My wife and I love to travel. Each year our Facebook posts are sprinkled with places we are visiting – hoping to encourage others to see the world, or perhaps see what they are missing by not seeing the world. We even share the lessons we have learned along the way to teach them how. Mark Twain said it best: “Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one’s lifetime.” With this as our guiding principle, we see all we can see.
On an average year, we take two “planned” vacations (and some sporadic ones along the way). For us, that usually means Europe or someplace that others may consider to be exotic, but which have become our normal adventures because of how we budget travel. Experience has taught us that travel in the United States is expensive. If you only have the U.S. as your personal experience, you will think traveling is cost-prohibitive and you would be correct.
We spend far less on travel than people believe. For North American we find driving our automobile is our lowest cost window on the Country. To save money we like to camp in the fresh air at a fraction of the cost of a hotel. We also like to enjoy the free options while traveling, like music in the park or free museum days. The one cost we find really becomes expensive is daily restaurant visits, so those are replaced with picnics instead. We budget for restaurants that are truly special and because we plan ahead, we never feel guilty when the bill comes.
Our ability to travel often is because we don’t treat vacations as “play money” as many do. Ours are carefully budgeted and we are very mindful to stay within budget. Occasionally, we discover something truly unique that we feel we can’t do anywhere else. Falconry lessons at a Castle in Ireland was one such occasion.
Once a destination is added to our bucket list, we research to know their “off-season”. Off-season means we can book hotels and tours for less and often see things without waiting in line. (Fewer people means you see more)
When we fly, we book most flights using airline miles earned on credit cards. We earn these flights on expenses we incur in living our daily lives. Groceries and gasoline purchases for us yield free airline seats, free hotel stays and free car rentals.
What has truly given us travel wings is our auto vacation strategy. This is not an “automatic” vacation strategy, it is our approach to owning an automobile.
Here is our “auto” secret – we don’t have a car payment. Our non-existent monthly car payment is budgeted for travel. We do own cars, three in fact. We just don’t owe a bank for any of them.
If you think we must be rich (we aren’t) or that our approach is a sacrifice (it’s not), let me share some startling numbers. The average new car payment in the United States in 2020 is $557 per month. That’s $6,684 per year to drive a shiny new car. Add to that price higher insurance costs, more car washes, detailing and other expenses, and it will top over $8000 per year easily, just to get from point A to B. Now don’t get us wrong, there is a health benefit of owning a new car. When you first get that car, you will carefully park it away from the rest of the huddled masses so it doesn’t get scratched, forcing you to walk. We just park that far out with our old car to get the heart benefit while avoiding the heart stress created by a monthly car payment.
So what are we missing by doing that? The average car loan is 72 months. That’s 6 years of consumer debt. In case you are keeping score, $8000 X 6 years = $48,000. That’s definitely the middle of the pack for many a new car.
For us, that’s 12 missed vacations. That is just too large a relaxation sacrifice to finance a car / depreciating asset.
Automobiles can be a wonderful expression of your personality or a great way to explore (A Jeep Wrangler is a good example of a vehicle that can get you off the beaten path). A select few can even be investments (We bought one of our cars thinking this then just decided to enjoy it). The large majority are just depreciating metal hulks that serve the same purpose: getting you from point A to B. Most people spend way too much money on them.
If I handed you $5 today after you handed me $100 when you asked for change, we probably would get into a fighting match. But when you break it down, that is what your car is, the equivalent of $5 in the future for something you bought today for $100. What are you giving up for 6 years in financing to get from point A to point B? We can tell you: France, India, Ireland, Italy, Asia, Hawaii, Spain, England, Portugal and many more.
I will be honest, our approach could be a sacrifice to some and totally impractical for others. It’s not the perfect solution for some.
My wife would enjoy a new car. Our Toyota Pruis turned over 250,000 miles this month. It is a daily work-horse, providing us with incredibly low-cost transportation for almost 10 years. It is a boring car and we are bored with it. Many people hate the Prius and will tailgate you because it’s a Prius. But in spite of that, it’s huge inside with great roominess for backseat travelers or camping gear. It is cheap to own and drive and environmentally friendly. At this point, ours has so many miles, it is fully depreciated by now. We would not get much for it if we tried to sell it. This is a car to get to and from work and take on long vacations. It needs to be reliable and it is. Our Prius has been super reliable. The best car we have ever owned.
We could replace our trusty Prius with another one with much lower miles for under $20,000, but we won’t until we absolutely must. That’s because our car and lack of car payment provide us with too many future amazing memories. If it does bite the dust, we will buy another one for much less than a new car and when we do, it will be without financing a car payment so we can keep on traveling. What’s our budget? Whatever it takes NOT to have a car payment.
I know what you may be thinking: when you spend all your money on travel you have no money left in an asset that can be liquidated. That’s incorrect. We have more leverage than most because whatever we would sell our car for is ours to keep, as there is no loan to pay off. A $2000 car is worth the same as a $20,000 car with $18,000 left to pay off.
I hope in reading this article you concluded our frugal approach to travel probably extends to the way we live our lives. Indeed, our travel approach is an extension of our choices in life. Almost all decisions any of us make in life result in a sacrifice in another part of life. A commitment to working more hours to make more money is a sacrifice to time spent relaxing. Time spent relaxing is a sacrifice to making more money through hard work.
Life is a balancing act of managing what is important to you. We have decided to enrich our short time on the planet by doing things that are important to us, not impressive to others. Some of what we do becomes impressive because we can and choose to do them, but it is the sacrifice we chose that allows us to do so. Gaining insights on how others have modified their lives to seek enrichment is part of the journey to enriching our own lives and part of the joy of sharing what we learned with others. Remember, life is a journey, not a destination. Enjoy the journey.
The Mirror has two faces 
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