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My wife Suzie and I have been travelling around the Iberian peninsula for three weeks now, moving between hotels as we go. Last night, over a brandy nightcap, she asked whether the one in my hand was cheaper or pricier than the ones we’d had at our previous two stops. I had no idea. Worse, I couldn’t even tell her what this one cost.
That’s not like me. I’m normally frugal to a fault, so not knowing the price of a drink I’m actively holding is close to a personality violation. But things change when we’re on an extended trip: I willingly cross over to the spendthrift dark side.
It’s taken years to get here. In our younger travelling days, I’d spend whole vacations adding receipts in my head, running a private tally of every dime spent, and in the process, draining a fair amount of the fun out of the holiday. I also went through a phase of insisting a bottle of €4 brandy tasted exactly like a €40 one, and mostly convincing myself.
I broke the habit eventually, thanks to a tip from someone with the same affliction: preallocate the vacation budget and mentally treat it as already spent. Simple. Almost embarrassingly obvious. But it worked.
These days, the money is gone the moment we book the flights, at least in my head. Whatever we spend on brandy, tapas, or one more museum ticket isn’t a new expense, it’s just the pre-spent budget catching up with reality. The math still happens in the back of my mind, but I’m able to ignore it now.
Suzie, for her part, still finds this transformation amusing. She’s married to a man who still has the suit from their wedding 37 years ago, yet now watches that same guy order a second brandy without so much as a glance at the menu price. She likes to test the boundaries occasionally, asking questions like last night’s, just to see if the old vigilance resurfaces. So far, it hasn’t.
If there’s a lesson in all this, it’s that frugality and enjoyment don’t have to share a body at the same time. I’m still frugal, just not while I’m on vacation. The accounting happens before the trip, not during it, and the whole holiday runs better for it.
So I’ll ask you the same thing Suzie asks me: have you ever caught yourself mid-spend, unable to say what something cost, and did it feel like failure or freedom?
Great story. We’ve always been frugal when it comes to everyday things, such as groceries. Why pay over $5 a gallon of milk when Costco or BJs sells it for under $3. But not on bigger important things, like helping the kids buy a home, going on vacation, or buying something where quality is important. As one commenter mentioned they did, we’ve already prepaid a 12 day trip the end of November/early December to Italy, Zurich and Germany to see their holiday celebrations. Booked first class flights for us and my son and his spouse. Train tickets (one from Milan to Zurich through the Alps) and certain events are already paid for. So it appears frugality and spending can exist.
A Milan to Zurich train through the Alps sounds awesome! Does it ever get shutdown during winter months? Or is the train system set up for all weather in that region?
The train from Milan to Zurich is a beautiful, scenic journey — though my first time was a big disappointment. I hadn’t realised there were two different routes, and I mistakenly booked the one that goes through the tunnel under the Alps. A few years later, I made sure to book the right one!
This article really hit home for me. We’ve been retired since 2013 and started off somewhat “frugal” as well. My wife got cancer (twice) in 2016 and 2017 but recovered. This was the first wake up call for me. When we were able to travel again in 2019, that frugality disappeared (within reason).
However, I realized that it was mostly while we traveled. I had not realized that until I just read this article. We have always enjoyed traveling but the “getting to the destination” part was the challenging part (flying economy, for example). Now we fly first class and book suites on cruises. At the same time, I think it is funny that I still peruse the menu and may shy away from a dish that costs $3 more or that I will drive out of my way to save $0.05 on a gallon of gas (does anyone else get that paranoid on gas prices). On the other hand, I feel no remorse spending $1,000 on an excursion to Iguazu Falls.
Another factor has recently entered my thought process. Now that we are in our mid-to-late 70s, it is apparent that our go-go years will be waning at some point and traveling will lose more of its appeal (as walking up 300 steps to reach the castle or shrine entrance might entail). One way I have mentally “justified” spending more is to say to myself “this is the last trip will be taking.” The reality has been that I’ve been mentally saying that since 2019, while taking typically three international trips per year since (avoiding 2020 and 2021 for Covid). We are booked through 2027, so far.
As far as spending limits, our RMDs are fully available for vacation, since we have sufficient income to cover all other expenses. As half our portfolio is in Roth, we have established twice our RMD as the upper end of our discretionary spending plan. This should allow us to spend while still enabling long-term growth.
Snak123, I’m with you on the gas price observation, although I don’t go out of my way to fill up. I’m more of an observer — as I drive around on my daily outings, I memorize the prices at the different stations in my local area, and when it’s time to pay the piper, I make sure I do it on a day I’m near the cheapest pumps.
Mark, does the Gas Buddy app work in Ireland? It posts the gas prices and maps them in the are you are currently driving in.
I’m a huge fan of Gas Buddy when travelling in the Western US. Large interstate and intercounty arbitrages possible. Plus decent mapping for finding Costcos etc when in cities.
David, not that particular app, but there are similar options out there. My hometown isn’t very large — there are at most ten gas stations within my normal travel area — so it doesn’t take much effort to track prices the old-fashioned way.
Great article Mark. It appears I am a lot like you. I finally feel it is OK to SPEND, especially when on vacation. Otherwise it was always the minimal choice, I had to learn to spend, very unnatural for me. At 80 I finally learned it is OK.
William, frugality is certainly a hard mindset to break… at least you got there eventually.
I’m always looking for ways to rationalize all the spending that happens on a vacation, and these comments have given me a few more great ways to do so (love the “second brandy freedom” rule and the .01% rule).
Here’s one of my rationalizations–I’m saving $X amount by managing my own money and no longer paying a financial advisor an assets-under-management (AUM) fee. Perhaps that advisor might have made a lot more money for me over time, but I’ll never know that for sure. What I do know for sure is that my “no AUM /more bucks” rule helps justify my vacation spending!
Laura, I once used a similar argument with my wife in an effort to entice her away from her high-fee wealth manager.
Mark, I love the idea of mentally treating the vacation budget as already spent. For those of us who spent a lifetime watching what we spent, turning that habit off isn’t always easy.
I’ve reached much the same place with travel. We’ve already done the saving and planning, and once the trip begins, I don’t want to spend precious time worrying about the price of dinner, a drink, or an experience we may never have the opportunity to enjoy again.
Perhaps that’s one of the adjustments of retirement: learning that money isn’t only something to accumulate and protect. At some point, its purpose is also to buy experiences, memories and time with the people we love.
So I’d call that second brandy freedom. Enjoy it!
I totally agree Andrews. Once the plane’s wheels touch down at our destination it’s do whatever we want to do and the cost is what it is. We don’t give it one thought. We are truly blessed to be in this situation. Next week we are heading to the UK and have prepaid for flights, hotels, trains, and entrance fees. Those are the expensive components of vacation, and already paid for. After that it’s primarily food which usually involves a big breakfast at the hotel (more often the not included in the hotel bill already paid), a snack during the day, and then dinner. So the main cost when we arrive is just dinner.
Andrew, shifting into ‘spending mode’ is genuinely one of the hardest adjustments for people who’ve saved diligently their whole lives. Any strategy that makes it easier is worth trying.
I understand and applaud the notion of pre-setting a vacation budget and then not sweating it while in progress, but I’m in Hawaii right now. We’re now in a timeshare condo, so we can buy stuff from the store because we have a kitchen, but for the first two nights, we stayed at an upscale hotel (free night certificates from a credit card!). We went to the hotel store to buy a little something to sip on whilst playing cards before dinner, and holy cow. For one moderately nice bottle of California wine, they wanted $180! Needless to say, we did NOT buy it. When we moved to the condo, we went to the grocery store to stock up, and I found a bottle of California Chardonnay I like for $18. Now, we’re talking.
So yes, I do have my limits!
When Jonathan planned to move to Philadelphia, he reached out to me because it was my hometown. One of the things he grew to love was the plethora of BYO restaurants in the city and surrounding areas. Many are Italian, but there is a nice mix of other types, as well as a range of prices. We used to trade BYO recommendations. I miss that.
Dana, you’ve hit on one of my trigger points. Ordering wine at a hotel or restaurant genuinely aggravates me—knowing I could walk into a liquor store and get the same bottle for 80% less spoils the enjoyment. I’m a big fan of BYO restaurants.
I also have limits. I’ve been thinking I’d like to go to Chateau Frontenac in Quebec City for a while. I was thinking this might be the year. Then, I checked the price for River view room. It was about $2500 a night. That was a hard “no way.”
Mark – first of all, I’ve missed your posts. Glad you’re still here.
Second, my trip to Spain 3 years ago was an excellent introduction to the “house red” wine wherever I went. It was fabulous. I have no idea what it cost, but it was probably less than your brandy!
My brother n law who lived in Europe for nearly two decades told us the same thing when we visited Paris.
Jeff, I’m also a fan of Spanish wine—especially the prices. At the local supermarkets, you can find really good quality bottles for around $3, made by small local vineyards. I have no idea how they manage that quality at such a low price, but I’m not complaining!
Mark! I hope you’re both enjoying the heck out of your adventures. There has got to be some kind of scale at which your already spent trick no longer works. Can I trick myself to not fret over spending my retirement savings by considering it already spent the minute I earmarked those dollar amounts in ‘the plan’? I wish that would work but I know I am going still have a hard time when the paycheck stops.
Heidi, I suppose you could say I made the ultimate spending preallocation before I even retired — not a popular choice around here, but I purchased a ten-year term annuity. Now I don’t have to think about spending at all; the cash rolls in every month automatically, just like a paycheck.
You might try a monthly pre allocation trick. Give yourself a monthly budget for each of essentials, lifestyle choices and luxuries (or however you wish to demarcate them). Then don’t sweat it until you’re approaching the limit.
Thats what I do, and its worked for me.
I think it’ll be a while before I get to the stage of not checking what things cost. A lifetime of checking for the savvy option and an understanding that in many things the price/ quality ratio is far from fixed make for hard habits to break.
What I have been trying to relax more into is the 0.01% rule I read somewhere. That if a major purchase decision is less than that proportion of your total net worth don’t sweat the decision at all.
That’s from Nick Maggiuli I believe.
Yes Michael. From the Nick’s Wealth Ladder book (at least that’s where I read about it).
what you’re describing is a psychological phenomenon known as mental accounting — associated with economist Richard Thaler. When we have a major purchase like a vacation, car, house, etc., we tend to ignore small additional costs like the brandy. Our focus shifts from the actual price of the add on to its proportional cost in relation to the whole purchase.
Brandy in mid summer?? In Wisconsin, it’s the favored beverage for people ice fishing! I really don’t understand the need for prepaid spend, but splurging on vacations always happens. Our finances recover and the spending happens without guilt.
But I’m really interested in how you spent for the solar eclipse. At one point, you posted about an unexpected expense related to your hotel location. How did you handle tha? And I certainly hope you had air conditioning. Didn’t your stay in Spain coincide with a major heat wave?
Marilyn, we had a lot of changes and unexpected expenses. Extensive wildfires forced us to change our hotel for viewing the eclipse, and yes, air conditioning everywhere we stayed. The Spanish heat was awful—100 plus degrees in the daytime, overnight lows in the high 80s, plus constant, heavy humidity. We only stayed in Spain for five days before relocating to Portugal’s Atlantic coast, splitting time between Lisbon and Porto. The Atlantic breeze and cooler water made a huge difference. We’re fortunate to have had the resources to make that change. As for the brandy, I’m enough of an Irish savage to prefer it served over a full glass of ice—much to the visible horror of the local bar staff.
Mark,
I spent a week and a half in Portugal in May. Spent time in Lisbon and Porto and Braga (for a wedding). Fantastic time! Most time was spent in larger cities including 5 prepaid excursions. My wife and I definitely followed the “spend freely and enjoy the trip” mind set. Did you happen to visit the westernmost point on the European continent?
Andy, no, we didn’t get a chance to visit this time—I hear it’s lovely. On other trips, though, we’ve driven along parts of Portugal’s Atlantic coast, and it’s pretty spectacular.
Gotcha. Yes, the coast line is spectacular. I thought it was cool standing at that point on the continent. We had a memorable/fun lunch in a nearby beach town after visiting the point. Money well spent.
Thanks for the update. I was wondering how your trip was going as I read the reports coming out of Spain at the time of the eclipse. I suspect that Europe’s faster climate change is going to result in a shift in vacation planning. We’re considering a trip to Greece, but in April, I won’t even consider going in the summer.
A few years back, we visited the Greek island of Crete in July. We took a local bus (no air conditioning) to the Minoan ruins at Knossos, and it was so intensely hot walking around the site that people were passing out from heat exhaustion. With that in mind, I fully endorse your plan to visit Greece earlier in the summer.
Thanks for your article and tip about how to be less obsessed with spending while on vacation. I won’t share personal anecdotes about how excessive frugality has sometimes diminished the pleasure of being on vacation. But keeping track (I still record my spending and have my first journal from 1968) is a hard habit to break. However, you’ve inspired me to give your method a shot! Thanks again, Mark.
Linda,
If you have been frugal for that many decades, and money is really not an issue, and want to break the habit, maybe you could consider stoping the recording your spending. That may enable a reset. At this point I would be shocked if your habitual frugality after all these decades were not ingrained so you have nothing to worry about going forward.
Thanks, David and Mark. This summer included a weeklong “staycation” spent with my three adult children and three of the five grands. While they covered groceries, I treated for several restaurant meals and a day at a local theme park with the youngest. When the charges for the theme park arrived (admission, food, shopping), I was pretty surprised at the full tab because I hadn’t kept track. But I saw that everything was legit, so I shrugged and was glad for a day well spent. It’s a start, right? 😊
One little step at a time Linda!
Linda, a continuous journal since 1968 is legendary! Hard habits are tough to break, but if my experience is anything to go by, letting go just for the duration of a holiday is worth the effort.
It wasn’t deliberate on my part, still, we had a similar outcome for our recent cross country trip. In January we laid out our itinerary for the trip in May, we pre-paid for all the hotels and airfare home. All that was left to pay for in May was the cost of the rental car and the gas to get to California, and of course meals. Having the major expenses paid well in advance eliminated that damned mental calculator from ruining all the fun.
PS: It was too quiet around here without ya!
Dan, I’d be a bundle of nerves hiring a car for a cross-country trip like that. I’m always convinced the rental company is going to ping me for imaginary damage the second I hand the keys back! Quiet without me? I’m such a quiet, unassuming guy, I’m surprised anyone noticed I was gone…
Mark, about handing those rent-a-car keys back…. I forgot to do that. By the time Enterprise texted me, there wasn’t time for me to return the fob before our plane boarded. I acknowledged my error, apologized, and dropped the fob off immediately when we returned home. I fully expected to be charged for a tow and a new keyfob. Three months have now passed without any additional charges for my screw-up.
Consider this a shout out for Enterprise Car Rental.
Mark, what you describe is why i put money aside for what i call purpose money. These days purpose includes a summer at our Cape house for example. The money we will use for ourselves and entertaining family is isolated in a bank account and from that point forward, I don’t think about what I spend.
Sometimes that purpose money is just in my head. Once I convince myself money will be spent on one thing or another or a project, I don’t think about the costs any longer.
Richard, I’ve nodded along in agreement plenty of times when you’ve described your simple spending system. I’ll whisper this bit, though: it sure helps having that rock-solid fixed income to cover expenses without checking what the market is doing! 😉
As I have said several times, the key to (less stress) retirement is a steady income stream no matter how it is set up. Steady and hands off automatic monthly income.
I am fortunate mine is a pension, but there are other ways. The downside in my case is it has been eroded by inflation for over 16 years.
Yes, and when it comes to vacations we try to be somewhat conservative when booking flights and hotels, but definitely a class above what we spent when were saving for retirement. When we are on the trip now we don’t even look at prices of activities or restaurants.
One time we received a ticket for speeding (electronic monitoring) after arriving home post a two week trip to Italy. After confirming it was legitimate I just paid. My wife was surprised I was so calm. My response? I wasn’t going to get upset and let it affect my memory of a trip I had waited early my entire lifetime. I just chalked up to a travel expense.
BTW We unexpectedly decided to stay in a hotel for one night last weekend when celebrating my 50th high school reunion. We paid $99 plus tax at a Super 8 hotel, as in two weeks we leave for a two week trip to the UK where we are staying mostly in four star hotels.
This event displayed two lessons:
1) We (that means I) can still be frugal.
2) Boy are we blessed we can stay at pretty upscale accommodations when we are on a planned vacation, or as in the UK, holiday.
😁
Addendum: Just this week changed out all the smoke detectors in our house, corrected a foundation drainage problem, and fixed a faulty monitor on our home water treatment system during a phone consult. So I still am following my philosophy of not paying someone to do something I can do myself.
The lawn, that’s something that is getting close to a paying for a rider, or someone to perform.
“Suzie, for her part, still finds this transformation amusing. She’s married to a man who still has the suit from their wedding 37 years ago, yet now watches that same guy order a second brandy without so much as a glance at the menu price.”
Did you notice a ruffle under the tablecloth after you couldn’t answer? That was Suzie performing a not subtle enough fist pump.
David, you’re probably right about the fist pump from Suzie. On your hotel costs—having a vacation home in a popular tourist area, I’m always amazed how much people are prepared to pay to stay there. It does help make our vacation home feel like a great investment when the property tax and other bills roll around. Enjoy your upcoming UK trip—are you turning left or right for the flights?
Mark, that’s a good approach but in the interest of full financial disclosure (I’m on a couple of volunteer boards) you should eventually compare “actual” to budget and show variances for better financial oversight. However, if it is just your wife you are “answering “ to you might have a bit of leeway vs. a volunteer organization or an HOA community. lol
Luvtoride, I have very strict oversight: I tell myself it’s going to cost a lot. Then when I get home from vacation, I do some calculations that precisely confirm my original suspicion. Lol
Yes, all the time. Freedom.
This is especially true if we’re talking about something like your example. If I’m ordering a latte or a cocktail, I know the rough cost to expect, am not going to ask if it isn’t displayed, and am not going to shop down the street for a cheaper one.
For a more significant purchase I’ll give it more thought.
Michael, we all have an invisible spending tripwire that makes us look closer at the cost. Thankfully, I’ve raised the sensitivity of mine substantially.
I think it’s not just a number tripwire but a matter of context as well. While I treat a coffee or a cocktail as I described, send me to the grocery store and I pay attention to cost per unit weight 🙄
Michael, I’m just as bad. In fact, I’ve been known to open the calculator app on my phone to work out the best unit price lol
G’day Mark. Proud that the one and only suit in my wardrobe is the one I was married in 25 years ago. I’m glad it still fits me!
Sounds like you’ve had a wonderful trip.
Greg, fantastic trip—and the solar eclipse was surreal. My suit still fits too, but those Miami Vice–style padded shoulders on the jacket are a fashion crime to henus and make it unwearable. Though I’m forever hopeful it’ll come back into style so I can get a bit more mileage out of it.
Great to hear from you, Mark. Yes. Years ago, I bought a Turkish rug in Istanbul. I couldn’t tell you what it cost. I’ll say it felt like freedom because I liked the rug and could now politely tell all the subsequent rug salesmen who approached me on the streets that I’d already purchased one.
D.J., I’ve got one of those Turkish rugs in my sunroom—did they spin you the yarn (pun intended) that every handmade one has a deliberate flaw, since only God is perfect?
We did as well during a cruise from Greece to Turkey and the Greek isles. The rug was shipped home and now proudly lays under our dining table in our beach home. I don’t even remember what it cost but the haggling over the price was great fun at the time! lol 😂
Mark: excellent post! Sounds very much like my wife and me and some of the conversations we’ve had while vacationing. I particularly appreciated the comment: “preallocate the vacation budget and mentally treat it as already spent”! Gotta work on that approach for our future travels!
Dave, I’d definitely recommend giving it a try. It took away that friction I always used to feel around spending on vacation.