How We’re Funding Our Anniversary Vacation

I recently mentioned that we’re going on a ten year anniversary vacation.  We’re all booked up for flights and our resort.  Since we’re staying at an all inclusive resorts, we are comfortable that we have most costs covered.  One thing with other trips is you get stuck with fees, meals, drinks, etc.  We already have that stuff covered.

But, still, we had to pay for it.  I don’t know about you, but we often fund things like this from several different sources.  That was really true with this trip.

Funding Our Anniversary Vacation

Here are the list of sources that we’re using to piece together the budget:

  • A portion of our 2016 tax refund.  We always put some toward travel, and this year we put some extra for this.
  • A portion of our annual vacation savings.  We fund our vacation savings fund throughout the year, and a little bit went to this trip for the year.
  • A portion of one of my two ‘extra’ paychecks.  We budget for two paychecks per month, but have two months where we get three.  This is often used for funding ‘special’ items and this occasion seemed fitting!
  • Reward money from four different cash back credit cards.  We have four cards that we use to maximize our category savings, and we cashed all four in to put a pile of money toward the trip.
  • Side hustle money from both me and my wife.  Extra money can often help fund some of the extras.  It seemed to fit perfectly.

The trip is going to be fun, though I am stressed as I’ve never flown international.  It’s nice to know that the money aspect won’t be causing too much stress if all goes well!

Readers, how do you fund your vacations?  Have you ever had a special occasion trip like this that you’ve saved for?  Let me know your experiences in the comments below.  Thanks for reading.

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

How To Calculate The Value Of An Annual Membership

Do you have an annual membership or pass to any local attractions?

Many families find annual memberships to be a great way to save money on favorite places or attractions.  They can be especially valuable for families.  We have young kids, so we have four different memberships that we take part in:

  • Detroit Zoo
  • The Henry Ford Museum
  • City Park  (for the beach)
  • Robot Garage

It’s a pretty well rounded group of attractions.  The first three are pretty self explanatory.  The last one is a local business that recently opened up that offers classes and drop-in opportunities where kids build with Lego, gears, wheels, pulleys, motors and all kinds of other nifty materials to create things that walk, roll, open, close and other cool things.

First Questions To Ask

Figuring out whether to buy a membership is a multi-step process that involves asking a series of questions.

  1. Did you like the attraction?
  2. Do you see yourself or your family liking it as much after a few more visits?
  3. Do you have time to fit this into your schedule?
  4. Can you commit to going at least as many times as it takes to get to the break even point?
  5. What is the break even point?

Making sure that the answers to the first four questions are all YES is very important, understanding that you might not know the exact answer to #4 without knowing #5.  Still, the first three questions will largely get you there.

But, say you do answer yes, and you want to know what your break even point is. That’s the important question of the day from a financial perspective.

Calculating The Break Even Point

The number you are looking for is the number of visits at which you need to hit to reach your break even point.

You’ll need to:

  • Calculate the cost per individual visit
  • Get the cost of the annual membership

Divide the annual cost by the individual cost and this will give you the break even point as far as the number of visits that you need to exceed for the membership to ‘pay for itself.’  When the number comes out as a fraction, you round up to the nearest whole number.  That’s the simple method and it works for most cases.

Sometimes, it gets a little more complicated, as you’ll see with our examples below.

Detroit Zoo

Per Visit Cost:mb-twenty-201308
2 Adults @ $14 each: $28
2 Kids $ $10 each: $20
Parking: $5
Total: $53

Family Membership Cost: $79

In this case, $79 / $53 = 1.5
Round up, and you see that it takes 2 visits to break even.

We go at least 10-15 times per year so this is well worth it.

The Henry Ford:

Per Visit Cost:
2 Adults @ $21 each: $42
2 Kids @ $15.75 each: $31.50
Parking: $6
Total: $79.50

Family Membership Cost: $160

In this case, $160/$79.50 =2.0
We don’t need to round up, so the number of visits to break even is 2.  

We go here at least 6 times per year, so we’re more than happy to renew this.

City Park Membership (Beach)

Per Visit Cost (car entry fee): $6

Annual Pass: $30

This one is a very simple calculation in that we have to go 5 times to break even.

In all the years we’ve gone, every year but one we’ve gone at least or more times, and I think one year we missed it by one visit (it was a chilly summer and also right after one of our kids was born, if memory serves), but typically we meet this one without a problem.

Robot Garage

This one is a little more tricky because the benefits come in a couple of different areas.

Per Cost Visit Drop-In Play: $8 
Class Discounts:$11
Camp Discounts: $8

Annual Membership: $99

In this case, we have to estimate three different areas:

We take our kids around six times per year, meaning that we get $96 worth of drop-in visits.  Wow, we’re almost there!

Our son typically goes to 2 classes per year, and while the $11 per class is an estimated savings, the $22 is enough to definitely push us over the edge.

We also sent our son to a week long ‘camp’ and members get a small discount (note: it’s actually listed as more, but since they offer an early bird special to non-members only, the net benefit is what I list): $8

So, for the $99 membership, we offset with a savings of  around $126.

Not great, but we do calculate that we’re at least breaking even.

Using Numbers To Make Decisions On Each Annual Membership.

With the information we have above, we can see exactly how we’re doing.  Putting together this analysis is easy and it’s also something you should do regularly.  You can use it not only to estimate up front if you think you’ll get value from the membership, but to see if you’re actually using it when it’s time to renew.

Say you loved the beach the one time you went and had every intention of going a whole bunch…on the day you signed up.  But, when you came back at the end of the year, you realized that you only went twice.  You’d know that renewing might not be your best option moving forward.

Annual memberships can be a great way to save money and create lots of great experiences for you and your family to enjoy.  Understanding just how they fit into your budget and how spending money can save you money in the long run is great knowledge to have.

Readers, do you have any annual memberships?  Do you sit down and do a cost benefit analysis to ensure that you’re ‘making back’ the cost of the actual membership?  

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

What Might We Do With Our Extra Money?

Looking at our money and our budget, there are a few things that have changed over the recent months, and it will require some change in planning on how we approach our money.  One of the things we’ll have to look at it how we allocate extra money.

Where Is This Money Coming From?

Everybody will define this differently, but for us the extra money boils down to a few different areas.

  • Credit card rewards. Most of our spending is done on cash back rewards.  As such, we’ll have a few mb-201312billscoinshundred dollars in rewards after cashing in all of our rewards.
  • Tax refund. Last year we had to pay on our 2014 taxes.  This was largely because of a few things: I switched employers and our witholding didn’t cover us as well as I’d anticipated due to some changes in insurance coverages and such. We also realized some stock gains, and also cashed in some savings bonds that had fully matured.  In 2015, we should get a refund, as our withholding was adjusted, we didn’t do so great in the markets, and didn’t cash in any rewards. Our taxes are still out to our CPA, but a back-of-the-envelope estimate shows that we should get a couple of thousand dollars.
  • My wife’s side hustle. My wife runs a really cool shop on Etsy where she designs custom invites, thank yous, wall arts, and similar products.  Up until recently, pretty much everything went to funding our recent Disney World trip.
  • Pet expenses. Our cat recently passed.  We are going to give ourselves some time before even considering whether to get another pet.  Still, this will help our budget as his food, vet, and medicine bills were not cheap.

So, these are the four areas that we see working in our favor in terms of cash flow.  Some are one-time things and others will be more ongoing.

So, what to do? What to do?

A Couple of Needs, Some Wants, and Looking Toward The Future

Honestly, there are a few things that we will probably do with the money.  Not all of it is flashy, but it’s all (OK, mostly) helping us strive toward goals like saving for retirement, saving for big purchases, and being able to do enjoyable things without taking on debt.

Here are a few ideas about our extra money.  The splurge type stuff first:

  • New wireless router. Typically our credit card rewards money has funded our purchase of new electronics .  We’ve purchased all of our TVs with new flat screens by using credit card rewards.  Along these lines, we’re looking for a new wireless router.  The one we have now is at least 7 years old, doesn’t provide the latest security, and the coverage kind of stinks compared to what’s available today.
  • Vacations. Even though we aren’t piling as much into our travel fund as we did to fund our Disney trip, we’d still like to take a family trip every couple of years.  We liked Florida and have never taken our kids to the beach, and so we’re considering saving a smaller portion of my wife’s business toward a trip to the Tampa / St. John’s Pass area.
  • Other travel. We do most of our traveling with our RV.  Every couple of years, my wife and I like to consider a small anniversary trip in the fall.  These aren’t extravagant or largely expensive, but stashing a few hundred bucks goes a long way.
  • Entertainment. We both used to be pretty frequent concert-goers but kind of stopped once we had the family.  We have done a few concerts and really enjoyed it, so we’ve decided to try to do 1-2 concerts per year.  Putting some money toward a specialized entertainment fund is a good goal that will let us buy tickets and a night out without guilt.
  • Furnace Fund. Last year we found that our furnace is starting to fail. We’ve taken some measures to slow this and are very carefully monitoring the device.  Eventually it will have to be replaced.  Continuing to save for this or other big purchases that might come up is important to us.
  • Retirement.  Bumping retirement contributions is never a bad idea.
  • Kids Activitie. We set aside money for some of the big things that our kids like to do.  Summer camps, swim lessons, dance lessons, etc.
  • Replacement Car / RV. We are proud that our two cars and our RV are from model years 2006, 2007, and 2004 respectively. However, the bottom line is that eventually they may hit the end of their useful life.  We save for this and could likely replace one without having to take on a loan.  With all three at that age, it could be that more than one would need to be looked at in a shorter period of time.  We will definitely be upping the allocation here.  We don’t want something to leave us unprepared.

So, that’s really about it.

Readers, I’m curious what you think of our plans for extra money?  Have you had any favorable (or unfavorable) budget changes over the past months? How have you worked to incorporate them into your spending plans?

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Why And How We Create A Christmas Budget

It’s that time of year, and shopping is already underway in earnest.

I’m sure that many of you have gotten started with your shopping, and many will also be waiting until the last minute.  I generally fall somewhere in between that spectrum.

I thought I’d take a little time to explain how we set and track our Christmas budget, and I’d love to see how it compares to yours.

History As Our Guide

We have one big spreadsheet that I’ve used for years to track various aspects of our personal finance, from a spending ledger to budgets for big items to investment gains and losses, and yes, a Christmas budget.

This is great because I can track prior years spending and set that as a starting point for this years budget.

mb-2015-11-christmas01This allows me to start off with:

  • Who we bought gifts for in the past
  • What we budgeted for gifts for each of them
  • What we actually spent on each person

These are two big pieces of information that, in reality, gets us most of the way there.  All I need to do is list out any changes in the list of individuals that we need to buy for, then look at the amounts to see what needs to change.

In some cases, we might have gone over, so I’ll look at why we went over and determine if that needs to be the base amount, or maybe it was just a one-time thing.

Adjustments Based On Availability

After I’m done coming with adjustments, I compare it to our total budget amount.

See, we save for Christmas shopping all year.  We earmark a fixed amount per month that sits in our account, and is allocated just for gifts.  We essentially take 8.3333% (or one-twelfth) of what we estimate we’ll spend, and set it aside.  Then, when it’s all said and done, we’re fully funded for Christmas shopping.  No worries about how we’ll pay for the credit card bills come January!

Usually the total amount is pretty close to what we budget, so not much tweaking is necessary, though there’s usually some back and forth between my wife and I on how to make sure everything is covered.

Tracking, Tracking, and Tracking

The difficult part I have is tracking the spending.  I can easily track what I spend, but as my wife does a majority of the shopping, and she’ll do it in big chunks at a time (usually 2 or 3 shopping days in total), I have to then work with her to try to make sense of all the charges and get a breakdown.  So, she might go to Marshall’s and spend $250, but if $80 is for her parents, $45 for our son, $75 for our daughter, and $50 for her sister, it gets difficult, though not impossible to track.

It gets even more complicated when she buys gifts for me.  She usually identifies one rarely used credit card and will put my purchases on that.   I have to ‘go dark’ on being able to track the card activity until Christmas arrives.  Inevitably, she’ll also buy stuff for other people in the same transactions, which then complicates it for me.  At that point, I don’t really know the remaining budget.  We then have to do manual exchanges of information.  This sounds easy enough but taking the automation away is really confusing, especially around the holidays!

Argh!  And, yes, I know, that means I track things a bit too precisely for my own good 🙂  But I’m good with that.

In the end, we sometimes go over a bit and sometimes come under on our total amount.  There is a little cushion built into our total monthly budget, so the difference is absorbed easily.

How Do You Budget?

Readers, I’d love to if and how you budget.  Are there any big similarities or differences to the strategies that we use?  I’m always open to making things easier!

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.