Author Topic: Now or Later?  (Read 5124 times)

Mirwen

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Now or Later?
« on: May 25, 2015, 10:05:57 PM »
Starting August 10th my husband and I will be starting new jobs for the school district.  This means we will have about an extra $1100 per month net to spend how we want and two months of free time of during the summer.  We have two small children, 5 years and 2 months. 

I advocated putting the extra cash in a 457 or saving for a down payment on Real Estate investment property. Hubbie wants to spend $3-5k each summer on extensive travel.  In other words, I want to save for later, but he wants to use it now while our kids are young.

At first my reaction was, "no way! we can buy our freedom with that."  However he pointed out that we have our freedom annually and the money to take advantage of so why not enjoy it now while the kids are little and can enjoy it with us.  I'm starting to see his point, but I still feel uncomfortable having that much going to a vacation fund.

I want to hear arguments on both sides.  What else should we consider and what else could we do with 2 months off and two little kids.

(Note: we have a decent 401k from previous employment and the state pension plan should allow us to retire in 20 years at age 55 without additional savings.)

cbr shadow

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Re: Now or Later?
« Reply #1 on: May 25, 2015, 11:00:11 PM »
I agree with your husband that you should take some vacations with the kids while they're young since you have summers off.  What a huge benefit to have that!
$3-5K is a massive vacation fund though, so if anything I would try to compromise with your husband about lowering the budget a bit.  Rather than just saying "we will spend $XXXX for vacation this year" I suggest planning your vacations based on what you want to do, or what you think your family will get the most out of.

For example, my wife and I have a $3000 budget per year for vacations.  We also came up with a list of places we want to go and things we want to do.  Then when vacation time is coming up we'll keep an eye out for deals for those places.

Anyways, it's great that you have so much time off especially during the summer when your kids are off.  Have fun while you can, but just dont overdo it

MDM

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Re: Now or Later?
« Reply #2 on: May 25, 2015, 11:27:00 PM »
We have two small children, 5 years and 2 months. 
Vacations in the next few years will be lost on your children.  If you want to do something for their sake now, buy a bunch of cardboard boxes that fill a room or two and let them play to exhaustion.

If you have someone who can watch the kids for a week or so, then maybe the two of you can have a getaway.

Otherwise, wait a few years (e.g., when the kids are 13 and 8) if you want to have a vacation memorable for all four of you.

mxt0133

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Re: Now or Later?
« Reply #3 on: May 25, 2015, 11:34:26 PM »
I'm going to agree with MDM.  I have two small kids and one new born but spending a boatload on expensive vacations before 6 years old seems like a waste.  Do you remember anything before 6 years old?  I'm not saying don't spend time with them but it doesn't have to be Europe, the Caribbean, or even Disneyland.  Go camping, go on a road trip.  But after a few days the kids will get homesick and will not be much fun?

Now it's for the adults then that's a different story.  I want to go to far off places now and not wait till i'm 50+ so we still travel but if it's for the "kids" then a trip to the park or zoo will be as memorable to them as a more expensive vacation.

LeRainDrop

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Re: Now or Later?
« Reply #4 on: May 26, 2015, 02:11:12 AM »
Agree with the folks who say kids that young will not really remember the travels.  Also, I think too little routine and the hassle of traveling could be difficult for the kids.  But with that time off and that budget (or even less), travel sure would be tempting to me.  I would suggest frugal travel that offers some stability for the kids -- let me explain:  One thing I remember from childhood is that my parents used to rent a cottage at a beach within driving distance from us in Maine every summer.  We had a ton of fun going to the beach and playing at the arcades.  You could do something like that, or another idea would be to rent an apartment/sublet in a foreign country, where your oldest can learn the neighborhood, see a different part of the world, etc., or even just a different part of the country.

lakemom

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Re: Now or Later?
« Reply #5 on: May 26, 2015, 04:58:53 AM »
We have two small children, 5 years and 2 months. 
Vacations in the next few years will be lost on your children.  If you want to do something for their sake now, buy a bunch of cardboard boxes that fill a room or two and let them play to exhaustion.

If you have someone who can watch the kids for a week or so, then maybe the two of you can have a getaway.

Otherwise, wait a few years (e.g., when the kids are 13 and 8) if you want to have a vacation memorable for all four of you.

+10 says the mother of 6.  Unless your 'vacations' are going to be sitting on a beach playing in sand or camping, the kids are not going to get memories out of it for a few years.  Even when they are older you will get some whining about doing anything on vacation other than playing (I only got to do a short way down the Freedom Trail, Never made it to all the sites I wanted on Mackinac Island, Missed out on a number of 'must see' museums in Key West) and they WERE older.  We had to listen to a seven year old whine "I just want to go swimmmmmiiiiinnnngggggg!" for a whole day on Mackinac...its a 'family story' (he's 26 now) but at the time it pretty much ruined the enjoyment of the day for the other 2 who were old enough to care (#4 was a toddler and 5 & 6 were not born yet).

I would plan a lesser amount for vacations for the next few years and put additional monies into a taxable account to grow for your future but still be available for your use when the kids are old enough to appreciate the nice vacations.  In the meantime (next at least 5 years) plan on kid-centric vacations with the occasional Mom & Dad only trip to a location you are both dyng to see.

ltt

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Re: Now or Later?
« Reply #6 on: May 26, 2015, 05:03:55 AM »
I am in the camp that says save for later, so you will have the freedom when you get older.  If you absolutely must take a vacation with younger children, do it somewhat locally/regionally, then bank/invest the majority of your funds.  They won't remember it and, honestly, I think we had more fun on vacation when our children were older, not when they were young.  My husband, now in his mid-50s, didn't like the fact when we were younger that I always saved so much---his comments were always along the line that because I saved so much, that we didn't have enough money day-to-day to live on.  Well, here we are many years down the road, and I do believe he's glad that I did what I did.  We can now take it a little bit easier and just kind of coast into retirement without having to stress about it----except for the darn insurance part---haven't figured that out yet.

ltt

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Re: Now or Later?
« Reply #7 on: May 26, 2015, 05:08:33 AM »

I would plan a lesser amount for vacations for the next few years and put additional monies into a taxable account to grow for your future but still be available for your use when the kids are old enough to appreciate the nice vacations. 

If nothing else, if you put this money in a taxable account for the future, you will have made nice headway towards your childrens' education.

forummm

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Re: Now or Later?
« Reply #8 on: May 26, 2015, 06:38:38 AM »
We have two small children, 5 years and 2 months. 
Vacations in the next few years will be lost on your children.  If you want to do something for their sake now, buy a bunch of cardboard boxes that fill a room or two and let them play to exhaustion.

If you have someone who can watch the kids for a week or so, then maybe the two of you can have a getaway.

Otherwise, wait a few years (e.g., when the kids are 13 and 8) if you want to have a vacation memorable for all four of you.

+1.

Bicycle_B

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Re: Now or Later?
« Reply #9 on: May 26, 2015, 08:07:08 AM »
I agree with all the posters advocating simple fun for the kids and efficient saving for the future.

But a spoonful of sugar makes the medicine go down, and you indicate that your future seems pretty secure.  Meanwhile, hubby has some strong desire for now.  Presumably, your upcoming talks with him will separate "good for the kids" from hubby's "I want to do something exciting"...once you know in more detail what his vision of a special exciting vacation is, maybe you can find an inexpensive version of it.  Tell him, for example, that you will arrange details of his dream vacation (which you do for $1000/year, say) while the rest of the summer is for stuff the kids really like.

Or maybe he really does want what the kids want.  I suppose every family is different; if his vision of "what the kids want" is different from that of everyone on this forum, I guess some more exploration of true wants is in order.

Anyway, glad that you are choosing between good options.  As someone I read about once said, "You're choosing between Harvard and Yale.  Sure, figure out which one is best.  But after that, why worry?"

GeorgiaCPA

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Re: Now or Later?
« Reply #10 on: May 26, 2015, 08:29:16 AM »
Vacations aren't for they children at that age, they are for the parent (additional bonding time). 

As for $3k-$5k annually, you are probably fretting too much.  You noted that the monthly increase was $1,100.  Assuming that you save the rest of the increase in a tax deferred retirement account you will be saving in excess of 60% of the increase.  It is true that after 20 years that $5,000 would be worth $240K when invested at 7.5%; however, it appears that you are in for 20 years to get the pension benefit, so deferred spending doesn't really accelerate your RE date. 

A mustachian view-point would ask how much is enough?  Are you just trying to save like mad because you haven't done any forward projections? It might be worth it to go through some projections to make you feel more at ease about spending money on a vacation.  An extra $6K per year towards savings every year over the next 20 years will be worth $288K (@ 7.5%).  For every $10,000 you currently have in retirement accounts, you will have an additional $44,600 (again at 7.5%).  Therefore, if you have currently saved just $100,000 in retirement accounts and save just $6,000 per year you will have $734,00 at RE.  This is on top of any pension payments.  You can play around with any of these assumptions to see where you end up, but it appears as if you will have more than enough.

Today is a gift, and tomorrow is never promised. Come up with a plan that you can both live with and move forward (Also, the $3-5k sounds like a big SWAG on your spouses part.  You should come up with some goals and plans much like your retirement goals and plans (with cost estimates) - commit it to paper and execute the plan).

ShoulderThingThatGoesUp

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Re: Now or Later?
« Reply #11 on: May 26, 2015, 08:38:22 AM »
When I was little (preschool and elementary school) my parents took lots of fancy vacations. I always got sick and they were never any fun. I fondly remember feeding ducks with my older sister, and that apparently happened in Europe. But honestly there were ducks in Texas too.

I don't remember people in an Eastern European city (this was early 1990s) trying to herd me and my father into an alley to rob him, but apparently that happened as watching a little kid made my father seem like a good target.

kallinan

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Re: Now or Later?
« Reply #12 on: May 26, 2015, 09:08:38 AM »
Having children aged 7, 5, and 3... I concur.  Big vacations will be wasted.   But I'm also a big believer in seeing our big world.   So I suggest going halfway in between.   Save the majority of the money, spend a small amount.  Maybe $1k per year?   Saving 100% of your money is scrooge-like, and will probably breed resentment in your husband.  Spending $3-5k/yr is reckless when you could be buying your TRUE freedom.   

Full disclosure:  we're a Midwest family going camping in the Rockies later this year.  Trip will cost about $2-3k for 2 weeks (gas, gear - it's our first year camping).  We've been saving for a while, it's our first trip in years, we're not going to repeat it next year.   We are planning smaller in-state getaways next year well under $1k.

latetotheparty1977

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Re: Now or Later?
« Reply #13 on: May 26, 2015, 09:34:48 AM »
As someone with a 7-month-old, I can't imagine anything more stressful than bringing a child of his age along on extended travels. Waiting until he is at least 6, but probably more like 8 or 9, sounds like a better plan.

catccc

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Re: Now or Later?
« Reply #14 on: May 26, 2015, 09:39:33 AM »
Hm, I think I'm in the minority here, but I don't think vacations are wasted on kids.  Just because you don't remember something doesn't mean it wasn't a blast when you were there.  And you'll remember.  I'll remember my 1.5 year old bonding non-verbally (we parents didn't know the language, either...) with a couple of kids in another country over stickers she shared.  I'll remember wearing my 3 month old while exploring a new city.  I treasure those memories, and she likes to hear about them at 6.  Yeah, she likes cardboard boxes, too.

Maybe if it is something kid centric like Disney, you can pass on it for a while.  But if it is for the family, don't hesitate.

Split the difference and do a little of saving and spending with your extra time and money.

Mirwen

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Re: Now or Later?
« Reply #15 on: May 27, 2015, 04:10:22 PM »
Thank you for your input, there have been some good points, but I think I need to give more details of what we are considering.

As we live in Las Vegas, our primary goal for vacation time is to get away from the city during the heat of the summer. Similar to northern locations during the depth of winter, people around here try to avoid going outside during the summer.  We're not talking about a fancy vacation, we're talking about an extended vacation.  We get 9 weeks off and we may want to travel 4-5 weeks straight.  Discussions have been about renting a house in the Pacific NW for a month, preferably near the beach.  Another idea is renting an RV for a month and touring 3-4 national parks. 

You're right, the vacation is for the parents, not the kids, but I do think it will be a great way to build memories of summer together doing things, exploring the outdoors and seeing beautiful growing things, not hiding inside because it's too hot.  Are we overestimating the cost of doing these things? 

I came from a very poor family and I had one "real" vacation with my mom when I was about 12.  It was very memorable and I was very grateful.  I'm not sure if we are idealizing summer vacations or not.

AJ

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Re: Now or Later?
« Reply #16 on: May 27, 2015, 04:24:50 PM »
As we live in Las Vegas, our primary goal for vacation time is to get away from the city during the heat of the summer. Similar to northern locations during the depth of winter, people around here try to avoid going outside during the summer.  We're not talking about a fancy vacation, we're talking about an extended vacation.  We get 9 weeks off and we may want to travel 4-5 weeks straight.  Discussions have been about renting a house in the Pacific NW for a month, preferably near the beach.  Another idea is renting an RV for a month and touring 3-4 national parks. 

Our vacations growing up were always tent camping up and down the Oregon Coast. I have many fond memories of these times. The PNW coast is great in the summer - it's sunny but it doesn't get too hot (compared to the climate you're used to anyway).