The "Splurge Affect"

How many times have you or someone else said, "let's splurge" when it comes to dinner choices or while out shopping for various things?  We all like to splurge occasionally and just enjoy ourselves and throw budgets to the wind.  Some of us splurge on a daily basis when we head down to our favorite coffee house and pay $4.00 for a cup of coffee that would only cost us $0.75 if we made it at home.  The splurging we do takes money out of one budget coffer and moves it to another.  Some of us call that other coffer the "fun money" or "mad money" coffer.  It is the money we give ourselves each month to just have fun with and, if you are like me, the fun only lasts for a few hours.

Now think about your splurging that you might do each month how much it might add up to if you took that splurging amount and saved it for a year.  How much are we talking?  $600?  $1200? More?

Ok, you know I am a travel consultant so surely you have figured out that I am going to bring this topic around to travel.  So here it goes.  I deal with traveler's budgets on a daily basis.  Some are good...some are not so good.  I define not so good as those budgets where someone only wants to spend $500-$750 per person on a 6 night trip to the Caribbean.  That is just not good.  No easy way to say it. It is a limburger cheese budget.  So that brings up the splurge affect.  Those same folks or in fact anyone who is looking to travel, needs to look at their splurging that is done on a monthly basis.  Maybe you don't feel like you splurge on anything.  Good for you.  But a lot of us splurge, we just don't call it splurging.  We call it normal life because we think eating out or buying a Starbucks cup of coffee is normal when it fact, that is something a lot of people around the world could never afford to do.  But I digress.

Add up the splurging you do and be honest about it and annualize it.   Now think about that amount and the how much time of enjoyment it really gives you.  Now let me show you how the splurge affect can relate to your next vacation.  Most people will take a 5 to 7 day vacation these days.  So while that upgraded cup of coffee or dessert or entree may bring you enjoyment for an hour or so, vacations bring enjoyment for a minimum of a few days if not for a lifetime.  So if you splurge in the amount of $50 per month, that same amount of "fun money" could get you:

• Upgraded from coach to business class
• Upgrade from an ocean view (window only) to a balcony stateroom on a cruise
• Upgraded from a "garden view" to an ocean view room at a resort

If you splurge on the order of $100 a month, you could

• Upgrade from coach to business or first class
• Upgrade from a balcony to a junior suite stateroom on a cruise
• Upgrade from garden view to an ocean front with premium club privileges or to a larger suite

Naturally these upgrades depend on destination, time of year etc, but I want you to see that we all make choices.  Maybe the ocean view or even the inside stateroom is all you really want and that is ok.  Maybe a tropical or garden view room is perfectly acceptable which is 100% fine.  But make sure you have factored in the splurge affect before saying that your travel budget is all you can afford and that is what is driving your choice of accommodations or cruise choice etc.   Am I writing this in hopes of getting every client to spend more money on their trips?  Not at all.  I respect every client's budget when it it is given to me.  But what I want you to see is how much it actually takes to possibly enhance an experience that lasts a whole lot longer than some of the things we splurge on daily.   Add up that amount and you might be surprised.   I am also writing this because we travel professionals have too many potential clients these days who come to us with incredibly unrealistic budgets and those same travelers need to go back and re-evaluate their budgets before only allotting a certain amount to their family's vacation.  And trust me, I am not immune to the splurge affect.  I have decided to do some upgrades myself for my next trip and take some of my "mad money" and use it for something other than my Frothy Monkey coffee habit etc.

So there it is...the splurge affect.  I am sure economic students will be seeing this phrase pop up in text books very soon.