I’ve had a few people beat around the bush trying to ask me how we’ve afforded to travel so much with kids. Finances are a funny thing aren’t they, to be so private?
I was raised with pretty clear financial advice: spend less than you make, save and invest the rest. So that’s my answer, if you opt to stop reading now :).
In more detail though, I am self-employed so don’t benefit from the amazing mat leave that Canada offers its workers which means I had to save to be off with our kids. When I had Henry I had saved up to be off for a year but quickly realized I wasn’t a stay at home type of mum, so my husband took paternity leave instead (and did get paid leave, meaning we didn’t need to use much of my savings) before leaving his job to be a full-time stay at home dad. With a newborn I was stunned at the way life changed, and I would guess that the first eight weeks while we were hermits we likely spent zero dinero. Week nine we went to the Bahamas with a billion of my relatives (we travel in packs) and on that trip it was pointed out that we were both off and we could do anything with our time. We went home and flew out at week 11 for a spontaneous six week backpacking trip through Western Europe.
Because I went back to work when Henry was five months instead of the 12 months I had saved for, I had about seven months saved up still to be “off” for the next baby if we decided to have another child (since the trip wasn’t planned for, we hadn’t saved for it so we used some of my savings to be abroad, and Tyler had his parental leave pay coming in as well). I’ve always put part of my income into a “family fund” so that I could enjoy a leisurely mat leave if we had kids, so we kept saving and when Tom came along, we had about 14 months of income saved up.
On a day-to-day we live below our means on a fairly tight budget (we aren’t shoppers, and don’t have hobbies that cost money really so our living expenses are quite lean) that allows us to cover our needs, a few wants, and have an additional $70 of “fun money” per week (meals out, day trips, coffee dates with friends etc. OR we can opt to not spend it and add it to our travel fund which is usually what we do). Everything earned that is more than our budget goes into savings until I hit “x” amount and everything after that gets invested. Being the only one working, and self-employed it’s so much more comfortable to live this way as there are no surprises…we know exactly what we can spend. I would say that on the downside, because we respect the budget, we feel broke 100% of the time, but the upside is that we are always covered. We don’t spend money without thinking about “what account is this coming from” and if I get hit by a bus and need to be off to recover, we do have enough in our emergency fund that we don’t panic.
When we go on holiday we continue to live in a way that a lot of costs are parallel. We pay gas on our cars at home so we have that money to put toward car rentals or trains while away, and we eat regardless of location (with kids especially, we eat a lot of meals at the Airbnb or in our hotel room picnic style), and we continue to have about $70 per week to do bonus things. The added costs then are flights (this is the major cost of the trip, so we monitor SkyScanner but I would love to hear your advice if you have a tip for flight deals…also, Tom is still “free” and Henry pays a children’s rate so that helps), and accommodation. Airbnb will offer a lower rate the longer you stay so that helps…the longer the trip, the lower the per diem rate is.
Some people prefer to do a one-week-a-year blow out trip where all budgeting is out the window so that they can take in shows or events, do some shopping, eat out three times a day and have drinks at meal time. I’d rather be away longer or more often on a tight budget. Just preference, as both options are good! I will say, small kids save money in the very essence of their personalities because they won’t tolerate shopping, or leisurely meals. Sometimes when we’re about to purchase an excursion we’ll ask ourselves if Henry will enjoy it more than a local playground and if the answer is he’ll like it the same amount as a the free swing set a block away, we go to the park. That helps ha.
We do keep a travel fund so that we don’t feel guilty spending the money when a trip does come up (and we don’t travel without being able to pay for it in full in advance) but that’s it really. No shocking tell-all…spend less than you make, save and invest the rest!
If you’re looking to change up your finances, I use EQ bank for our funds that I want access to here and there (travel fund, emergency fund, family fund and so forth) as they have a much higher interest rate earning than a big bank (currently at 2.3% instead of .65% at RBC) and Wealthsimple for investing which is a true no-thinking way to invest as they do it all for you. I am happy with both!