Ensure you take the time for vacations, and at the same time, maybe even improve yourself financially in the process!

• Setting aside some extra money (02:19)
• Potential place to save: A separate bank account (02:40)
• Potential place to save: General investment account (03:00)

Quote for the episode: "Segmenting your vacation specific money can give you a much higher likelihood of having and taking that vacation you otherwise would not have taken."

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Welcome to the Enjoy More 30s: Family Finance

podcast, the only podcast dedicated to making life more

enjoyable for young families by hitting on the financial topics

that tend to weigh on us, stress us out and distract our focus

from simply enjoying life.

Hello, and welcome to the second episode now in the

"Your Money Multiplier" series. Today's episode is titled, "Live

It Up! Vacation Accounts". And today what we're going to cover

is what you need to know about setting up a vacation account,

and what you can do to actually get the most out of it at the

same time.

My grandfather, Grandpa Joe, was known as being really organized

when it came to money. If he was born in a different time,

outside of the depression when most kids went to college, he

would have been an accountant or something of that sort. That was

always kind of his dream to be an accountant. One of the things

he did with his money is using what some people refer to as an

envelope system- he would break his cash paycheck into different

envelopes. So maybe there was a grocery envelope, a rent

envelope, an electric envelope and you know, that kind of

thing. By segmenting his money in this way, it kept it better

organized to make sure he had enough money for each of the

various expenses that he incurred every month. Now, this

kind of a system has actually been around for a while, and so

you may have actually heard about it before. But it is

incredibly effective both practically and emotionally. If

the grocery envelope is low, you're eating on the cheap that

day.

What you need to know is that this kind of a mindset,

especially the emotional part of it, can also work outside of

normal bills- it can work for fun things like vacation goals.

If you calculate what a normal vacation generally costs, you

can break it down and set 1/12 of that aside every month, which

can help ensure that you're able to take that vacation every

year. Coming up with a couple $1,000, say $2,000-$3,000

whatever it might be, all at once, could catch you off guard,

could be difficult if you don't plan for it. If you put just a

little piece of that aside though every month into a

separate account, there's a much, much better chance that

you're going to reach that goal and be able to vacation, which

you know is kind of a big deal. We want to make sure that we're

enjoying life. Again, the whole point of all of this is to make

life more enjoyable.

So what can you do? Or maybe more appropriately, how should

you go about doing that? Now let's say that your typical

vacation costs $2,000-$3,000. Now, obviously, there's a lot of

variety here for where you are at and what you'd like to do.

But this example breaks down to, roughly, let's say $200 a month

or so. Now this can be allocated into one of two places for this

vacation account goal. The first is just a separate bank account.

It's easy, manageable, and now you've made sure that you're

setting aside some extra money, to make sure that you're

enjoying life, that you otherwise would not have or may

not have. The second option, though, can be a bit more

interesting. This option involves that general investment

account. So if you go to the second episode overall, in the

first series, "Like Super Gymnast Flexible", it's a

non-retirement, fully accessible account that sits between your

bank accounts and longer term retirement accounts. It'd be the

same $200 a month, automated transfers the bank scenario, but

now it feels a little bit farther away. Investment

accounts have your names on them just like a bank account does,

but when it's an investment account, people feel like it's a

little bit more removed from their direct control- a little

bit further away from how they would jump in and touch it. So

in the bank account scenario, even if you have extra money in

your regular bank account, let's say, that built up during the

year, you are very, very likely to still hit up that vacation

account because it's so easy and accessible to do- it's right

next to the other bank account that you have for your normal

checking. And there's nothing wrong with that at all, because

that is what it was there for. However, if you put into that

general investment account the money instead, and you have

enough extra money built up in your bank account during the

year to cover the vacation anyway, you are more likely to

just use that excess in the bank. So now the result of that

is that an extra $2,000-$3,000 that is invested, that would not

otherwise have been invested. So in either scenario, you're

taking the same vacation. But in the second scenario, there is a

greater possibility of having additional savings that are

invested for you long term towards your other goals, that

are building up possibly in the process. This means even more

money maybe for future vacations, more quickly getting

to retirement or education goals that you might have. Basically

you put yourself in a position to potentially give more money

to yourself.

So a quick recap for today. First is that segmenting your

vacation specific money can give you a much higher likelihood of

having and taking that vacation you otherwise would not have

taken. And really, that's the most important overriding point

of this whole episode- taking more vacations. The second is

that you have different places that you can save this into

very easy, very straightforward.

While if you have a general investment account that is

already built up to some degree, saving the funds here could

potentially lead you to saving more money than you otherwise

would have if vacation money builds up elsewhere. If you kind

of think about it right now, if you're not doing a monthly

savings plan for vacations, which most people are not, you

still probably take vacations a good amount of the time. Maybe

there's some years where it's a little tight and you couldn't,

but most years you probably take them anyway. So if you segment

the money out to the investment account instead of the separate

bank account, you still definitely have the money there

if you need to have it to pull from for vacations. However, if

you have enough money built up in the bank account on the side

now, you may not even have to touch it. And now you're

building up more for your future where you otherwise would not

have put yourself in that position to have that positive

side effect.

Thank you so much for tuning in today. Remember, we do also have

the new 'ask Joe' section on the show's website- enjoy more 30s

.com, that's enjoy more three zero s .com, as a lot of these

topics can be a little bit confusing. If you have more

questions that pertain to your specific situation, please don't

hesitate to reach out. Additionally, as I always say

every week, if you enjoyed this episode, please make sure to

subscribe and review us on Apple podcasts or wherever you listen.

There are literally millions of young American families out

there I'm trying to reach and help just like you. Clicking a

star, leaving a review, subscribing makes us come up

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and hopefully improve their lives in the process. The next

upcoming episode that we have is called, "Just Get An Umbrella

Policy Already". It will cover an extremely cost effective,

powerful tool to better protect you which despite this, people

many times still don't have. So as always, it's been great

talking with you today and I look forward to connecting again

soon.

The conversations on this show are

Joe's opinions and provided for general information purposes

only. They do not constitute accounting, legal tax or other

professional advice for your specific situation. You should

always seek appropriate advice from a financial advisor,

accountant, lawyer or other professional before acting upon

any content or information found here first. Joe is affiliated

with New Horizons Wealth Management LLC, a branch office

of TFS securities Inc and TFS advisory services and sec

registered investment advisor member FINRA/SIPC.