Don’t Be Scared of Reality

As I said, we were in Europe for two weeks and got back on Thursday. And as Christy put it so well, vacation budgeting can be quite a challenge. I (Annie) am working on frugal vacationing (a post soon to come), and I’m pretty decent at it compared to what I did in the past. But it’s just so hard to track, especially when you’re using three different currencies!

I made a budget before I left, tried to plan out my itinerary as well as I could (I really stink at it because it kills my soul), and tried to make wise purchases while I was out. At one point during the second week, however, I think I had a screw-it moment. My budget suffered the same fate as my diet which was thrown out the window during the first day or two.

I found myself making purchases that I wouldn’t have made in the first week. At that point I just figured that I was already screwed, so I might as well just have fun and worry about it when I got home. Now don’t get me wrong, I wasn’t making extravagant purchases of crystal and gold, but it was more like extra little gifts for my kids, a second glass of wine, or a sweet treat with my espresso. (Don’t worry; I’m still cheap.)

So my husband was like, “How are we with the budget?” And I’m like, “Uh…you’re the one that wanted to go out to eat tonight. And I don’t really know. I’m kind of scared to check.”

So we have a little convo about how I suck at planning itineraries, but then he says, “Reality is never something to be afraid of; that’s something YNAB taught me.” Of course. He was absolutely right.

Later that night he downloaded our transactions and saw where we were at. My prediction was that we were $1,000 over what we budgeted for. But in reality, at that point we were projected to end our vacation at about $250 over what we budgeted for. Now don’t judge me…but that’s not too bad. We’ve had vacations where we’ve gone about 4 times more than that over. Plus, this time we had a little padding left in our overall budget for just such an occasion, so we were fine.

He was right, though – knowing reality was much better than being left in the dark. Being in the dark is scary and stressful, and it just leads to more irrational behavior. But knowing that I overspent by $250 was manageable, and it led me to more rational behavior.

21 Responses to “Don’t Be Scared of Reality”

  1. SomeGuySomewhere

    We recently returned from our first vacation while using YNAB. We ended up $148 over budget over the course of 9 days of vacation. Considering previous vacations were “put it on the card, figure it out later”, I was very happy with only overspending by $148. My wife and I played a little whack-a-mole the day after vacation and all was well.

    And I fully agree that knowing reality is better than not. For years, I would put my head in the sand regarding debt. I’d refuse to use Mint, or any other tool that showed the reality of our finances. Now, I look at it at least twice a month.

  2. Michelle

    Annie, at least you went with a budget. We used to go on vacation with… $336 in the bank account, and we paid the minimum on our credit card, so we have $143 available to charge on that just in case we forgot about an automatic payment from our bank. So we’ll save the credit card for WHEN we run out of money in the checking account. Wait! Better use the credit card first, before they charge the $131 interest and fees. I can’t remember when they charge the interest (because I never bothered to look or reconcile anything), and I’ll just have to live with the overdraft fees.
    So, in the end, our $300 “planned” weekend getaway ended up costing us over $500+ due to fees and interest (which we are still paying as we eliminate our debt). And a not so enjoyable vacation, because we were too afraid to go or do anything we really wanted to, afraid our card would be declined.
    Today we are slowly building up our vacation fund in YNAB while dedicating most available monies to debt elimination. When the credit card is paid off, we plan to celebrate with a well planned vacation next year.
    Thanks for the awesome article!

    • annie

      Whew girl, that sounds stressful (but can’t say I haven’t been there)! Good on ya for your new and improved plan. ;)

  3. Bruce

    We managed to be quite frugal on our vacation. I fly home today, and I guess I overbudgeted for the vacation, not knowing whether we would be frugal. Now I have to decide whether to leave that in the Vacation category for later, or move it to the Mortgage and reduce the inevitable balloon refinance.

  4. Aaron C

    This post resonates with me as when I started as a YNABer, I looked at the program as something that forced me into change. Now one of my most closely held principles is quite simply, “Bad news does not get better with time” which is a close relative to the main topic of this blog entry. Nicely put and a word to the new YNABers out there!

  5. Nicole

    I had this exact moment last week: I was stocking my pantry and bought (what I thought was an excessive amount of) groceries. I avoided logging the transactions (I had to go to 3 different stores) for a few days – and when I finally faced reality, I realized that I had budgeted more for groceries that I’d thought. I was actually doing ok!

  6. Nathan

    This exact thought, “Being in the dark is scary and stressful, and it just leads to more irrational behavior,” is exactly why budgeting never worked for me in the past. I would inevitably blow it in some way or another and stop looking out of fear, making everything more scary and stressful and leading to a terrible cycle of irrational behavior.

    You can always fix it if you’re aware that it is broken, but if you ignore it, you’ll just break it further.

  7. Lisa

    I have been learning this lesson too slowly over the year that I have been YNABing. Occasionally, my dining out category gets a little bloated and until I reconcile everything, I will continue to make extravagant choices. Once I have put it all together though, I find I naturally scale back and stick to my budget.

  8. Eva

    Hi Annie,
    Could you share how you used YNAB and the four different currencies? I am able to track with one, but I don’t Know how to handle a lot of different currencies. Thanks!

  9. catesalim

    I’ve also been learning this as time goes. My husband still likes to live blindly by the budget, so I’m still the budget cop when it comes down to it. What I’ve learned is despite sitting down with him and planning, he thinks things are going to cost less than they actually do. Last year when we took a vacation, I ended up putting more into our budget than I thought we’d spend. I’d update it daily, and telling him where we were at, which drove him a bit nuts, but helped. We ended up coming in under budget.

    We’ve been planning a huge vacation for next May, and I’ve been socking away for it. Out of the blue, he decided that we should go out of town over Thanksgiving. Sooo, I’m back to budget cop again. I’ll plan higher for the Thanksgiving trip, look for great deals, be as frugal as I can without being annoying, and then what we don’t spend there will spill into the trip for next year.

    • annie

      I’ve learned, too, to be a little more realistic with budgeting for it. In the past I’ve been overly-optimistic about how little I’ll spend, and it doesn’t do me any favors.

  10. Eric

    Not with vacations, but I’ve been there with the budget… The oh, my, gosh, where are we really at feeling can truly be a dark place to be… and even if things are extremely dark and gloomy in reality, it’s always best to know before things get even messier.

    Then, you feel it and can safely move back to continuing on with the bumps of life (big or small).

  11. Sarah


    It’s like you are reading my mind. My husband and I are going to Europe for a little over two weeks in September and while we have been meticulously planning and saving for this since January I am at a complete loss as to how to track our expenses in YNAB while on the trip.

    We have paid for all travel, hotel, and many of our tours ahead of time but we will still have the expense of food and other miscellaneous things while we are there. How did you track those expenses (in different currencies) in YNAB.

    The best I can come up with is to enter the transaction using a flat exchange rate and put the actual amount in euros in the memo box and when I get home do my best to reconcile. I believe this will get us close to having an idea of our spending throughout the two plus weeks.

    How did you track your expenses while on vacation? Or did I completely misunderstand your post and you didn’t track?

    • annie

      It’s a challenge for sure, but you’re right to pay for as much as you can while you’re still home. Then for the rest of it, check the admission prices on the websites and budget for all of those. Then I usually give myself a budget for gifts and souvenirs, and getting cash out for that works nicely (set it aside to not get confused with other money). Then I usually give myself a per diem for food and use cash. I know it usually gets much more confused and complicated than that, but that’s the simple answer. ;) Have fun on your trip!!!

    • michaelh

      Hey Sarah, this is Annie’s husband. We’ll probably write a blog post on this because we’ve been to Europe three times with YNAB right there and have learned a lot. But for now, here are a few more ideas for you:

      Make sure you both have a chip in your credit card. Many people, especially in Eastern Europe don’t take a credit card without a swipe. This prevented Annie from renting a bike one day and was a major bummer (I had an EMV and she didn’t) See http://en.wikipedia.org/wiki/EMV.

      Give yourself (if possible) a few hundred dollars of buffer so mistakes that you make aren’t a big deal. You will quickly realize that you are in Europe and that this doesn’t happen every day, so you don’t want to be stressing out about money. A buffer will enable:

      For meals, you can do two things:
      1) At the airport, just withdraw your meal budget in cash and use the old fashioned envelope system. You’ll likely incur ATM fees but it makes it very simple.
      2) Use your credit card and do a calculation of dollars in your mind when you do it. For example one Euro is 1.3 dollars. So if something is 10 euros I tell myself that it’s $13 and that it’s within my budget (or around my budget) and go on with my life.

      Any credit card transactions will show up almost immediately as converted into dollars, so if you’re doing a best guess conversion during the day, at night you can look at your pending transactions and you’ll see those transactions in dollars. Make sure you use a credit card that doesn’t charge you a huge conversion fee (we use the barclay travel card because of its rewards and for this reason too).

      Finally for meals I’d recommend using yelp or trip advisor to find places. If you do this beforehand, it’s great. You might consider getting data in Europe to make things easier, but we managed to find enough Starbucks or McDonald’s free wifis to get the information we needed. A lot of times you can end up going a few blocks outside of the normal tourist trap and get something more authentic and much cheaper. So I’d recommend looking at your itinerary now and finding options for where you’re going to be. I think the most expensive aspect of our trip was the panic eat out at a tourist trap.

      So for us what worked was:
      1) We had a buffer in place when we left of hundreds of dollars
      2) We reconciled stuff in YNAB after we had our little moment Annie talks about

      What didn’t work:
      1) Annie didn’t have an EMV card
      2) We didn’t plan where we wanted to eat out ahead of time and get an idea of the budget
      3) We weren’t doing this daily and spending 10 minutes a day planning and seeing where we were at

  12. Christy

    I’m green with envy that you’ve been in Europe!! I’m hoping to make it back once the baby is a bit older. (My mom guilt is out of hand! So I either need the kiddos with me…. Or a prescription for Valium! ;) )

    I’ve been tallying our vacay receipts since we’ve been back too. Sure- there were several dinners that were decadent and a visit to a theme park, but overall we were much more prepared and our budget didn’t take as much of a hit as it has in the past. $250 over is pretty darn good, if you ask me! Great job!

    • annie

      You’ll be there sooner than you know it! We did Skype and Facetime with the kids, and they loved it. They loved spending time with family at home, too, so it was a win-win. Those times with family are really important for them.

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