Financial Etiquette When Traveling: Who Pays For What On Vacation?


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We’ve all been there: that awkward moment when the restaurant bill comes and it’s not clear who’s paying. Should you split it evenly—down to the decimal point? Or will one person generously pick up the whole tab? What’s tricky with dinner can be even trickier when you’re dealing with larger expenses, like a weeklong vacation with family or friends.

With summer vacation plans under way, we sat down with Rachel Barzilay, CAP®, CFP®, CRPC®, Managing Director, Wealth Management Advisor and Senior Portfolio Manager with Merrill Lynch Wealth Management in Boca Raton, to discuss tips that can help you avoid misunderstandings when traveling with family or friends.

How can you afford to treat loved ones with a vacation without jeopardizing your other financial goals?

It’s important to establish who’s paying for what up front. If you want all or part of the vacation to be a gift, say what you’d like to pay for, what you won’t be paying for, and why you’re giving the gift. You could cover the cost of renting the beach house, for instance, and your friends could offer to pay for groceries or meals out.

It is important to budget carefully and set financial expectations in advance, especially because people’s philosophies on money and priorities tend to differ. It is also important to be mindful of long-term versus short-term financial goals. You don’t want one vacation to interrupt your long-term financial goals, like saving for retirement.

What are some creative ways to reduce costs?

It’s important that you leave the door open for people to help in non-monetary ways, too, such as preparing some of the meals or planning excursions. Everyone will feel better knowing they brought something to the table – even if it is more in the way of coordinating and organizing trip details. In addition, don’t forget that accumulated travel miles can be a friendly alternative to dollars.

Another tip is to try traveling on a less-traveled day, like a Thursday instead of a Friday. A lot of the best fares are released on Tuesdays. Also, flying on the actual holiday can save money as well as leaving from a secondary airport —for instance, flying out of Ft. Lauderdale International Airport, which tends to be cheaper than flying out of the smaller Palm Beach International Airport.

How can you make the trip more affordable for everyone?

Focusing on what everyone hopes to get out of the trip can help clarify how much money should be spent. Are there expenses that you can compromise on? One thing that is for sure – don’t let money stop you from enjoying one another’s company – that’s the real reason you’re traveling together in the first place. The more planning you do ahead of time, the fewer decisions you’ll have to make in real-time. Although that doesn’t mean you have to plan every detail of your trip — leave yourself open to spontaneous adventures knowing that you’re all on the same page about your budget.

Are you paying for travel and lodging? Should individual families be responsible for their own airfare? Who pays for meals? Lift tickets? Theme park passes? A lack of clarity about these details can undermine the sense of family unity a trip is intended to create. If your entourage is sizable, it’s essential to budget carefully in advance and determine financial responsibilities up front.