Saturday, November 18, 2006

Budgeting a two-week trip to New York City at the end of the year

One of my main short-term projects is planning a two-week trip to New York City at the end of the year. Besides my overall budget and all of the details, I need to decide whether I will pay for the trip out of cash savings, whether to simply charge in on my credit card and pay it off over several months, or some combination of the two.

Paying cash makes the most financial sense, but that would dramatically reduce my limited rainy day contingency fund.

I also have to be careful with hotels which I have to prepay (e.g., Priceline) versus those that I may not need to pay until the January or even February credit card billing cycle.

I am also considering getting a second credit card, preferably with a 0% introductory rate, to easy the financing of this trip.

Ultimately, I do expect that the entire trip will be paid for by the end of April.

Part of my difficulty with funding this trip is that I significantly depleted my rainy day fund by paying off my entire New York State income tax back taxes in one lump sum last month. If I hadn't done that, I could have used that cash to cover most of this trip.

I may opt to carry a balance on my credit card for a few months simply so that I can keep my rainy day fund intact in case any contingencies do arise.

My bias right now is to pay half in cash and half over three to four months.

And if I get a 0% credit card, paying over several months won't cost me a dime.

I have about fifteen credit card offers stacked up right now. Maybe tomorrow I'll pick the best offer and apply for it.

-- Jack Krupansky

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