What happens when our carefully crafted plans get changed by someone else?
Next week I’ll be taking a vacation out to California. We’ll be going to a resort, and our group was to split the bill. I had budgeted for this trip and was careful to set aside the right amount of money. To me, it was reasonable to spend money on vacation, so I had no problem throwing down for our room.
The only problem is that I got an email on Monday saying that since one person couldn’t make it, the price of the room was going up for everyone else. It’s not a huge dollar amount, but it is a 33% increase over the original cost of the room.
This isn’t enough to make a significant difference in my plans, but let’s pretend it were. Let’s act like this is a $300 increase and suddenly this whole trip is getting expensive. What would be the best way to handle the situation?
I could cancel my trip because the added cost makes it not worth it. But I would also have to lose the money I spent on airfare, which is half the original cost. That doesn’t make sense. I want to go on this trip!
I could argue to my friends that since I carefully budgeted, I shouldn’t be held responsible for the additional costs. Do you think that will win me friends with the rest of the people going? Plus, it’s not fair to the rest of the group: they also planned for the trip and the extra money has to come from somewhere.
I could put it all on my credit card and worry about it later. Not a great plan because that’s how a lot of people get into debt. I want to be proactive, but how?
The only real solution is to plan for extra expenses when traveling. Last summer I traveled to Guatemala and Honduras. Airfare was just $300 and we spent about $3 a meal on food. I knew coming in it would be cheap, and I thought $200 for two weeks of vacation would great! What I didn’t account for was the cost of traveling. We tried to see a lot of cities so we spent about $150 just on traveling, so things got slightly more expensive. Since I was prepared to spend more, it wasn’t a big deal.
My rule of thumb is:
Hope for the Best, Plan for the Worst.
Readers, how do you account for unexpected expenses?
Image from Joe Schlabotnik
Our budget has wiggle room in it for things like unexpected expenses so typically it isn’t a big deal. The problem here though is someone backed out of an obligation. It would suck but couldn’t they be asked to pay a portion of what they would have paid.
If everyone else was counting on that one person then it could submarine the trip, obviously it didn’t but it could happen.
@Kyle C., I don’t know all the details (and I don’t know the person, so I could never ask that), but I don’t think he backed out at the last minute, I believe others assumed he would come but he never committed.
@Daniel,
That was either a bad assumption on their part, or they should have set it in stone early on. Like Kyle said, whether or not he goes shouldn’t relieve him from paying his portion.
That is the risk you take with group vacations. I’ve had this happen 2x:
The BEST Scenario:
At the last minute one of our roommates bailed on a 5 day trip increasing the cost of our room. Get this…SHE STILL PAID. She felt it was her obligation. It was a relief cause I know some of the other folks in the group were already on a tight budget. Later I gave her a free registration to my conference as a token of appreciation.
The WORST Scenario:
An island vacation group package was priced for 20 people. That dwindled to 8. The prices sky rocketed. The travel agent *promised* me plane tickets at 1 price. Turns out, she was trying to use “buddy passes”…didn’t work. I purchased my ticket at the last minute costing about $400 more than had I purchased when I normally would have. Enough lessons learned there to create a full blog post!
@Lakita (PFJourney), Wow those are two wild ends of the spectrum! That’s great that she still paid! Groups of 20 always seem to dwindle. For Memorial Day weekend, I planned a trip with about 15 others and we said that as soon as we had money from 12 people we’d book a place and then anyone who came would just help subsidize the cost.
I think it’s important to have a cushion of extra funds when traveling in case of emergencies or changes in plan. It’s funny that you mention travel and money, I’m teaching my students about money and why it’s important to save. Just yesterday we had to add saving for travel expenses because many of my student’s relatives live in other countries. They had never thought of that before. (I shocked them with the cost of a plane ticket to Peru!) I’m evil…I like bursting their bubbles ;).
Awesome rule of thumb, I actually have that written down as a topic I need to blog about someday. I literally apply that to so many aspects of both my personal life, and almost every aspect of my professional life. You never want to get caught with your pants down at work.
I also over plan for vacations. I went on a cruise a while back and budgeted about $750. Well I had a bit more fun than I was anticipating, and ended up spending about $850.00 Not that much more, but still, we are getting close to a grand now. Plan for the worst, hope for the best.
I agree with the statement that this almost always seems to happen when large groups are involved. I have a friend who is getting married next month, so we’re having the bachelor’s party in Vegas. Unfortunately, it was at an odd time based on other projects that I had going, presentations that I had to make, and research etc. I still was unsure as to whether or not I was going to make it, so 6 weeks prior to the party, I sent out a general email saying “plan on me not going, and if I can make it I will make my own arrangements.” Although this didn’t make me the most popular among the group, it also didn’t screw up anyone’s finances.
I think that there is always a risk when you are not 100 percent in control, which is the case when you get involved with a group.
I try to plan for the unexpected as much as I can. That is why I will not make any flight reservations unless I am 99 percent sure I will be able to go. For instance we wanted to go to Florida this February and I started planning the trip in September. Because of family circumstances, I decided not to fly because I was afraid we would end up having to cancel. So, I based the trip on driving, and made reservations that could be canceled 24 hours in advance. Even though I was not in control of the circumstances of my family, I mitigated the cost consequences by making arrangements that would not cost me a dime if I had to cancel. By the way, it was a very good thing we did not make those flight reservations because I would have had to cancel them.
In your situation, there is no easy answer. It is not really fair you have to pay 33 percent more, but how do you ask your friend to pay for a trip they can’t go on?
We budget for twice the cost of the actual vacation just in case. For a $1500 cruise, we are prepared with $3000. When we have leftovers, it goes back to the vacation account for our next trip. This keeps me from stressing on what should be a relaxed vacation.
I try not to depend on others when making travel plans because situations like this can so often arise. In any event, even when they do arise we’ve got a “unexpected expenses” fund built into our budget, and covering some extra expenses like this shouldn’t be a big problem.
I agree with the statement, “hope for the best, plan for the worst.”
If I’m organizing a big trip and I know in advance it’s non-refundable, then I sometimes will ask everyone for a 20% deposit up front. Everyone has to do it, even you, so it’s completely fair. If someone bails (which they’re less likely to do after the deposit) and they can’t find a replacment, at least you get a little money for the group. And usually there are no hard feelings if proper expectations are set in advance.
Ahhhh, wait until you get into home remodeling! The rule of thumb is to ALWAYS play for the time to completion to take 50% longer, and the costs to also be 50% greater than the original bid! Once you get that mentality, anything under is a WIN!
It’s all about expectations.
Cheers,
Sam