Last updated: May 06, 2015


Travel Advice

20 things your holiday teaches you about money and life

Using up your leave is a good idea. Picture: Supplied

Using up your leave is a good idea. Picture: Supplied Source: News Limited

THE phrase 'personal finance' makes us think of debt, saving for retirement, insurance, and other dreary subjects. 'Holiday', on the other hand, evokes beaches, hammocks and margaritas.

But the aspects of our lives most seemingly removed from our finances can actually give us the most insight into how best to manage our money.

After all, how we spend our lives is how we spend our time, and our time, like our money, is a limited resource. How we choose to allocate both requires us to reflect on our deepest priorities.

So, after lazing in the hammock at the beach, and preferably after the effects of your margarita have worn off, here are 20 money lessons to absorb from your holiday.

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1. Use all your leave

If you're one of the many people who struggle with using up all your annual leave, consider this: holidays make us happier than our marriages, religion, weddings, birthdays - and even cats, according to an Expedia survey on holiday happiness.

Holidays also help us rest and recuperate from work, give us new experiences that broaden our horizons, help our personal and social development and boost our overall subjective well-being, according to a study by British research Scott McCabe. So, a holiday isn't just a 'lazy' break - it actually is productive time, just not in the ways we traditionally think about productivity.

2. Some of the best things in life are free

Especially in the summer, our holidays take us into nature. While you're at the beach, or kayaking or trekking, or whatever type of nature you may be immersing yourself in, you may find delight in tree leaves fluttering in the breeze, the patter of rain outside your cabin, or the serenity of butterflies flitting about. When you're back in your own life, incorporate nature more regularly into your life whether through walks in the park or looking up at the night sky.

3. One of the best investments you can make is in your family

The first sense of the word 'investing' usually concerns money. But one of the most important investments we make in our lives is in our family - and these are the people we tend to holiday with. This leads to yet another good reason to take your holiday time: A recent Disney survey of 1000 parents found that less than half of their time at home was quality time, but 82 per cent of their holiday was.

Family is important. Picture: Supplied

Family is important. Picture: Supplied Source: News Limited

4. Speaking of investments, there's no need to track them constantly

Are you one of those people who checks on your investments more than once a day via your smartphone? Or, do you find yourself lulled into a hypnotic state by scrolling tickers on TV? Hopefully, on holiday, you did that a bit less and realised that your portfolio didn't crash - and if it did, then you probably learned a different lesson: You might have taken on too much risk.

5. Approach your money the same way you try new things on holiday

If you tried, say, kiteboarding for the first time on your trip, you probably didn't just buy a bunch of gear and get in the water, waiting for some wind to carry you away. Likewise, when you want to do something new with your money - say, managing your own investments - go in with some research, get a lesson, and most of all, don't be unrealistically optimistic.

6. You could probably live with fewer things

Most of us have too much stuff (so says the woman who packs six kinds of lip gloss for one trip). And you'll probably find on holiday that not only can you live on the items you've packed in one suitcase, but that often, you won't even need everything you've brought. To live on less, take the six-item challenge (in which you wear only six items for four to six weeks), or check out Zen Habits, the Minimalists and more.

7. Always save for something

What should you do with that money you're no longer spending on unnecessary things? Put it away for big goals, like more travel or the ultimate holiday - retirement. Most likely, you are already aware of the importance of saving for things like travel.

In a Harris/Expedia survey, 28 per cent of people who did not take all their holiday days said the reason was they could not afford to do so. But, among those who save, more families save for trips than even for a child's college education, according to a survey by the Certified Financial Planners Board of Standards and the Consumer Federation of America. So, if you are now reaping the rewards of having saved for this holiday, apply the habit to other priorities.

You should always be saving for something. Picture: Supplied

You should always be saving for something. Picture: Supplied Source: Supplied

8. We get more enjoyment from experiences than things

You've probably heard this one before, but you'll almost always derive more happiness from experiences than objects because 1. anticipating them makes us happy, 2. they create lasting memories that bring us later contentment, and 3. we get habituated to objects, so they don't give us a lasting boost. So, opt for more dinners with friends, and fewer electronics, shoes, or … lip glosses.

9. Savouring helps us get the most out of life

Here's an easy way to increase the 'purchasing power' of your time investments: savour the moment. While on holiday, you may take a moment to smell the jasmine, or close your eyes and listen to the kids' laughter. Psychologist Sonja Lyubomirsky says people who take the time to savour are happier and less likely to be depressed. Use that technique even during workweeks to give yourself a lift.

10. A budget will always help you

You probably know what amount would be prudent to spend on this holiday. And you already know which activities are going to eat up a bigger chunk of that budget. For instance, maybe your fancy cooking class is pricey. Counter that with a less expensive day at the beach, reading a book. The same kinds of tactics can help you manage your budget throughout the year. If, in an upcoming month, you've got two weddings, vow to stay in on the other weekends.

11. Shop around for big-ticket items

Most likely, when you bought your plane tickets, you looked for the best fare you could get (at least as long as it didn't require three layovers, but more on that in a second). The same way you used a bargain-hunter's mindset to buy your plane tickets, adopt that mode for most other purchases in your life, whether for buying clothing, electronics or furniture, or hiring a money manager, contractor or nanny.

12. But don't be ridiculously frugal

At a certain point, the amount you save becomes less important than, for instance, how much of your holiday you'll spend in layovers at various airports, or, even more importantly, how safe your new baby crib is. So, don't be stupid in your quest to save a buck. Sometimes, the value you get for your dollar is worth it.

Enjoy your holiday without being ridiculously frugal. Picture: Supplied

Enjoy your holiday without being ridiculously frugal. Picture: Supplied Source: News Limited

13. Spend on safety

When we travel, we're often asked if we need trip insurance or car rental insurance. While we are often covered by our credit cards, there are times when you really do need extra insurance - like, if you're going trekking in the Himalayas and being medevac'ed out in a medical emergency won't be covered by your existing insurance. Similarly, don't skimp on things like renter's insurance or disability insurance. A little bit of money upfront can be a big help later on.

14. Know your priorities

As mentioned above, time and money both come in limited quantities. For your one- or two-week holiday, you probably couldn't make it to every destination you wanted, nor do every fun activity. But you figured out an itinerary based on what was most important to you. If you feel overwhelmed by bills, take a moment to set some priorities and cut away the less essential expenses. You'll end up with more of what you really do value.

15. Roll with the punches

We can plan all we want, spending hours crafting the ultimate holiday itinerary. But when the holiday arrives, you might find that the Reykjavik restaurant you were most excited to try has a private event the only night you can go, or that your hopes of beach time get dashed away with a rainstorm. You might end up having the most fun night of your trip dining at a restaurant you never heard of, or playing cards in your beach hut. While it might seem harder to deal with financial or career disappointments, you should always try to make the most of any bad situation - and be open to ending up with an even happier outcome.

16. Don't be afraid to ask for help

We've all been lost in a new place - and (hopefully) discovered how easy it was to get oriented by asking for help. It's the same with money: trying to invest on your own but losing money? Feeling like you could get input even on your budget? Do some research, or ask a professional. (Here are 10 questions to ask a potential financial adviser.)

17. It's okay to make mistakes

If you've ever learned a foreign language and then tried to practice it while on holiday, you know you're bound to make some laughable mistakes. (Once, at a spa in Italy, I talked with some Italians about the 'cold' pool - only to realise a day later that I had been calling it the 'fried' pool. 'Fritta' vs. 'fredda' - I like to think I'm not the only one who's mixed them up.)

You might even make a bigger mistake, like not getting the proper visa, or leaving your passport behind. But ultimately, you should learn your lesson and move on. Don't dwell on mistakes, even money ones, which are harder to bear. Hey, even this guy who fell for the same scam twice in a week, causing him to lose $1350, was ultimately able to laugh about it.

18. Patience plus effort plus time is a winning formula

Planning to spend a day hiking to the nearby summit? You might start out excited for your adventure, but soon, all you can think about is the harsh sun, how little shade there is on the trail, and that you just wish you were there already. But if you keep putting one foot in front of the other, you will eventually reach the top, where the air is cooler and there's a breeze. If saving for retirement or the down payment on your home has you similarly fatigued, remember what it took to climb a peak on your holiday, or finally stand up on your surfboard. Constant effort, plus patience and time will often net you your wish.

19. Health trumps money

A lot of us try to do active things on our holidays: skiing, surfing, biking, etc. Or, we pursue our favourite regular exercise habits, like running or yoga, or to boost our health in other ways, like catching up on sleep. As mentioned before, this reflects our priorities. If exercise and sleep are things you like to do on holiday, why not work them more frequently into your working life?

Healthy on holidays? Try to work it into your everyday life.

Healthy on holidays? Try to work it into your everyday life. Source: News Limited

20. Gratitude makes us rich

When you're building sandcastles with the kids or enjoying a lobster feast, you might be so happy, you find yourself taking a moment to be grateful for all you have. It's easy to do when the sun is shining, no meetings are on the calendar and you haven't heard your alarm for a few days. But you can still take the benefits of gratitude with you into your everyday life - and you should. Practising gratitude regularly can lower high blood pressure and put you at lower risk for depression, among other health benefits.

In fact, here's one thing to be grateful for: that holidays give us an opportunity to learn about finances in a painless, fun way. Well, usually ...