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Memories vs. Money

With the soaring stock market fattening investment portfolios and retirement savings accounts, it is tempting to treat the family to a once-in-a-lifetime vacation, but first consult with a financial adviser

By Joanne Cleaver

Don't tell my kids, but ... if I strike it rich, we're all going to the Galapagos Islands, all expenses paid. Three adult kids, three spouses, five grandkids.

A pair of blue-footed boobys (Sula nebouxii) at Galapagos Islands in the Pacific Ocean. next avenue, financial planning
Before you book that trip to the Galapagos Islands, take a moment to consider what you might be sacrificing in the future to fund the blowout trip.  |  Credit: Getty

College fund? That's what scholarships are for! Just think of the education they'll get seeing tortoises and lizards in the Darwinian snapshot that is the islands!

Many of us boomers feel rich. The stock market is on a tear, our home equity is raising the roof and inflation is finally flattening. Why don't we invest in memories with the kids and grandkids?

Plenty of us have fingers on the trigger of a blowout family vacation that we think will make us the toast of our eventual funerals. A just-released report from the Transamerica Center for Retirement Studies found that 36% of retirees are prioritizing travel and 88% have close relationships with family and friends.

Sorry, Kids ...

The intersection of those two passions explains this fall's finding from Booking.com, a travel reservation platform: 45% of boomer parents would "rather spend money on a trip of a lifetime than leave an inheritance to their children."

But is it really smart to put memories before money?

But is it really smart to put memories before money? As tempting as it is to put reverie into action with reservations, financial planners say that the urge to splurge is better viewed as a moment for reviewing all aspects of the legacy you want to leave.

The yen to spend was unleashed in the wake of the pandemic, says Angela Ribuffo, a Certified Financial Planner and president of Raion Financial Strategies in Anchorage, Alaska. "It's the whole 'life is short' thing," she says. More clients than ever "want to spend what we could consider legacy money on making memories with their children and grandchildren. They want to see them enjoy it and enjoy it with them," says Ribuffo. After all, the fundamental point of leaving a legacy is that you've ... left.

Step 1: Stop and Think

The urge isn't bad, but before you put down any deposits, take a beat and review the ramifications of a travel binge through the lens of your values, your definition of financial stability and the long-term consequences of a short-term splurge.

Will this trip actually achieve what you think it will in terms of family intimacy and scrapbook-worthy memories? The Transamerica study found that retirees agree that a fulfilling life is entered around close relationships with family and friends, a sense of purpose and a positive view of life. But at the same time, the study found that 30% of retirees can barely make ends meet, and nearly the same proportion say they are overwhelmed and anxious.

If that's all too familiar, think about how you might achieve your family relationship goals without exacerbating financial stress, say advisors.

"It's about the power of your goals," says Kathleen Parks, a CFP in the Knoxville, Tennessee, office of the financial advisory firm Apella Wealth. "For every family, it will be different."

A key consideration is what you might be sacrificing in the future to fund the blowout trip. Markets go up and markets go down. If you spend a stock market windfall on a trip, you might short-circuit your ability to fund other big-ticket goals, such as grandchildren's college tuition, weddings or house purchase down payments.

Memories Made at Home

When you think about what kind of memories you most dearly want to build, you might discover that you can achieve them through less expensive experiences — domestic travel, or maybe through thoughtfully designed local outings. If you hope to have one-on-one time with each grandchild, hit the "pause" button to sketch out several ways to do so, recommends Parks.

One idea: revisit your own most cherished memories with your grandparents. What was the setting? The Eiffel Tower or your grandparents' back yard? What makes those memories special? The exotic setting or being understood and loved for your own little self?

Weighing the location and the love separately will help you realize how you truly define a successful experience ... and from there, the money it truly requires.

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But, advisors agree, as counterintuitive as it may seem, if and how to take a marquee trip is not an opportunity to exercise the family democratic process.

First, it's important to have discussions about your estate plans, financial resources for late-in-life care, and related topics separate from a splurge. Addressing desires on a par with financial requirements inaccurately implies that they're equally important. Long-term and final financial plans merit their own discussions.

If the kids are used to handouts, you might inadvertently up the ante to a ludicrous level by asking what the kids think of a grand European tour.

As well, you don't want to imply that a big trip is an entitlement, says Parks. Baby boomer parents have become accustomed to covering adult children's routine expenses, such as cell phone bills, and adult-transition bills, such as apartment security deposits. If the kids are used to handouts, you might inadvertently up the ante to a ludicrous level by asking what the kids think of a grand European tour.

Your Money, so You Choose

Ribuffo adds that asking the kids for their input might also imply that you're working with a big pot of money that you intend to spend on them if they don't want the trip. The last thing you want, she says, is to invite the expectations that the kids have veto power over how you spend what is still your money. "There need to be boundaries," she says.

And if an adult child tries to convert a prix fixe trip as a personal financial buffet by proposing that their share of the trip expense be spent on them in a different way, you need to be prepared to say, "We're not prepared to have that conversation," Ribuffo says.

"Be really clear what your goals are before you open that conversation," agrees Parks. "Run some scenarios, see what the financial effects are, and then, if appropriate, have the conversations. It's your money. You get to choose."

Joanne Cleaver
Joanne Cleaver is a freelance writer based in Charlotte, N.C. She covers women's issues, travel, entrepreneurship, financial planning and retirement readiness. She has authored seven nonfiction books, the most recent being The Career Lattice: Combat Brain Drain, Improve Company Culture, and Attract Top Talent. Read More
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