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What if You Traded 1 Disney Vacation for an Investment?

by Dana George | Dec. 18, 2019

The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.

As tough as it can be to say no to the people we care about, sometimes saving for their future is a greater act of love. 

This is a very Grinch-like question, but how would you feel about trading a trip to Walt Disney World (or Hawaii, or Rome, or any other destination that tickles your imagination) for an investment that may enhance your child's future?

There's no denying that vacations are good for the soul. And travel definitely provides valuable life experiences. It improves our understanding of other cultures, makes us smarter, and creates lifelong memories. In short, I am in no way suggesting that you give up something as valuable as travel. What I'm proposing is that you trade one large vacation for a smaller, less-expensive one, and invest the remainder of the funds.

A dad helping his laughing young son ride a bike through a park.

Image source: Getty Images

The genesis

Holidays aren't the only area where you can make cuts and invest the difference. A colleague recently told me about a friend of hers from college. This girl's parents never bought her the latest fashions or toys. Instead, they invested the money they would have spent on those things. According to my colleague, this girl (now a woman) was the first of her college friends to buy a home -- using funds her parents invested on her behalf. 

The idea struck me as brilliant and led me down a bit of a rabbit hole. Still, it was a rabbit hole that felt worth investigation.

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Mickey Mouse is great and all ... 

The cost of a four-night trip to Walt Disney World in Orlando, Florida for a family of four can really add up. A discount trip with inexpensive lodgings (away from Disney properties) costs in the neighborhood of $3,500. A deluxe four-night Disney experience will run closer to $9,500. For the sake of this illustration, let's split the difference and assume a cost of $6,500 -- a nice, but not overly-extravagant Disney stay. 

Now, if we were the parents described above, we would probably use $2,000 to pay for a less-expensive, but still memorable, trip somewhere and invest the other $4,500. Say their daughter was eight years old at the time and their investment earned 9% interest (10% is the S&P 500's historic average rate of return). By the time she graduated from college at age 22, the $4,500 investment would be worth more than $15,000. And that assumes it was the only investment made on her behalf. If they added $100 per month, it would be worth $46,260.

If you're wondering how a family of four can take a fun vacation for $2,000 or less, you can find ideas here, here, and here. I promise, it can be done. 

Smaller tweaks

The aforementioned rabbit hole led me to other trade-offs that can be made, different ways to find money to invest, without leading to a sense of deprivation. 

Imagine your 14-year-old will simply die of embarrassment if you don't buy him or her a new iPhone. If you think your child is ready for a phone of their own, pay $20 for a prepaid smartphone from a discount retailer and invest the $680 you saved by not purchasing an actual iPhone. The bonuses are clear. You won't be as upset when your child loses the phone, and the investment may be worth $1,355 by the time he or she has reached the age of 22. Spoiler alert: Your child will not die of embarrassment upon receiving anything other than an iPhone. 

There are many ways to cut corners without cutting quality of life. For example:

  • Trips to a local park instead of a fancy playset in the backyard. Savings: $400. Potential investment value after 15 years: $1,457. 
  • A rule that all television viewing must be in a family living space. Savings on TV in child's bedroom: $150. Potential investment value after 15 years: $546. 
  • Not purchasing a keyboard for your child until you figure out whether he or she actually enjoys piano lessons. You can purchase a proper piano once the child shows real interest. Savings: $2,000. Potential investment after 15 years: $7,285.
  • Giving your child a spending limit of $75 for tennis shoes, rather than giving in to the latest, most extravagantly-priced models. Savings: $75. Potential investment value after 15 years: $273. 

None of these savings and/or returns appear life changing, but that's the point. We spend money in hundreds of different ways, especially when it comes to giving our loved ones the things they want. Sometimes it would be kinder to save that cash as in time those savings can add up to a healthy portfolio.

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All about balance

For most of us, funds are not unlimited. What if we took a great vacation every two or three years and small trips in between? What if we occasionally said no to buying expensive (sometimes ridiculous) things for the people we love? What if we valued our futures as much as we value the present?

My colleague's friend must have been thrilled when her parents gifted her with returns from the investments made through the years. Still, I suspect the true gift was a series of lessons they taught her along the way, like wisdom, forward-thinking, and how trying to keep up with the Joneses is a really bad idea. Bet that Jones kid didn't have parents whose wisdom allowed her to buy a home right out of college.

Using the wrong broker could cost you serious money

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About the Author

Dana George
Dana George icon-button-linkedin-2x

Dana has been writing about personal finance for more than 20 years, specializing in loans, debt management, investments, and business.

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