You’ve just booked a dream vacation with some of your closest friends. You've found the perfect Airbnb, landed on a flight and found a few places to add to your "must see" list. Then you get that feeling in your gut. Heavy and uncomfortable, you have a memory of the last time you all had to split the bill and how awkward it was. Here, I lay out some ways for you to prep for trips with friends to ensure that awkwardness around money is handled beforehand so when you get on your trip, you can focus on being present.
Get on the Same Page
Make sure that your version of vacation somewhat aligns with your friends. If their version of a vacation is hiking and exploring and hanging out from dawn till dusk and your version is holding as still as possible, probably not a good idea to travel together.
Once you're on the same page about what vacation means and what this particular trip means you should also check in with what their expectations are when it comes to food and lodging. Some people are fine camping and hanging out in hostels, where others want 5-star accommodations. Make sure you guys are on the same page when it comes to the style of vacation. If you’re on the same page, you're going to then go ahead and book.
Talk about the budget!
Who is going to pay for what? Is one person going to put everything on their card and ask for other group members to pay them back? Is it going to be it all evens out in the wash kind of situation? Does one person get drinks and another gets an activity and you just figure it all evens out? Or is it the type of trip where you tally up every single thing and make sure that every person has paid? Maybe everyone pays their own way for everything. Whatever you do make sure you talk it out before you get there.
Talk about food beforehand. Especially when it comes to a large group especially if you're traveling abroad it is not common to split up the tab. Here in the states, most restaurants won’t let you split the tab if there are 6 or 8 people at a table. Again, a couple of easy options are to alternate who pays for what meal or each person pays their share of the bill but make sure you discuss it beforehand. I find it to be really helpful to use apps that tally up what yo
u’ve spent and what you owe so instead of sending money back and forth between each other, you can use an app like Splitwise. Splitwise tallies up everything that you spend money on and that your friends have spent money on. At the end, it says you owe each person this much money or X person owes you this much money. It’s so much easier than going back and forth!
When Communication Gets Messed Up
What happens when you think you and your friends are on the same page but you aren't? What if somebody is ordering champagne and lots of appetizers and they say, “oh we'll just split it evenly,” and you’ve only had water and a salad. If you are close with them, you can let them know that wasn’t you’re understanding. If you feel really uncomfortable, then afterward you can go to that person and let them know, “hey that's that was not my understanding. I'm happy to send you money for the food, drinks, and tip, but I’m not going to be splitting it evenly.” Totally fine.
Have some solo or couple time!
One other thing to think about when you're traveling with friends is you do not have to be with them the entire time! This is not camp where you have to be together all day. Maybe before you guys leave you all can agree that no matter what you're going to do dinner together or there's a particular activity that you all are on board to try. If you're traveling as a couple, save some time for just the two of you.
If you have more questions, set up an appointment with me!
How do you manage paying your bills, saving for the future and spending for fun? Multiple savings accounts! I LOVE splitting up my savings categories so I can see how close I am to reaching my goals. Here I break down the accounts I have and why I’m such a fan. Enjoy!
Hey, this is Lindsay with Mind Money Balance and today I'm going to talk about why I love having multiple savings accounts.
It's very important psychologically to be able to see exactly where your money is when saving up for something. I'll go over the different types of savings accounts I like to have during this video.
When I say multiple savings accounts, I’m not talking about having a certain amount of money in bank one and a certain amount of money in bank two and so on and so forth. I'm talking about having all of your money in bank one but labeling the different savings accounts with different names. If your bank doesn’t offer this, it’s probably time to start looking for a new bank. There are plenty of options online, I really like bankrate.com and NerdWallet. Those are two great websites that can help you find banks that provide for your needs.
Let’s get down to the different accounts I like to have:
The first bucket of money is your emergency fund. This should be money that is only there, for exactly what it sounds like, in the case of an emergency. If something should happen to you or to your home that was unexpected if an emergency surgery comes for a pet or something like that. So that’s number one, getting an emergency fund.
The other account I like is an irregular expenses account. For things that come up throughout the year but they aren’t expenses that come up every single month. Things like car insurance might go into this account would be things like car maintenance, insurance premiums, things that are happening occasionally. Set some money aside in an irregular expenses account.
The next two are the fun ones. They are your life goals account and your fun money account. Your life goals account is money you're putting towards something that you are saving up for that might be off in the future. Maybe it’s time for a new couch. Maybe you’re looking to move and you need to save up first and last month's rent. That would be your goal account.
The last one is your fun money or your treat yourself account. This is really important for all of us to have because if all we're doing is kind of stocking money away and not using or enjoying it, then we can get fatigued when it comes to saving money for bigger things in our lives. This is your treat yourself or your fun money account, whatever you want to call it. This is the account that you can tap into for those things at that can be your kind of mini-indulgences or your mini-splurges.
I’ll walk through an example right now so you can kind of see what I mean when I talk about a treat yourself account. Let's say you are two person household so it's you and your partner. For you guys, there are a few things that are really important to save for throughout the year. Let’s say twice a year, you guys like doing a spa day and get a massage. That's two hundred bucks each time so now we've got $400 that we want to set aside. Now let's say you really enjoy having a date night carved out every single month. And that date night could vary. It could be going out to dinner to going go-karting but you want to set aside $100 each month so you can always have your date night. $100 a month times 12 (for twelve months of the year) and then you have $1,200. So you're are saving $1,200 in your fun money account in addition to the $400 for the spa. Finally, you like to have a little bit of pocket change for those things that come up. Say you are out exploring and there's a really cute travel mug or maybe you're out to dinner and you've hit your hundred dollar limit but there's a really yummy dessert on the menu. This is your extra cushion in your account. You want to save $50 a month towards those kinds of fun one-off purchases. Multiplying the $50 by 12, you have $600 a year.
Adding up the $400 the $1,200 and the $600 so that comes out to $2,200 per year that you are looking to put into your fun money account. It can kind of sound daunting but we are using a two-partner household so if we divide that by 12 were around $183; let’s just call it $184 so it's a little easier. That $184 you have so that breaks down to $46 per week or $23 per week per person. So once you put it like that you're putting aside a little more than $20 each week into this fun money account so that way when you do go to out you can spend somewhat freely. Why? Because you’ve set aside money for exactly that.
You’ve got your emergency fund, irregular expenses, big goals, and your fun money accounts along with a checking account. The checking is where your paycheck goes.I like to have automatic transfers set up so you can put money into the four accounts we already talked about once or twice a month.
If you have questions about what to do with your particular money situation, or this seems overwhelming, or you just want a little extra help go ahead and schedule an appointment with me. You can set up an appointment at mindmoneybalance.com. I'm available to see anyone in Michigan face-to-face and online across the country.
For most of us, our first money memories come from our families. Perhaps it was being told you couldn’t add the box of cookies to the shopping cart, for others it was learning how to add with coins. In this video, I share the financial lessons I learned from my mom. I was fortunate enough to have a mother who acted as a teacher throughout my life, and I gained a lot of valuable lessons from her.
Transcript of Money Lessons from My Mom
Hey, this is Lindsay from Mind Money Balance, and today I'm going to talk about things I learned from my mom. I was very fortunate to get some pretty solid financial lessons. I talk a lot about how we usually first learn what we know from our family, so today I'm going to share with you some things that I learned from my mom as I grew up.
1. Don't buy stuff just for the sake of buying it.
One thing I heard all the time from my mom was not to buy stuff just for the sake of buying it. I can think back to road trips that I did with my family and my mom's best friend and her kids, and any time we would stop for gas it didn't ever cross our minds to run in and get snacks or drinks. I honestly didn't even know or consider it to be an option that when you stopped for a pit stop, you could pick things up.
I remember in high school being with some girlfriends and stopping somewhere. They all came back with snacks, and I was shocked. It had just been so ingrained in me that you have water at home, or you have snacks in the car, and you don't need to buy anything.
2. Understand what your bank can do for you.
Another thing I learned from my mom was to know what the bank or the credit union's job was. I remember being a kid in line with her as she was going to either deposit money or cash a check, and she would give me these little money lessons along the way. Back then the bank had a board where they posted information, and she would point out the board and say, "Oh look at those CD rates." I remember her explaining to me what a certificate of deposit was, in terms that would make sense to a kid. She would say, "You are giving the bank money and allowing them to use it, and in exchange for them using your money, they'll pay you a little bit more when they give you that money back."
I also remember her telling me the importance of putting money in a bank instead of up in your rafters. She told me that in the bank your money would be insured, meaning it would be safe, up to $250,000.
3. Live below your means.
When I was in middle school, my family moved from a middle-class neighborhood into one of those McMansion neighborhoods. It was the early 2000s and those kinds of neighborhoods were popping up all over the place. I remember doing some back-to-school shopping and complaining to my mom that she wasn't buying me enough. For example, "Oh my gosh, well, so-and-so down the street, they get all this stuff," and whining about how we didn't. I don't think we used the term "hauls," but let's just call it a "clothing haul."
I remember my mom saying to me, "Lindsay, they're not using real money. They are using credit cards. They're not using real money. They are spending more than they earn." On the drive home we had a discussion about credit cards and living below your means.
So again, I was super fortunate to have gotten that information, and even though I was probably still a little angsty about not getting all the clothes I wanted, I at least had learned a lesson about why it's important to only buy the things that you can afford and not the things that you want to afford. Lo and behold, a few years later the housing crash came, and we all as Americans learned what it was like to live above our means and below our means.
4. Make sure you can take care of yourself.
My mom was a young mother, and she made it very clear from as long as I can remember the importance of having your own skill set and earning your own money as a woman.
I can remember, from the time that I got my driver's license, my mom saying things to me like, "You have to be a productive member of society. If you're not physically or mentally disabled, you need to be working. You need to have your own money. You need to have your own income." I got my first job around that time: I was working at a little restaurant the next town over. Friday or Saturday nights in high school I was working until closing, which at that restaurant was 2:00 a.m. I remember that experience being very valuable, and mom saying again and again: make your own money, have your own skills, make sure you can take care of yourself.
I think that's such a valuable lesson for anyone, but especially for women, and especially for young women.
5. Use what you have before you buy more.
Finally, the last big money lesson I learned from my mom was to use up all that you've got before you buy something new. This is across the board. This is from scraps of food to vehicles.
For example, if we were baking and there was a little dusting of sugar at the bottom of a bag, we made sure to use that a little bit first before we opened the new bag. With big purchases like vehicles, my mom was a huge proponent of buying vehicles that were safe. So by default that tended to mean more expensive vehicles, but she would buy those vehicles and quite literally drive them into the ground. I'm talking 200 or 250,000 miles that she would put on a vehicle before even considering getting a new car. She drilled into my head that leasing a vehicle was wasting money. That depends on your situation, but the lesson that I got from my mom was if it ain't broke, if it's working, then use it, make it work for you.
Those are some of my money lessons that I remember from my mom and still tap into today.