rate. I then set about saving a specific amount each week to compensate for the shortfall. This way, when we got on the plane, everything that could be paid for upfront was. And all of the money needed to cover the rest of the trip was already in our bank account.
My travel agent
With an itinerary sorted and money being steadily saved, it was just a matter of communicating with my travel agent, AKA Jonny, about when various things were due for payment.
For example, in July of 2022, Jonny applied for and received a new passport at the cost of $200. Soon after that, the cruise ship required a $300 deposit. A short time later, we paid $3,300 for our flights (I still can’t believe the price of flights to OZ!). Next, a deal came up for travel insurance, so we paid for that too. In August, it was time to renew our daughter's passport for $115. Then there was a lull of a few months, where no payments were due, and we could just squirrel money away into our holiday account. By October, the remaining balance was due on our cruise, plus we paid for some excursions. We finally booked hotels and rental cars, knowing we would not be charged until we used them.
We just worked as a team, with me working towards a $10,000 spend and him telling me when to expect money to leave our account. When something was due, he told me, and I made sure the payment would go through.
Our Prepaid holiday
By the end of October and with almost two months to go until we left, we had already paid for the following:
Passports: $314
Flights: $3,324
Cruise: $4166
Cruise excursions: $1263
Travel insurance: $126
Train to transfer to hotel: $35
TOTAL: $9,228
Estimate and reality collide
Given that we still had our hotel, extras onboard, rental car, parking, and shopping to pay, I knew our initial estimate of $10,000 was too light! Oops.
Where did we go wrong?
When we first came up with that figure, we didn’t factor in excursions on the ship costing so much or the fact we might want to go shopping. Travelling post covid is simply more expensive.
But that’s OK because we still had time to make up for the shortfall.
I would rather work out we didn’t have enough money before leaving than suffer the stress of running out of cash while on holiday. And it’s not just that; I’d hate to go to so much planning, effort and expense only NOT to be able to do something awesome because we didn’t have the money.
I just pulled some levers in our bank accounts to ensure I built up enough money for a holiday.
While we were away, we paid as we went for:
Rental car: $114
Hotel: $476
Airport Parking: $120
Extras on the ship: $442
Shopping: $1,900 😉
WE HAD AN AMAZING TIME
We drove one hour to Queenstown, got on a plane and instantly got into the holiday vibe. While we were away, we wined and dined, did touristy things, and did more shopping than we had planned, spending an additional $1,900.
Jonny and I usually don’t care for shopping, but when the urge strikes, we go with it.
We finally got to see what all the fuss was about regarding cruising. We absolutely loved it! It helped immensely that the ocean was like a millpond, and my biggest fear, seasickness, was nothing to worry about. Our biggest gripe was that more than seven nights aboard were needed!
Tidying up some loose ends
When we returned, the transactions from our time away kept trickling in, and I coded them all to “Holiday” in PocketSmith. This is why I can tell you - with 100% certainty - that we spent a total of $12,257 on our 11-day trip. That is $1,114 per day—a lot of money but an expense we have zero regrets about.
Could we have done it more cheaply? Yes. Did it bother us that ‘shopping’ was the reason we went over our original estimate? No. The whole trip was enjoyable, from start to finish. Money well spent.
I’m just happy that our ability to plan and pay attention to our money means that we can adjust for maximum enjoyment. While still paying for our regular living expenses.
A few helpful things to know
We only use a Debit Card and faced zero issues because of this. You don’t need a Credit Card to travel overseas.
We have travelled to many places over the years, and this was the very first time we visited another country and didn’t touch one bank note or coin; everything was electronic.
We always met our normal investment deadline of the 20th of the month. Planning and paying for a holiday is done in addition to normal spending. We would have pushed our holiday date out further if we didn’t have enough money to cover our regular expenses, including our commitment to monthly investing. The luxury of a holiday must not impact our other financial goals.
Taking a holiday is a wonderful addition to our current life, but is not done at the expense of our future lives.
I hope that by sharing my numbers, you are able to use them to help you save up for and enjoy a trip away with your family soon. I’ve never regretted the money spent on travel, but these days I still make sure we hit our other money goals at the same time. If you have a specific question about our trip, I’m more than happy to answer it in the comments section below or via email.
