Money Musings 💭 A spending recap of our European adventure 🧳
What you’ll find below:
Reflection: A spending recap of our 1 month trip to Europe
Money Move: Potentially the fastest way to increase your credit score
You Gotta See This: The most common credit score myths (and their cost!)
Reel of the Week: Read this if your budget isn't working
We’re home and (still 😆) readjusting after spending an incredible month as a family in Europe. If you followed along on my summer travel journey, you know that a lot went into budgeting for and planning out the cost.
Usually, I'm thrilled by the prospect of a money party, but when I got home, I was surprisingly more hesitant (perhaps even dreading) to reflect on how it went.
While it can be hard to come back to the numbers after a break, it was a weight off my shoulders to see that it wasn’t as bad as I thought (it never is) and this recap will help me plan better for next year.
Here are the parts of my plan that I got right:
We did use points for the flights there and back so the cost cash-wise was minimal. We upgraded on the way back with a super saver reward and it was really fun to have that to look forward to when the trip was over
We didn’t spend too much more on food / everyday life than at home. I credit the exchange rate, reasonable food prices and staying in homes where we could do some cooking. We were also in cities with great public transportation 🚆
Here’s what I didn’t account for:
When I was younger, I remember intra-European flights ✈️ being very inexpensive. I guess when you add luggage and have a group of 5, that looks a lot different. We took a flight from Portugal to Spain and then from Spain to France and they added up to about $1,500
We added on a trip to Disney Paris at the last minute. It wasn’t part of the plan and it was the kid’s favorite part - I don’t regret it. This plus the flights (above), accounts for the entire amount we went over budget
Here’s what I’ll do next time:
We booked half of our accommodations and intra-European flights while we were already on the trip. I think next time I’d have the big things booked in advance for better ability to plan and to have costs locked in
While I LOVED our trip, if we are looking to decrease the cost next year, staying in one area would definitely help (vs. multiple countries)
What has most surprised you about the cost of travel? Did you resonate with any of my insights?
P.S. Are you liking the new summary at the beginning? Let me know!
P.P.S. I'm doing a monthly Q&A. Submit your questions here.
MONEY MOVE OF THE WEEK
INCREASE YOUR CREDIT SCORE SERIES - STEP #2 - CHECK YOUR FREE CREDIT REPORT.
We know our credit score is important but where does it come from?
The information in our credit reports is used to determine your credit score. There are currently 3 credit agencies (or bureaus) - Experian, TransUnion and Equifax - and each has a credit report with information on your debt and payment history, bank accounts and even past addresses.
You can pull these three reports for free once per year at annualcreditreport.com. Read each of them through and check for errors.
Note: These reports DO NOT include your credit score but the information in them is used to determine your score.
Why check your credit report for errors?
According to the Federal Trade Commission, one in five people have an error on at least one of their credit reports. And sometimes these errors negatively impact your score.
I’ve had clients with loans on their reports that don’t belong to them and sometimes those loans have late payments.
If that’s the case, remedying an error on your report is the quickest way to get your score up!
In the press
REAL SIMPLE SMART MONEY AWARDS: WINNING FINANCIAL APPS AND SERVICES OF 2023
In our fifth annual Smart Money Awards, experts helped us select products to help you save, invest, and build your wealth.
We assembled an independent panel of personal finance professionals to help us review the apps, accounts, and services claiming to help you hit your financial goals—build a nest egg, buy a home, use your credit card points (on stuff you actually want), and beyond. These are the winners. Introducing, the best financial apps and services of 2023.
Read the full article here.
YOU GOTTA SEE THIS
THE MOST COSTLY CREDIT SCORE MYTHS.
This commonly believed credit score myth upsets me the most because it costs people the most money. Here it is:
MYTH #1 ⛔️ Keeping a balance on your credit card helps your credit score.
This is NOT the case. When we keep a balance on our credit cards we pay credit card companies interest (a very convenient myth if I do say so myself 🤔). Holding a balance on our credit cards can cost tons of money in interest, especially with credit card interest rates at 20-25%.
Not only does holding a balance NOT improve your score it can actually decrease your score and cost you money in interest.
The other?
MYTH #2 ⛔️ Checking your credit score will decrease your score.
This is not true, but I hear it all the time! You can check your own credit score as much as you want without it impacting your score.
Where I believe this misconception comes from is that it does decrease your score when a lender or bank makes a hard inquiry into your score. They can only legally do this with your permission and it usually happens when you are opening a credit card or taking out a loan.
Hard inquiries stay on your credit report for up to two years but typically only impact your score for one year.
Now you know. Please spread the word! 💬
your weekly money wins
Here are all the amazing money moves you made this week 👏👏👏
Rachel: Paid off a balance transfer
Na Dia: Bought a dishwasher on Labor Day sale and also got a deliver rebate of $100 off
Rachel K: Had my first mini-money party with husband!!
Gabrielle N: Paid off my one credit card with wedding bills on it
Sunny: Moved to a bigger home and cut my rent down by $500/month to increase my investments
Emily G: Negotiated my new job salary and will be making $20K more than my last job!!!
Marissa R: I reached $10K in my 401(k)
Courtney B: Opened a Roth IRA and invested my HSA!!!
Shal: In my country, tax is deducted yearly and last year I wasn’t prepared for the amount of tax I had to pay and had to borrow from my parents. This year I took steps to get my tax savings sorted out in advance by having 10% deducted from my account into a special tax savings reserve. I just got my tax demand and it’s a fraction of what I paid last year (phew!) so I’ve already saved what I needed and the rest can go to next year or into my emergency fund.
Meg: I got smart and disciplined about credit card rewards and was able to take my kids and dad to Europe this summer using only miles
Kristin B: Hubs and had been in a bad habit of eating out this summer. This week we meal planned together and cooked at home for 7 straight days! Not only does our bank account look better, but I FEEL so much better without all that extra sodium etc from restaurant food
Marisa E: Sold a bunch of clothes that were too small on FB marketplace!
Gabriela L: I used my miles to buy me and my daughter our flight back from NJ to Seattle :)
Stephanie B: Bought small snack Bento & big Doritos bag - hoping to send small handfuls of chips w/ fruit
Rachel: Open the first CD of my soon to be CD ladder wooooo
Shelley A: Got my 20yr old son to open a Roth IRA with automatic monthly contributions. 👏🏻
Lindsay S: Started my HYSA
Kate H: Accepted things from a friend, giving her some things. Midwesterners love to trade 😂
Bailey K: Trying to do a no spend September!
Amy R: Eating dinner at home all weekend! No takeout
Grace N: Got a second credit card to get batter cash back on groceries!
Sydney: I opened up a UTMA for my 13 month old!