In this post, I’ll tell you about four kinds of free summer holiday activities that your family would love; and these will also make your wallet sing with joy and spare cash.
Summer holidays could be expensive. I’m not talking only about the costs of transport (in our case usually flights if we are to enjoy some sunshine), accommodation and food.
What really can push you over budget are the multitude of ‘little’ things that your children want and that you think that you ought to indulge in because you are on holiday. Let’s let our hair down, right?
Wrong. Buying a lot of rubbish and paying for activities that you thought you’d enjoy but didn’t can push into debt and/or compromise your financial aspiration.
Do you know what the one think that is completely wasted on me as a way to have fun when on summer holiday? Going on boats. Last time I tried, the experience was worth it (we visited Lalaria Beach and it is like you walk into a postcard) but the after effects (being sick most of the night) was not. I no longer go on boats and immediately save in the region of 100 euro (John and our son love boats so they go without me).
At the same time, summer holidays are for fun; all holidays are for fun. This is what got me thinking about the ways to have free, or as good as free, holiday fun.
‘But, Maria, don’t you get what you pay for?’ – you may ask.
Now I’ll ask you to think back and remember moments in your life when you had most fun with your family.
How are you doing? I’d wager that…
…most if not all gloriously fun moment in your life were not expensive. Very likely you remembered, just like I did, a string of free holiday activities.
So, here are the four free fun activities you can have on your summer holidays.
#1. Go to the beach
I know, I know. Kind of obvious, right.
Yes and no. Most people end up on commercialised beaches where all is for sale, there are beer joints every twenty meters and they all blast different but equally annoying loud music.
This is not what I’m talking about. Explore, my people. Try to find virginal, or nearly virginal, beaches that calm your soul. Sit down and listen to the song of the sea; soak the sunshine and let all your troubles go.
This is what we do: we explore the less commercialised beaches.
#2. Visit local historical sites
It doesn’t matter how small the place when you are holidaying is, researching and visiting the local historical sites is always worth is. Even if you must rent a car to get there.
You can also plan your summer holiday so that you visit a place with rich history.
#3. Do some good
Nothing makes me feel as good as doing good. Not joking.
One way to indulge in free holiday activities is to research the ways to do some good for the community you are visiting.
When we go to Skiathos, for example, we always go to the local dog shelter to walk the dogs. This is run by British volunteers and is need of help and funding. We combine the fun of walking the dogs (helping with walking the dogs) and making a financial contribution: after all, these people are doing an excellent job getting unwanted dogs off the streets and rehoming them.
One downside is that I always want to bring a dog back home and must be reminded that Suzi the Dog is not going to be very happy about it.
Are you one of these people who go to a sunny place in a faraway exotic country to eat chips (French fries) and drink German beer?
Hope not. Because there is great satisfaction to be found in trying the local cuisine (even if it looks gross and even if you suspect you won’t like it), learning about local habits and hearing about the local history.
I always do that and let’s face it; there are three things I like about Greece – the language, the food and vintage Metaxa. I still do Greek dancing.
You don’t have to break your bank account when on summer holiday; you can partake in some free summer holiday activities instead.
You can explore beaches and historical sites, you can do some good and you can immerse yourself in the local culture and traditions.
If all these fail you can always indulge in some celebrity spotting. This year on Skiathos we saw a famous rapper (my son was in rapture and all I could think is that I didn’t like his ink) and we knew that Johnny Depp is on the island at the same time as us. Not to mention that the yacht of the Sultan of …, well one of the Gulf sultanates, was marooned near one of the beaches we go to.
The important thing is to remember to enjoy your time on holiday; and you can do this for free or as good as free.
What are your favourite free summer holiday activities?
Having conversations about money with teens is not easy. In this post I share why the most important money competence you can help your teen develop is spending money, the five essential skills when spending and how I’m trying to do this with my son.
The five essential skills to master when spending money are:
Make the difference between ‘wants’ and ‘needs’
Taking control of your wants
Take the long view
Having conversations about money with teens is not easy. For that matter, having any conversations with teens is like squeezing water out of stone: it’s been sometime since I’ve heard anything than grunting and mumbling.
Still, having conversations with teens about money is absolutely necessary. After all, we are not teaching them to be dependent children all their lives. Don’t know about you but I hope that one day soon my son will be an independent man; put in other words, I hope that one day soon my teen son will be an adult.
Much of the independence that signifies adulthood comes with mastering your relationship with money. (Please note that I didn’t say ‘mastering your money’. I really believe that the relationship between our finances and us is one of mutual respect and collaboration, not one of master and slave.
So we agree; talking to your teen and teaching them about money is important.
Let me ask you though, what do you think is the most important competence you need to teach your teen?
Did you think that it is most important to teach them how to save money? Or you thought that it is how to make money, right?
The most important competence to help your teen develop is how to spend money.
It won’t even occur to you to teach your child how to diet, would it? You will try to teach her how to eat healthy.
It is the same with money, you know. You have to teach them how to spend properly; most else will follow from there.
‘Okay, Maria, it is all too well telling me to teach my kid how to spend money. What do I teach her though?’
Thought you’d never ask.
To help your teen develop the competence of spending money properly you need to help them master five essential skills.
#1. Know the difference between ‘wants’ and ‘needs’
A lot has been written in personal finance about knowing your needs from your wants. Mainly, this is done in the context of sticking with our needs when we want to save money.
I’ve never bought this one, you know. I think that keeping to our needs can backfire big time and that most people who fall off the ‘I’m sensible with my money’ wagon have been trying to do that for a long time. Sticking to your basic needs for a long time makes one crave something more.
We both know where cravings lead, don’t we.
This is why I’ve always believed that we have to focus on our wants.
How to know the difference between wants and needs?
This is easy. Everything that is absolutely essential to your survival is ‘needs’. On the other hand, everything that is not absolutely essential but adds colour and spice to your life is ‘wants’.
(You see that ‘needs’ and ‘wants’ can be very different for different people and at different stages of life.)
Knowing the difference takes only practice.
#2. Taking control of your wants
Left unchecked, our wants can take over our entire lives.
Hence, it is important to learn to control our wants. Most will interpret this as refusing some of out wants.
I believe that the trick is to learn how to want less.
This is a really hard one to help your teen with; there is so much temptation, so much to lust after out there.
I suppose, this can be done through example (you practice restraint) or through experience (you place your child in situations where they are happy with very little, like taking them hiking, camping etc.).
#3. Prioritise spending
Whether you are wealthy or hard up for money, you cannot have everything.
At best you can have anything.
Here the mastery is about prioritising spending. Simply put, it is up to you to decide what matters in your life and spend your money on it.
After all, money is only good when it nourishes your life.
#4. Take the long view
The thing about money is that you cannot spend it twice. This is why proper spending includes taking the long view on life.
You have to make sure that there is some money put on the side if you don’t want to miss the great opportunities that life inevitably brings.
(These opportunities don’t need to be business ones; there are opportunities to enjoy your-self.)
#5. Spend mindfully
There is nothing wrong with spending money; if you spend it mindfully that is.
Make sure that you slow down a bit when you put your hand in your pocket. Being hasty when you spend money is a bit like scoffing food: your brain is trying to deceive you that it doesn’t matter because you did it so fast.
It matter; it matters in both cases. Scoffing food matters for your waistline; spending hastily matters for your bank balance.
Where do my son and 10 euro come into all this?
I did promise to tell you about my conversations about money with my son and how I’m trying to help him develop the five skills of spending money.
Thinking about it, I decided that apart from example experience would work best.
During our holiday we set a spending allowance for our son and his friend. They were to have between them a certain sum and it was to last them for two and a half days.
When I first told my son what is happening he said:
“But mum, one ride at the beach costs…’ (insert a number of your choice).
“Exactly, son. This means that you have to decide what you do and how much of it you do.”
He went off with his friend. They went to the beach, did their own thing while I was lazing around the swimming pool, reading novels.
Two days later our son burst into our room.
“Dad, could I borrow 10 euro, please?”
You know what? John was going for the wallet.
“Nope. You have to wait till it is time for the next instalment.” – I said.
As you may well imagine, this didn’t make me popular with my son. Still, I stuck to my guns and it will eventually, I believe, pay off.
My son had the opportunity to learn through experience about controlling his wants, prioritising spending, taking the long view and spending mindfully. This, my friend, is four out of the five essential skills of proper spending. Not bad at all!
If all this learning costs me a bit of teenage angst, I’m game.
Conversations about money with teens are absolute necessity but not much fun. Part of the problem is that we as parents try to teach our teens the wrong thing about personal finance, namely, how to save money.
I am teaching my son how to spend money properly and believe that this is the cornerstone of a healthy relationship with money.
Do you talk about money with your teens? What are the money management skills you teach your children?
For many years now, our cash flow has fit a ‘prosperity profile’. This is the profile where monthly expenses stay constant and monthly income continuously grows.
My cash flow analysis shows that since February 2010, when my mind focused on increasing my cash flow like a sniper’s cross hair on a victim’s forehead, we have increase our regular monthly income by 60%. We have also build – through investing in businesses – a healthy monthly side hustle income.
In 7 years, our monthly cash flow has increased five-fold; yes, this is correct. This increase is a combination between increased income and no spending on debt (except mortgage). Currently, we invest an average monthly income every month.
It wasn’t always like that. Before you think of me as ‘lucky’ and/or ‘uppity’ remember that I arrived in the UK, twenty-seven years ago, with $20 in my pocket (not kidding). And I married for love!
We also have five different income streams and another one gaining momentum. This is not bad, you know. The average millionaire has seven different income streams (well, we are one short and our income streams are not that large yet.)
‘How do you know all that?’ – you may think.
I know exactly how our family finances have developed over the last seven years because I have records of everything. In fact, I could tell you how much a packet of butter used to cost on 2010 (I’ll save you; still, this is the kind of nerd that dealing with debt made me. Now, being a nerd keeps financially healthy and (relatively) prosperous.)
Okay, Maria, but why are you saying that budgeting is not for wimps? You cash flow analysis tells us that you are in great shape.
Here is the ‘not so good’ news, my friend.
Our biggest income stream is my monthly pay. As you know, trouble is brewing at my university and, in my unit, one in two jobs will be lost. While I believe that redundancy can be a wonderful opportunity, it is still a hard decision to take.
Do I think that I’ll be made redundant? Who know but probably now. What I need to decide to regain control over my life and my finances is whether I’ll be applying for voluntary severance.
If I were to decide to apply for voluntary severance, our biggest income stream will vanish.
Scary stuff. This is why budgeting is not for wimps. Let me tell you what my cash flow analysis shows.
Without my monthly salary, our monthly cash flow (assuming we maintain current level of spending) will become slightly negative. In other words, we’ll slide from a ‘prosperity’ to ‘debt’ profile. You remember, I’ve made a vow to never get in debt again, do you?
To break even, I’ll need to make between £500 and £1,000 per month (after tax).
Just here, my cash flow analysis become interesting.
The question is, would I be able to make £500 to £1,000 per month?
Ensure that your income streams are matched. This is the real discovery of my cash flow analysis: our income streams are uneven with my monthly salary the largest by far. As a result, potential loss of it will shake our finances.
I haven’t made my mind up yet but my cash flow analysis shows that if I were to apply for voluntary severance, the loss of my salary will push us into negative cash flow. Put simply, this means that I’ll have to find a way to make between £500 and £1,000 per month.
I’ll have a jolly good go at putting into practice what I’ve been preaching on The Money Principle and work on increasing some of our income streams.
It should be fun. Do you what to do it with me?
Now, if you don’t believe me, here are Eminem and Royce Da 5’9 telling about resurrecting their cash flow.
Editor’s note: This is a guest post from Pauline of InvestmentZen.com. The point Pauline makes here is simple: to achieve financial independence you need to master three things: spending less, earning more and investing wisely the rest.
Financial independence is the stage of your financial journey where your passive income from investments covers all your living expenses. That means you never have to work another day in your life if you don’t want to. Pretty sweet, right? But that sweet reward comes after a few years of saving and dedication that not everyone is able to accomplish.
Know where you stand
When you embark on a journey towards financial independence and early retirement, you need to review your entire finances to know where you stand.
If you have high interest debt, paying it off is your number one priority. Try to get a 0% balance transfer or at least refinance for a cheaper rate, so it doesn’t take forever.
Then look for a refinance of your student loans and mortgage, that can also save you thousands
Send every extra cent you have to pay off your debt.
Once your high interest debt is wiped off, time to plan for financial independence.
Your financial independence number
How much do you need to live comfortably for the rest of your life? Right now, there are expenses that are related to work, like buying suits, commuting or having lunch with your colleagues, that will be eliminated once you are financially independent. If your income is lower once you stop working, you might also be paying less taxes. And if you are living off your nest egg, you will not be making retirement contributions anymore.
On the other hand, as you get older, you might need a bigger house for your growing family, money to send your kids to college, and medical care in old age. The last thing you want is having to go back to work at age 65 because you didn’t plan properly!
So, determine your financial independence annual budget, and multiply that by 25. Using a safe withdrawal rate of 4%, your nest egg should outlive you if you have 25 years of expenses saved.
Financial independence is achieved by a combination of
Investing and compounding
Spending less is easy when you know the reward that is expecting you: independence from a cubicle and freedom to do what you please with your days, decades before your peers. But if it becomes a frustration, you might give up and go back to your old spending ways. Try to determine what is really important to you, so that doesn’t happen. If you want to buy something, wonder how long you would have to pay for it, and whether it is worth delaying financial independence by that much.
Earning more is the real key to financial independence. While you can certainly cut your expenses here and there, you still need to eat and put a roof over your head. You can’t achieve a 100% saving rate. In order to become financially independent earlier, you need to make more.
You can start by asking for a raise at your current job, if you haven’t had one in a while. A one time $10,000 raise means $200,000 more over the next 20 years! If you were already able to live off your current salary, invest 100% of your raise for a year or two. Living on last year’s salary is a great way to boost your saving rate. If your boss won’t give you a raise, look for a better paying job elsewhere. Or a job that pays the same but would give you more free time, less commuting expenses, etc. Try to find an hour or two in the evening to work on a side project. It could be something that pays you right now, like teaching a yoga class or dog walking, or a side business you enjoy, so it doesn’t feel like work and might provide an additional source of income in retirement.
Finally, investing is the secret that will take your financial independence plan to the next level. It will take much, much longer to save 25 years of expenses if you are getting 1% interest from your saving account, compared to getting 8% from the markets. 8% is a realistic rate of return over a long period of time (30+ years) for index funds like the S&P500. Open a brokerage account and start sending every amount you can spare, taking first advantage of tax free accounts and your company match for an extra boost. No need to be an expert in investing or spend hours researching a company, just select a few low fee index funds and keep going. Ignore the market crashes, the craze about this or that stock, do your boring little thing and watch your nest egg grow. Invest only money you can afford to leave untouched until financial independence. Reinvest the dividends and watch compound interest work its magic.
You can also look for other types of investments, like real estate, but remember that managing a rental property is not exactly what you call passive income, so take that into account when you picture your retirement. Will you be active, and willing to do that? Will you even be around, or traveling the world? Will a manager still make the investment worth your while?
Financial independence does not happen overnight. But following these steps, even on an average salary, you can get there in just a few years. If you save 50% of your income, which is easy with a partner since many households make it work on one income, financial independence is just 17 years away.
With the cost of vacations constantly rising, it can be difficult to know how you’ll be able to take the entire family away during the summer months. But thankfully, there are a number of ways you can start saving up points so you can enjoy the vacation of a lifetime and without breaking the bank.
Below you’ll find some top tips on how you can earn points through your credit card company, how you can earn air miles and where you can stay in hotels for free (yes, free!):
Before You Start, You Need to Plan Your Trip
As soon as you start looking at all of the available plans there are, it’s easy to get carried away and you may soon feel overwhelmed by the choices there are available. That’s why it’s important that you’ve decided exactly where you want to go before you start shopping around for the best reward schemes.
The points available with each credit card and holiday provider will differ dramatically depending on where you’re going. So, before you start planning, make sure you discuss with the family what your top destinations are. This will enable you to narrow down your search results so you can carefully filter through the available options without getting too distracted by other exotic locations!
Opt for Convertible Reward Schemes
Some credit card programs will only provide you with one reward program, so try to find one that’s convertible and offers you more than one scheme. A lot of leading credit card companies like AMEX offer a number of different programs (learn how to redeem AMEX points for maximum value here) which will give you much more scope when planning future vacations as well as this one.
And don’t forget to get your partner to sign up to these schemes too. You’re both entitled to them!
Pay for your Bills with Your Rewards Card
To rack up those points as quickly as possible, it’s a good idea to set up an autopay system with your credit card for all of your bills. Those bills that come out of your account once a month, e.g. cable, cell phone and electric, can all be set up to automatically come out of your credit card account. A lot of companies will let you do this without charging you any additional fees so it’s a great way of earning points without having to think too much about it. And if your bills amount to $2,000 a month, you’ll have earned enough to get a trip within the US with the points you’ve built up as many cards offer you a point per dollar spent.
Check Out Hotel Loyalty Programs
You may be thinking you’ll have to find budget accommodation in order to take your family to their dream location but think again. A lot of top hotels offer great rewards programs which allow you to cut the costs of your stay dramatically. Some hotels will offer you these schemes on their own but it’s much easier to build up points if you’ve got the rewards card that they’re co-branded with.
For example, you can join the Starwood Preferred Guest program which is in conjunction with American Express. This helps you to get fabulous overnight stays in these hotels with your points, and could even see you upgrading to a prestigious suite without it costing you a dollar!
Go Steady with Your Rewards
As mentioned previously, it can be easy to get carried away with all of the points on offer but this could land you in a whole heap of trouble if you’re not careful. A lot of these rewards come from credit cards and if you go too mad spending on these pieces of plastic, you could end up with a mounting debt that you can’t handle. So, be sensible when you’re using your cards, opting for one or two to start with before you add more, if necessary.
And finally, do your research before you spend your points so you know you’re getting the best value for them. Even though you may be able to travel somewhere with the air miles you’ve accumulated, your points may be worth more if you hold onto them for next year’s trip. Equally, don’t just hold onto your rewards “just in case” because they may start to lose value, expire, roll over with changing schemes and so on.
With a little careful planning and research, you and your family could be enjoying the ultimate trip at a fraction of the price!
Editor’s note: Aimee Archer took a round the world trip when she was 18, and since then has always loved the thrill of travel. Now a Mom, she enjoys planning trips for her family; broadening the kids minds as they discover new cultures and strengthening her relationship with her husband.
These money rules are important but today I’ll share with you 7 money rules that are powerful enough to transform you money destiny. And to top it all, these are money rules that you don’t hear much about and usually don’t think about or remember.
So, the 7 powerful money rules you don’t usually think about despite them having the potential to transform your personal finances are:
#1. Money spent living better is not wasted
You see, most personal finance experts would tell you that paying attention to your wants rather than needs and allowing yourself some luxury is a waste of money.
Living in a nice apartment?
Waste of money paying all this rent/mortgage when you can save it.
Travelling business class?
Waste of money when you can travel coach and save the difference.
Living better, makes you feel better, perform better and brings great returns.
I have introduced a rule that if my flight is longer than four-five hours I travel business (and it matters little whether I travel for my job, my side hustle or pleasure). This pays for itself manifold given that I save at least couple of days recovery time (my time is very expensive), can work during the flight and am less likely to die from deep vein thrombosis.
It is up to you to figure out what ‘living better’ means to you (and for you).
#2. Produce more instead of saving more
Regular readers of The Money Principle know that this is part of my ‘money philosophy’.
There is little wrong with living a parsimonious life style (said simply this means getting most bang for your buck). Still, producing more, and correspondingly, making more money is the secret to winning the game of wealth.
In many cases this is a matter of shifting your mind set from the one of a consumer to one of producer. Simply put, this means a shift from reading book to writing book, from playing games to developing games etc.
#3. Get excited, not afraid, about your money
I ignored this one for close to two decades.
All this brought was a financial crisis which I was determined enough to turn into rebirth. It could have easily been a disaster ending in a bankruptcy court.
Combat fear and turn it into an excitement that will bring about financial success irrespective where your finances stand at the moment.
(Just in case you started suspecting that I’ve gone all new age on you, this is about much more than a positive thinking. This is about framing problems, about the buzz that solving problems and winning give, and about turning misery into enjoyable games. Hard but so worth it.)
#4. You always buy emotions not things
I’ve never been able to understand people who shop for pleasure and remodel their kitchens every ten minutes or so.
Now, having done some research and thinking about it, I do. It is not about the kitchen or about the objects people buy. It is about the emotions this creates.
Buying stuff make people feel powerful, secure and prosperous. Spending is shapes their identity (I’m prosperous and certainly much better than…) and feeds their self-esteem.
Ones you remember that you don’t buy things but emotions, you may start thinking about different ways to achieve the same emotion. Ways that are not going to break the bank and fill your house with clutter.
#5. Decide what matters and spare no expense
When we were in a lot of debt and I kept track of every penny that came in and out of our bank account, there were three things on which I continued spending despite the expense.
I bought expensive perfume (I love Bulgari) because its smell makes me feel like million dollars (and then some).
Continues having expensive haircuts.
Maintained my gym membership and worked with a personal trainer.
These kept me out of psychological meltdown and helped me get out of debt very quickly.
Meanwhile, I clamped down on almost everything else. I cancelled my car parking permit and cycled to work; I stood at the bottom of a ski slope (we borrowed a friend’s house to go skiing) and bought people’s ski passes; I didn’t buy any clothes and shoes (bought clothes and shoes only for my growing up son); etc.
To master your finances you have to learn and act. You also have to be able to know when you need help and who you can ask for it.
That is all.
#7. Focus on value not money
This is a mistake that we make in our personal finance and our businesses. Large organisations make this mistake as well and they fail.
What is the mistake, you may ask?
We focus too much on money: we focus on the money we don’t have and we’d like to make. Meanwhile we completely ignore the fact that money follows value.
Which means that if we focus on the value we can contribute (and crack it), the money will follow anyway.
Next time you think about ways to make money, think about what you can contribute to someone’s life that makes their life easier, more enjoyable and more productive.
(As a side line, focusing on value is a very good way to make the difference between internet articles that really offer ideas on how to make more money and ones that only tell you to sell your stuff.)
Personal finance is not simply and only about spending less than you make, saving and investing. There are powerful money rules that the most successful players of the Game of Wealth know, and apply, and most people ignore.
Can you think of more powerful money rules that are usually ignored?
I believe it’s wrong to live with the worry about the next debt payment, about losing your house, your job or whether you’d have dignity in old age. So I’ve dedicated myself to teaching people in financial trouble how to build sustainable wealth.