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Booking Summer Travel with Kids: Balancing Parenthood and Financial Sanity

Financial Planning Dentist

As parents, we want nothing more than to see our children’s faces light up with joy as they embark on new adventures. The Taylor Tribe is trying to see family in Illinois and Florida, beaches in California, and some new local campgrounds here in Colorado. If the timing of it all weren’t enough, the budget is always at the front of our minds. The dream of the “perfect” family vacation often lingers in our minds, with images of idyllic beaches, thrilling theme parks, and magical destinations – visions of Clark Griswold come to mind. 

However, it’s essential to acknowledge that perfection is subjective and that the true essence of a memorable family trip lies in the quality time spent together, rather than extravagant expenses.

Traveling the world and exploring new destinations is an enriching experience that many aspire to. However, the misconception that travel must be expensive often discourages people from fulfilling their wanderlust. 

The truth is, with careful planning, resourcefulness, and a dash of creativity, you can embark on memorable adventures without breaking the bank. In this article, we’ll delve into money-saving travel tips that will help you find cheap flights, affordable accommodation options, and unique ways to experience your destination without compromising on the fun.

Flexibility is Key:

One of the first secrets to unlocking affordable travel is flexibility. Keep an open mind when it comes to travel dates and destinations. This point will be hashed and rehashed through this article – flexibility can be fun, and is always the cornerstone to frugality. Being flexible with your schedule can enable you to take advantage of off-peak seasons, last-minute deals, and discounted fares. Use fare comparison websites or set fare alerts to monitor price fluctuations and snatch up the best deals when they arise.

Financial Solvent Travel

Fly Smart and Save:

Finding cheap flights requires a combination of strategy and patience. Consider these tips to save money on airfare:

Be open to budget airlines: While they may not offer the same frills as full-service carriers, budget airlines can often provide significantly lower fares. Research different airlines and compare prices to find the best deals.

Embrace layovers: Direct flights are convenient but usually more expensive. Opting for flights with layovers can sometimes result in substantial savings. Just make sure the layover time is reasonable and factor it into your overall travel plans.

Use flexible airports: If you have multiple airports within a reasonable distance, compare fares for each. Sometimes flying into or out of a nearby airport can make a notable difference in ticket prices. I think travelers may be surprised at the fares they get from some lesser-trafficked Airports.

Accommodation without Breaking the Bank: Finding affordable accommodation options is essential for budget travelers. Consider the following suggestions:

Embrace alternative accommodations: Instead of expensive hotels, explore alternatives like vacation rentals, hostels, guesthouses, or even homestays. Websites and apps like Airbnb, VRBO, Hostelworld, and Couchsurfing offer a range of options suitable for different budgets. In many of my travels, I prefer the comfort and convenience of Airbnb and VRBO-type situations. The ability to dine in, and in many cases, the space to spread out is appealing.

Location matters: Stay in neighborhoods slightly away from tourist hotspots to find more affordable accommodations. This way, you can experience the local culture while enjoying lower prices.

Stay longer: Many accommodations offer discounts for extended stays. Consider staying in one place for a longer duration to take advantage of reduced rates.

financial planning travel and parenting

Immersive Experiences on a Budget:

Experiencing a destination doesn’t have to drain your wallet. Here’s how to make the most of your adventure while keeping costs in check:

Embrace local cuisine: Instead of dining at touristy restaurants, explore local markets, food stalls, and family-run eateries to savor authentic cuisine at a fraction of the price. It’s a delicious way to immerse yourself in the local culture. This might be my favorite – I love finding these “off the beaten path” spots. 

Seek out free or low-cost attractions: Research and discover the hidden gems of your destination. Museums with free entry days, public parks, local festivals, and street art tours are often budget-friendly or even free.

Opt for walking or public transportation: Exploring a city on foot not only allows you to discover hidden gems but also saves money on transportation. Utilize public transportation systems like buses, trams, or metro networks, which are usually cheaper than taxis or ride-sharing services. 

Traveling on a budget doesn’t mean compromising the quality of your adventures. By applying these money-saving travel tips, you can embark on exciting journeys without draining your bank account. Remember, it’s all about being flexible, seeking out affordable flights and accommodations, and immersing yourself in the local culture. With careful planning, you’ll be able to create cherished memories for yourselves and your children.

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The present value (PV) is the current value of all future sums of money or stream of cash flows given a specified rate of return. Future cash flows are discounted based on the time value of money referred to here as the discount rate, and the higher the discount rate, the lower the present value of the future cash flows. So at it root it represents a standard way of valuing an investment in todays terms. How to do the Math:

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December 12, 2020 No Comments
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Kevin Taylor

What Constitutes “Like-Kind” in a 1031 Exchange?

The requirement for tax-deferred exchanges of property has always stated that the Replacement Property acquired must be of a “like-kind” to the property sold, known as the Relinquished Property. This principle has been in effect since the addition of IRC Section 1031 to the tax code in 1921. The basis for this requirement is the “continuity of investment” doctrine, which states that if a taxpayer continues their investment from one property to another similar property without receiving any cash profit from the sale, no tax should be triggered. However, it is important to note that this tax liability is only deferred, not eliminated. Given the significance of this requirement in tax-deferred exchanges, it is essential to understand what exactly “like-kind” means. Fortunately, in the context of real property, the analysis is straightforward. For 1031 exchange purposes, all real property is generally considered “like-kind” to each other, irrespective of the asset class or specific property type. Contrary to common misconceptions, a taxpayer selling an apartment building does not need to acquire another apartment building as a replacement property. Instead, they can choose any other type of real estate, such as raw land, an office building, an interest in a Delaware Statutory Trust (DST), etc., as long as it meets the criteria of being considered real property under applicable rules, intended for business or investment use, and properly identified within the 45-day identification period. It’s worth noting that personal property exchanges are no longer eligible for tax deferral under Section 1031 since the Tax Cuts and Jobs Act amendment in 2018. This leads us to the question: what qualifies as “real property” for Section 1031 purposes? Examples of real estate interests that are considered like-kind include single or multi-family rental properties, office buildings, apartment buildings, shopping centers, warehouses, industrial property, farm and ranch land, vacant land held for appreciation, cooperative apartments (Co-ops), Delaware Statutory Trusts (DSTs), hotels and motels, cell tower and billboard easements, conservation easements, lessee’s interest in a 30-year lease, warehouses, interests in a Contract for Deed, land trusts, growing crops, mineral, oil, and gas rights, water and timber rights, wind farms, and solar arrays. In December 2020, the IRS issued new regulations that provide further clarification on the definition of real property in the Code of Federal Regulations. These regulations specify certain types of “inherently permanent structures” and “structural components” that qualify as real estate and are eligible for exchange treatment. Examples of inherently permanent structures include in-ground swimming pools, roads, bridges, tunnels, paved parking areas, special foundations, stationary wharves and docks, fences, outdoor advertising displays, outdoor lighting facilities, railroad tracks and signals, telephone poles, power generation, and transmission facilities, permanently installed telecommunications cables, microwave transmission towers, oil and gas pipelines, offshore platforms, grain storage bins, and silos. Structural components likely to qualify as real property include walls, partitions, doors, wiring, plumbing systems, central air conditioning and heating systems, pipes and ducts, elevators and escalators, floors, ceilings, permanent coverings, insulation, chimneys, fire suppression systems, fire escapes, security systems, humidity control systems, and similar property. It’s important to note that foreign real estate is not considered like-kind to U.S. real estate, according to Section 1031(h) of the Tax Code. However, U.S. taxpayers can exchange foreign property for foreign property, which is considered like-kind and eligible for Section 1031 exchange treatment, with some limited exceptions. In addition to meeting the like-kind requirements, the potential replacement property must be formally identified within 45 days of selling the relinquished property, and the identified property must be acquired within 180 days of the sale. Property received by a taxpayer that was not identified or received within these timeframes is not considered like-kind. In the past, there was a misconception that the like-kind requirement meant trading into the same type of property that was sold. However, the true intention behind the like-kind requirement has always been to maintain the continuity of investment. While Section 1031 exchanges previously applied to personal property, intangible property, and real estate, the amendment in 2018 restricted exchanges to only real estate. Nevertheless, the determination of what constitutes like-kind real estate has remained unchanged—all types of real estate are considered like-kind to each other.

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July 17, 2023 No Comments
Investing 101
Articles
Peter Locke

Investing 101

If you’re lucky enough to have previously started investing in your teens consider yourself way ahead of the curve. For the majority of people Investing 101 is for you. Most of us start investing in our mid to late 20s, but for those that start as early as possible can set themselves up for an incredibly lucrative future. Where should you start for Investing 101? There are a couple of places that will have the largest impact on your net worth. If, let’s say you have a summer job and you’re making $5,000-$10,000 a summer or you’re working throughout the year then opening an investment account is a great place to start.  For us, saving anyway in any type of account is great. While we like all accounts for different reasons, we like the Roth IRA the most when you’re young. A Roth IRA is like a bank account with different advantages. It enables you to save money that you’ve already paid taxes on and those savings grow tax free until you turn age 59.5 penalty free. Now we love the Roth IRA because typically when you’re young your income is fairly low so taking advantage of low tax rates is a great strategy.  Since you’ll be in the lowest tax bracket in 2020 (things may change in 2021) then paying taxes now for your money to grow tax free for multiple decades can have a profound impact on your wealth. The reason is called compounding growth. Let’s say you make it very easy on yourself and just buy into the SP500. It’s an index that tracks the 500 largest companies and you can invest in all of them using one investment vehicle. Let’s break Investing 101 down. A stock is a way to own a part of a company. An Exchange Traded Fund (ETF) is a basket of stocks that give investors exposure to typically hundreds of companies. Since you cannot buy an index like the Dow Jones, SP500, or Nasdaq (different indices) directly, you have to buy a vehicle that gives you exposure to them. That vehicle can be a ETF, which is usually a less expensive and passively managed investing vehicle when compared to a Mutual Fund. A Mutual Fund (MF) is a basket of stocks just like an ETF that is more actively managed and usually more expensive way to gain exposure to the same stocks. The difference being whether or not you think someone can actively outperform the index (MF) or you just want general exposure to the index (ETF). You can argue both sides so do what makes you feel comfortable. ETFs and MFs have different tax obligations but this isn’t as big of a concern until you’re in higher tax brackets.  If picking stocks is difficult, you aren’t interested in it, or you just want things to be more simple, investing in ETFs is an incredible way to bring you long term wealth.  ETFs and MFs typically pay what’s called a dividend. This dividend is like a thank you from the company for investing in that company. It’s a cash payment to you, typically quarterly, that you can use to reinvest back into your ETF or MF, a new stock, or whatever else.  Think about your investment portfolio like a business. This is the core to Investing 101. Your business takes money and hopefully makes you money. When you make more money you either spend it on yourself or put it back into the company. When you put it back into the company the company grows and makes you more and more money over time. This is a great way to think about investing in an ETF or MF. Every quarter, without you having to work at all, your fund is paying you and you can reinvest that money to grow your portfolio more and more.  Wealth isn’t created overnight. The secret to wealth is long term saving and investing. Hence, those that have time on their side have the greatest ability to accumulate wealth. So what else should you be thinking about?  After investing in yourself first, think about where else you spend your money. We wrote an article on the difference between erosive and accretive debt. If you find yourself buying lots of clothes, expensive shoes, fancy gadgets, and new cars then you’re not investing in your “portfolio business”. When you stop investing in your business you stop growing. Each time you do this the effect is compounded.  For example, if you invested $1,000 and $100 monthly for 40 years at 9% interest rate (average gain of the SP500) you would have ~$436,000 at the end. But let’s say you invested $1,000 upfront and only $50 monthly over the same time period and same interest rate, you’d have ~$234,000! That is a massive difference for only $50. That could be one meal out for you and your significant other, one new shirt you liked that you didn’t need, a car payment on a new car because you didn’t want a used car.

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December 19, 2020 No Comments

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