Money for the Rest of Us

I’ve been thinking lately that Personal Finance Bloggers must be control freaks. Who else would spend so much time thinking about money? Who else would bother to create elaborate budgets? Who else would meticulously count every cent they earn, spend, and save? Who else would not only do these things, but then write about them?

Yes, I think Personal Finance bloggers must be control freaks. I know that I’m a control freak. Once, I was talking to a pilot about how I don’t like flying and he said, “Well, you must like to be in control of things. Because I find that most people who don’t like flying don’t like it because they can’t control (or even see) what is going on.” I just laughed because it was so true. Better yet, it’s actually helped me be less afraid of flying because I know why I’m scared and I’m able to relinquish control of the situation.

Being a control freak when it comes to money can be both a good and bad thing. It’s good because it helps us to “keep control of our finances” and avoid spending too much. As control freaks we know where are money is going and how to keep it going to the “right” places. Generally, we control freaks have our finances figured out.

But, we also worry and think more about money than the average non-control freak. In doing this we spend less time doing and thinking about the things we care about.

Recently, someone very dear to me called me out on my control freak-ness when it comes to money. Something to the effect of “Who cares if we go $40 over our budget for dining out this month? We can afford it and it’s a special occasion. So why be cheap?” This really got me thinking. Is it worth it to be so concerned about money?

I’m in the fortunate enough position where if something tragic happened I would be able to manage for a few months. (And I’m sure, if it were that tragic, with the help of friends and family I could make do much longer than that.) So, why should I be so concerned about money? Isn’t it better to enjoy my todays, so long as it doesn’t dramatically impact my tomorrows?

This is the fifth post of the series “15 Tips for Cheap Travel.” You can navigate the rest of the series by going to the 15 Tips for Cheap Travel Index.

There are two times in your vacation/travel planning process that you should consider your budget. First, as mentioned in the post about decision making, you should think about it before you even begin to plan your trip. The broad question to consider here is: How much can I spend? That is, how much can I afford to spend and how much am I willing to spend? (You may be able to afford to spend $10,000 but only want to spend $1,000 or you may want to spend $10,000 but can only afford $1,000.)

The second time you should think about your travel budget is after you’ve researched how much your transportation and hotel should cost. It’s hard to create a vacation budget before you do any research on the cost of transportation and hotel because these are large expenses that vary greatly depending on the time of year, etc. So, once you have found the approximate cost of these two main expenses you can get into the nitty-gritty of your budget.

Here are some categories of expenses to consider when developing your travel budget:

1. Transportation– getting there and away; including taxi to the airport
2. Lodging
3. Food– don’t forget about drinks and snacks
4. Expenses before you go (new clothes, passport, traveler’s checks, etc.)
5. Miscellaneous Expenses once you’re there (ATM fees, money changing fees)
6. Transportation while you’re there (getting around via rented car or public transit)
7. Entertainment once you’re there (tours, museum entrance fees)
8. Expenses at home while you are gone (house/pet/baby sitting, etc)
9. Incidentals when you’re there (tips, phone charges, internet charges, etc)

When creating your budget be realistic. You are not going to be able to get by spending $10 a day on food if you plan on eating at a restaurant for every meal. And, you don’t want to have a crappy vacation because you haven’t budgeted any money to get into museums.

You can create your budget with just a simple piece of paper. Or you can design your own spreadsheet. I have designed a Travel Budget Spreadsheet that you can download here. (Note that all of the categories are listed per day/person except for two. At the top of the budget you list the number of days/nights you will be gone and the number of people going on the trip. You just fill in the rest of the numbers based on your estimated expenses per day per person. I’ve designed the spreadsheet to calculate the cost of the entire trip, the cost of the trip/day, the cost of the trip/person, and the cost of the trip/person/day.)

Creating a budget for your trip may not be the most exciting thing in the world; but it’s just as important as creating a budget for your everyday life. If if you find that the estimated cost of your trip will be more than you can afford, try to come up with some other options, maybe take a trip closer to home, or think of ways you can eat more cheaply. No matter what: Don’t spend more than you can afford on a vacation. There’s no point ruining your vacation worrying about money or ruining the memory of it by having to pay it off in years to come.

I have already written about how to save money on some of the expenses listed above including how to save on Transportation and Lodging . In future posts in this series I will give ideas on how to save on other expenses.

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I have recently started using Google Documents and Spreadsheets to manage my budget. If you haven’t heard of Google’s Docs and Spreadsheets here’s the lowdown: With Documents and Spreadsheets you can upload, create, or email yourself a document or spreadsheet and it will be saved online allowing you to access it from any computer (provided that you have a Google Account). I have found that managing, completing (and sticking to) my budget has been much easier using this method than any other method I’ve used in the past. Here’s why:

1. You can view your budget from any computer. Having your budget available online allows you to check to see if a purchase is reasonable for that month. (For example, at the end of February I was debating whether or not to go to an expensive dinner with a friend. I wanted to go, but I didn’t want to blow my budget. So, I quickly logged in to my spreadsheet and there I had it!- I knew I had enough funds to go.)
2. You can update your budget from any computer. You can continually update your budget and having it available online allows you to quickly go in and add an expense from wherever you are. I keep a running total of my expenses by category and log into my budget a few times a week to insert these expenses.
3. You can share it with others. Having you budget on Google Spreadsheets allows you to share it with your spouse/significant other/partner (or anyone else you might like to share your budget with).

If you still haven’t set up a budget or don’t have one in Excel, there are two excellent spreadsheets that that you can download at I Will Teach You to be Rich. (There are two links in the middle of the post). I tested both and if you download either one to your computer and then upload it to Google Spreadsheets the equations remain intact.

Quite honestly, I have never really been able to keep up a budget before because I find it hard to sit down at the end of the month and add up all of my expenses (and I never really liked Quicken or Money). Adding expenses as I accrue them into my Google Spreadsheets budget is easy, fast, and unlike other online software programs (like Mvelopes) it’s free!

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