CAN YOU AFFORD THAT VACATION??CAN YOU??....... The author of ‘Practical Steps to Financial Freedom and Independence,’ Mr. Usiere Uko, in this piece discusses how people can reduce their holiday spending It is holiday season again. Schools are closing for the session and children will be home for a long stretch. Parents are wondering how to keep them occupied during the long holidays. For an increasing number of parents, travelling abroad for vacation seems to be the answer. According to Deloitte on Africa report – ‘The Rise and rise of the African middle class’, African middle class has tripled in the last 30 years. This has given rise to a steep increase in consumer spending. In the 1990’s and early 2000’s, very few families travelled abroad for holidays. That was considered part of the good old days in the 1970’s when moneywas not our problem but how to spend it. That has since changed. Gradually, more and more families are travelling for vacation and showcasing their exploits on Facebook, Instagram and other social media sites, to the admiration of friends, both real and imagined. Families who have not been travelling abroad for holidays are beginning to plan one. The head of the home is under tremendous pressure from the wife and kids to follow the trend. In school, you don’t look cool if you do not have a foreign holiday experience to tell. Some schools ask students to write about their holiday experience as homework after the holidays. Any student who did not travel abroad is left to chew his pen and wish his parents were as ‘rich’. Rest and recreation Taking vacation is important to our well-being and productivity. A vacation is a time for rest and recreation, a time to recharge your batteries. After having worked long and hard all year, vacation is a time of rest and recreation, a time when you power down, relaxand unwind, so that you can return to work as good as new. It is also a good time to renew family ties and create family traditions and memories that will last a lifetime. It is time to really unwind, go for long walks, breathe fresh air, eat fruits and vegetables, sleep away the stresses, enjoy nature, spend time alone with yourself to really think throughthings with a clear head and take new decisions to move forward. It is time to escape the tyranny of the clock for a season and really relax in tune with nature. For folks who live in Lagos, leaving home before sunrise and returnafter sunset, stuck in traffic more than four hours a day, rushing through the day without time for a proper meal except junk food etc. Vacation is a time to leave the ‘madness’ behind and really think for a change, think about what you really want out of life and whatchanges you need to make to better move you in the direction of your goals and dreams. Can you travel abroad if you lose your job or retire? While going on vacation is important for our health and well-being, we need to strike a balance with our financial goals. By building a solid financial foundation today by achieving financial independence, we empower ourselvesto live life on our own terms no matter what happens to our source of primary income. This means our ability to enjoy tomorrow on a sustainable basis is guaranteed. If you lose your job today or retire tomorrow, can you stillafford the same vacations? Does going on vacations have to come to an end simply because you are retired? Most retirees also retire from vacations. They simply cannot afford it anymore. This is another way of saying they did not build enough passive income to sustain their lifestyleduring their working years. Their lives were wrapped round their salaries. The moment their salaries stopped and they switched to pensions; they had to drop their standard of living drastically. Cut your coat according to your cloth Going on vacation does not necessarily mean travelling abroad. When it comes to vacations, there are unlimited options; a trip to a nearby resort, a trip to the village, visiting with relatives in another town, travelling to different vacation spots in the country like Obudu Cattle Ranch and various resorts in the country. Outside the country, there are destinations like Ghana, Gambia, Kenya, Uganda, South Africa and of course outside Africa. You can scale down today for the sake of tomorrow. You can do local shuttles today to give you breathing space financially, before you start travelling abroad. It is easier and more fun to step up rather than come down. When you become used travelling outside Africa for vacations, when you can no longer afford it, having to travel to the village or neighbouring states will no longer feel like going on vacation. This is because you have raised your taste so high that coming down becomes a problem. It is an issue of mindset. By vacationing in-country, apart from helping to grow the local economy, your children get tosee other parts of the country. You have more time to rest and you will not be tempted to shop till you drop. You get exposed to a wider variety of Nigerian cuisine which is much healthier and more palatable to the processed foods we stuff ourselves with when travelling abroad. Shopping expeditions For many families travelling abroad on vacation, rest and recreation is at the bottom of their agenda. They stay in the city centre forsightseeing and shopping, and often come back more tired than when they left. It is easy to recognise a Nigerian at any airport abroad. Simply look at the trolley. It is stacked sky highwith luggage, a result of a successful vacation, sorry, shopping expedition. Apart from changing their wardrobes, they have to buy gifts for extended family members to show they travelled. For co-workers in the office, theexpectation is that you bring boxes of chocolate sweets. So you see Nigerians arrive the airport with two pieces of luggage bulging at the seams for each member of the party. The conversation atthe check in desk is almost always around excess baggage and deciding what to drop. Some are not aware of their baggage allowance when heading out, and are shocked to find out on their homeward journey that they are only entitled to one piece of luggage of 23kg (depending on the destination), so ingenuity kicks in – stuffing the hand luggage, carrying on some items, pleading for concessions etc. Many arrive back in Lagos stressed and worn out, from a vacation. Can you afford it? It is easy to get sucked in by peer pressure, doing things before you are really ready financially, so as to fit in. Having clear financialgoals gives you focus. Understanding what are assets and liabilities enables you to allocate your resources accordingly. When you understand that your primary role is to convertyour salary to assets, and use your assets to pay for your liabilities, it easy to determine if you can afford that holiday now, or scale it down so that your assets can grow to pay for those items in future. In terms of cash flow, a holiday is a liability, notan asset. Since it is so important and such a fun activity, you need to build an asset that willpay for it. I have a friend who pays for her flight tickets from proceeds of her dividend income from a particular bank that used to paydividends in dollars. Anytime I see her call her travel agent, I knew her dividends has been paid. Can you afford that holiday if you lose your job today or retire tomorrow. That is a good question to ponder on as you join the summer crowd to jet out, or wish you were there. Add Comment Below,Thanks
Posted on: Thu, 18 Jul 2013 04:37:44 +0000
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