Pimp Your Finances

Times are hard.  The unemployment rate is almost 8%, and more layoffs are announced every day.

What am I doing to help protect myself?  I’m paying down debt, increasing my savings, and starting a vacation fund.

Starting a vacation fund?  In the middle of a recession?  Sounds, crazy, right?  But hear me out.  I think it’s a great idea.  Here’s why.

1. A vacation fund can be used as an emergency fund if the need arises.
2. It’s a motivational tool to get used to saving more money.  It’s a lot easier to save for something fun like an exotic trip than it is to save money and never use it.
3. It’s a motivational tool to work harder.  It’s nice to know that all the hours you put in at work are helping you reach something that you enjoy.
4. I’m improving my finances is so I can enjoy life.  Traveling is one of my favorite things, so I’m going to make sure that I do it more.
5. I need to do a better job balancing responsibility and fun.  I’m all for working hard, but you have to make sure to play hard sometimes too (as long as its done responsibly).
6. Right now, I’m ahead of schedule with my goals for paying down debt and starting an emergency fund.  Planning for vacations is not an irresponsible thing to do if I’m taking care of my other goals.
7. I’m going to want to take vacations anyway.  By planning for them in advance, I can pay for them in cash instead of using credit cards.

In light of all those things, I think starting a vacation fund is a great idea.  I’m excited just thinking about it.

It may not be the ideal thing to do for my finances, but then again, the ideal thing to do would be to just sit in the dark at home all the time, and eat nothing but ramen noodles.  However, that’s not practical or sustainable.  I’m improving my finances so I can live the good life.  Not so I can sit at home like a miser.

If I’m taking care of my other responsibilities, I don’t see a problem with paying cash to take a vacation.  By the time I actually go on a trip, my debt will be paid off, and I should have a good emergency fund started as well.  If that’s the case, I think I deserve to reward myself.

As a reader recently commented, it’s better to achieve progress over perfection (thanks DDFD).  I’m not going to be able to instantly start doing everything I should be all at once, but I can work to get there gradually.  If I’m making sustainable progress, I think taking vacations can be a responsible part of my plans, and could actually help me in the long run.  It will give me a sense of satisfaction for all the changes I’ve made so far, and motivate me to further improve my finances.

Like everything else in life though, this all depends on your unique situation.  And of course, it all depends on if you’re taking care of your other responsibilities.  I’m not suggesting that anyone should reckless, or abandon other more immediate priorities to go on a trip.  Not by any means

But if you’re in a good place with your finances, there’s nothing wrong with a little well-planned fun.  That’s what we’re all working for anyway, right?  What are your thoughts?