How do you decide whether a big spend is OK?

racing_blue

Kind of a budgeting question.

I would love to take my family skiing this winter, in the Alps or in the USA. It would be very expensive I expect.

I'm struggling to decide if we can afford it. On one hand the cash is there so I could click "buy". On the other hand we have all sorts of future expenses to think about such as university expenses, mortgage payments, replacing cars when necessary, house improvements... some of these several years away.

How do you decide in a situation like this?

mgdavid

<warning - huge generalisation>
It's more a lifestyle than a decision made at the time I think; the sensible plan long-term for most of the things you mention and only indulge if there's still money left over whereas the !!!!less just spend it with hardly a thought.

coolasacucumber

Would you be left over with much in savings if you went?


If yes, and you're able to replace that amount gradually, each month etc, it would seem an easier decision.


If it would empty your savings, and you'd struggle to replace them, I'd urge caution... And a week in the Cairngorms, or the Alps at a push!

HHarry

Blue,

Exactly as the others have said. If you can afford it without decimating your savings, and can afford to put money back in the savings pot in the future then don't hesitate!

I can say this as I currently sit in the lounge at LAX airport, having spent a fortune on Business class seats for my wife and I. Were there more sensible things I could have done with the money? Definately. But this was about treating ourselves and creating memories, and sometimes 'sensible' isn't the best way.

And I can highly recommend a family ski trip - you'll have a great time. The USA will be really expensive (lift passes cost a fortune), go for Europe. Our favourite destination is Mayrhofen un Austria. Mid March can be nice, if the sun's out you can ski in a t-shirt!

NotRichAtAll

Yolo........You only live once, go on holiday and enjoy the time you will spend with your family and the smiles you will bring to their faces.

kidmugsy

Pretend that the cost was added to your mortgage, then work out what the total interest payment will be over the years. Sobering!

On the other hand, are you sure you want to worry about "university expenses" years ahead? Let 'em take loans. They are not proper loans at all, more like a graduate tax, or at least a tax on those who attend.

overlander

kidmugsy wrote: »

Pretend that the cost was added to your mortgage, then work out what the total interest payment will be over the years. Sobering!

Very good way at looking at it, will remember that one in the future.

InsideInsurance

racing_blue wrote: »

Kind of a budgeting question.

I would love to take my family skiing this winter, in the Alps or in the USA. It would be very expensive I expect.

I'm struggling to decide if we can afford it. On one hand the cash is there so I could click "buy". On the other hand we have all sorts of future expenses to think about such as university expenses, mortgage payments, replacing cars when necessary, house improvements... some of these several years away.

How do you decide in a situation like this?

Its not really a budgeting question but a priority.

You should probably have 4 buckets of money, living expenses, emergency fund, accrual for known future expenses and fun money.

I wouldnt raid living expenses or emergency fund for a holiday it may be during that skiing holiday that you;re injured and need to rely on the emergency fund, but the accrual will often come down to priorities - is the nicer kitchen or the nicer holiday the priority? Do you want to be able to pay for your kid to rent a room and a few nights out or to rent a mansion and champagne parties every night or do you want them to get a part time job and support themselves?

racing_blue

Thanks for the replies, 4 buckets makes sense & I think gives me a good framework for making the decision.

Alas I suspect when the sums are done bucket number 4 will stretch to a weekend in Tenby, rather than a week in Jackson Hole.

Gers

It's a head versus heart problem!

My choice - do it. Memories won't put food on the table but they will keep you smiling well into your dotage. My only sibling dropped down dead a few years ago from overwork. Money in the bank didn't save him and it didn't make up for losing him.

As for the kids... let them take the loan out and pay for it when they're working. Your financial obligations to them have to lessen at some point.

May sound harsh - sorry - but sometimes it's about putting yourself first for a change. Two years ago I went on my own trip of a lifetime to Petra and was 'wow'ed' by it. I still look back with enormous joy so it was totally worth it.

Of course this is not to be considered sound financial advice! Just what I would do and what I am actually doing.

GlamGirlie

racing_blue wrote: »

Kind of a budgeting question.

I would love to take my family skiing this winter, in the Alps or in the USA. It would be very expensive I expect.

I'm struggling to decide if we can afford it. On one hand the cash is there so I could click "buy". On the other hand we have all sorts of future expenses to think about such as university expenses, mortgage payments, replacing cars when necessary, house improvements... some of these several years away.

How do you decide in a situation like this?

I would say it depends how quickly/easily you can replace the money spent on the holiday.

Personally, I live for holidays (and shoes and handbags) so they are my treats in life.

You mention uni fees - when does the child go? If it's next year, perhaps postpone the holiday, if the child is aged 10 for example, you don't need to be worrying about this yet. Likewise car & home improvements.

I find my view is often different to many people on these forums. Whilst I am keen not to waste money, at the same time I am no longer in debt, with a reasonable level of savings, and I want to enjoy my life - it's the only one I'll get. With that mindset, I do buy expensive treats for myself and my husband if I fancy it.... provided I have the means to do so.

I think this forum is fantastic for sharing tips, information and advice, but just occasionallly people are so focused on saving pennies they forget that actually some people do have money to spend and castigate them for doing so.

Good luck whatever your decision.