Unexcused Absences

This is the second in our ongoing analysis of how we actually made this year happen. View the first installment where Heather offers several strategies (automate, digitize, backup, and eliminate) to free up time so you can pursue your hobbies and/or travel. In this installment I’ll show how you can free up $750 a month with very little effort or pain.

Freeing Up Extra Money

In my not-so-humble opinion, it’s the repetitive, small and medium expenses that conspire to deprive most of us of an adequate travel budget. The biggest culprit, in my book, is the cable TV bill. Most people in our demographic spend ~$125 a month with the cable company. That’s $1500 a year, or two round-trip airline tickets to Hawaii (at least in the off-season)! Now I like SportsCenter as much as the next guy, but if it’s a choice between watching Chris Berman do his schtick or a yearly trip to the islands, well, I’ll choose the tropics (plus, you can always catch highlights on YouTube). We have never subscribed to cable, which means that since we’ve been married we’ve saved (by not spending in the first place) close to $15,000. That’s a nice spot of change no matter how you slice it. Don’t get me wrong, I’m not a complete shut-in, I treat myself to the Masters and US Open every year by breaking out the rabbit ears on my old tube television. But for the most part, I find it quite easy to simply ignore the happenings on cable and broadcast TV.

Another big ticket item, when all added up, is the morning Starbucks and daily lunch during the work week. If you figure you’re spending $15 per work day on breakfast and lunch ($11 lunch and $4 coffee), that’s $3,750 per year. On the other hand, a sandwich made at home, or some leftovers, costs less than $2 per day. Let’s say you make your own coffee every morning, and agree to only eat out 2 days a week for lunch. You’re now spending $1,500 per year on lunches out, ~$65 per year on coffee (assume $0.25 per day), and another $265 on lunches at your desk ($1.75 x 3 days per week x 50 weeks). You’ve saved close to $2,000 per year.

Other optional expenses are Gym Membership (just buy some running shoes and go jogging to save $50/month or $600 per year), a fancier cellphone plan than you need (most people can lop $20 per month, or $240 per year, off their bill), and the daily trip to the vending machine for your afternoon snack ($1.50 per work day or $375 per year). Dinners on the town are literally 4 to 5 times the cost of a comparable home-cooked meal. Grilled USDA Prime (not Choice) steak ($20 for two), a nice bottle of wine ($18), and side dishes and desert (another $7) can be done at home for $45, vs. north of $200 for two at Charlie Palmer’s (including tax, tip, etc.). Many folks go out 3 and 4 times a week. We try to ration ourselves to once per week, or once every other if we go to a fancy place. Back when we had real jobs (and real income), we were spending easily $10k per year on dining. Now we spend no more than $2,500 per year, and still enjoy a really nice local ethnic restaurant every week. Let’s be conservative and assume we’ve freed up $4.5k per year on dining.

To sum the annual savings:

• Cable TV: $1,500
• Lunches and morning coffee: $2,000
• Gym membership, cellphone, and vending machine: ~$1,200 per year

So far, the total savings is $4,700, or almost $400 per month, and we haven’t even included dining yet.

• Dining out: $4,500

The grand total savings works out to a little over $760 per month!

A final note on this topic, the best entertainment value, by far, is Netflix. For less than $10 per month, you get the DVD of your choice in the mail about every three days, plus the ability to watch unlimited streaming content. So throw away cable TV, and some discretionary purchases as outlined above, and then spring for Netflix, and you’ll still be saving $750 per month, or $9,000 per year!

Stretching The Travel Dollar

Although it’s obvious, it bears mentioning that low- or mid-season rates on hotels and airfare can easily be half the rates in place during high season. Plus, the crowds are thinner, stores and restaurants can give you more personal service, and locals you encounter won’t be so stressed by the hordes that descend during peak travel periods. Wherever you’re going, give some consideration to the off-seasons.

There are other considerations as well; for example, many people think that winter is a great time to go to Hawaii, but the weather is by far the worst of the year from about Thanksgiving through February. When I was there, one February we had two weeks (!) of solid rain. Another year, not long ago, it rained almost every day for 35 days during winter. Imagine showing up for your dream Hawaii vacation and encountering dreary weather. Conversely, the least likely months most people consider for traveling to Hawaii, August and September, have the finest weather, lowest crowds, and great deals on lodging and activities.

How We Spend Our Travel Budget

Ok, here are the meat-and-potatoes on the cost of our vacation lifestyle. We have three favorite types of trips; sailboat charters in the tropics, skiing in the Rockies, and canal boating in Europe.

Sailboat Charters

By traveling in the mid-season (low-season for sailboat charter typically means terrible weather), and looking for promotions, we almost always get the cost of our sailing trips down to between $80 and $100 per person per day (call it $1800 per couple for a 10-day trip) for 5 to 8 people on a sailboat. Airfare from the east coast to the Caribbean runs around $500, and food and miscellaneous expenses usually run around $300 per person. Add in $100 for misc items and our typical sailing adventure costs the two of us $3,500 for a 10-day trip.

Skiing

On a ski trip it’s especially important to travel outside of Christmas/New Years, President’s Weekend, and Spring Break seasons, because the intent is to ski, not stand in liftlines and wait to be seated at restaurants. Off-peak airfare from the east to Denver or Salt Lake City runs around $300. Lodging can be had for $75 per person per night, and lift tickets average another $85 per person per day. We prefer to take shorter trips for skiing because frankly, our east-coast legs simply aren’t up to the task of skiing a big mountain more than 4 or 5 days in a row. Throw in a rental car for $300, and another $500 for meals, and the total cost of a 5 day ski trip comes to around $2,200. We can easily keep the cost under $2k if we get a condo and cook for ourselves. If we do away with the rental car and take public transportation (a great option around both Vail/Beaver Creek and Salt Lake City), the cost is more like $1,600 for the five days.

Canal Boating

Believe it or not, a one week visit to the canals of France doesn’t break the bank, especially compared to a mid-range Caribbean cruise, or a week at a resort like Hyatt or Westin with their overpriced restaurants and outrageous activity fees. Airfare from DC to France runs about $900 each (again, mid-season). Rail transport to and from the boat can be had for ~$50 per person. The boat, fuel and insurance will be about $1,500 per couple. Call the grocery (mostly wine and cheese!) and restaurant bill for the week $400. That is it! There is no other expense, since the boat is your lodging and local transport all rolled into one. Total cost for the two of us is $3,900 for the week.

The Grand Total

If you’ve been keeping track as we go along, you’ll see that $3.5k + $1.6k + $3.9k totals $9,000, which is suspiciously close to the savings we identified in the first part of this post. So you tell me, is over three weeks of fantastic vacations per year worth the sacrifices outlined in section 1? With apologies to any Minnesotans out there, “you betcha!”

There are many other strategies we use to really chip away at travel expenses; we house-sit for people in fun locations, we extend our time on the ground in far away destinations to get more bang for our airfare buck, we stay with friends, and we sometimes get lucky. The main point of this post is to hopefully show how to trade mundane, everyday expenses for travel that will make your friends and co-workers just shy of exceedingly jealous!

Ahead to Part 3 – Lifestyle and Financial Decisions, or back to Part 1 – Fighting the Tyrany of the Ordinary