Week 5 – Assignment 2: Create a Budget and Financial Plan for a Vacation Trip
Here is your opportunity to dream! Choose a vacation destination anywhere in the world (to which you must fly) for a 2-week trip (assume you have vacation time from work to take the trip) that you would like to take exactly 10 years from today. This can either be an individual vacation, a couple trip, or a family excursion, depending on your life circumstances. After you pick your destination (remember, dream big), determine the following:
- Determine travel expenses for all members of the group.
- Identify lodging expenses for the entire time period of the trip.
- Estimate the daily food expenses.
- Make a list of activities that you would like to engage in every day of the trip. Determine a cost for each day’s activity list (e.g., tickets to amusement parks, museum entrance fees, boat trips, scuba diving, deep sea fishing, entertainment venues).
- Make a list and associated cost estimate of any other expenses that you believe should be included in a total cost estimate for your vacation (e.g., pet boarding, house sitting, airport parking fees).
- Determine if someone earning a high income or someone earning minimum wage would be able to afford this trip?
Note: You must research all aspects of your list to substantiate your cost estimates; that is, you must demonstrate and/or document how you derived each cost estimate in the list.
After gathering and organizing all collected data, prepare a document describing your destination (including your reason for choosing that location), listing (and substantiating) all costs of the trip (this can be done in a table and must be clear and provide sufficient detail so that the reader understands your interest and passion for your vacation), and determining a total cost of your dream vacation from the time you leave to the time you return.
Assuming that your estimated total cost will grow by 2.5% per year (due to inflation), demonstrate how you would compute the expected future cost of your dream vacation.
Suppose that you can invest money every month into a fee-free mutual fund and that this fund is expected to have a 10% nominal annual rate of return. Using your estimated future cost (including inflation) as future value, determine the amount of money you must save each month for the next 10 years (i.e., 120 months) to achieve your goal. Then, determine the monthly amount you must save if you delay your trip for an additional 5 years (that is, you will take the trip 15 years from today = 180 months) instead of 10 years from today. (Note: Be sure to add the 5 additional years of inflation to the estimated future cost.) Write an explanation for your calculations so the reader is completely clear on how you derived your required monthly deposits.
Based on this numerical representation of your dream vacation, write a well-contemplated critical analysis of your trip. For example, explore questions such as: is this something that you think is worth saving for, have you changed your mind after seeing the reality of the required sacrifice, are you rethinking the location or luxury level of your accommodations or daily outings, and so on.
Note that you must properly cite all reference sites that you used to collect data to estimate your costs value, etc.
Length: 8 to 10-slide PowerPoint presentation, not including title page and references; (You may wish to include appendix pages in your presentation to accommodate any tables, figures, or images that do not fit within your presentation.)
References: As this is your dream vacation, you will be responsible for researching and providing your references. Please list at least three references.
Your presentation should demonstrate thoughtful consideration of the ideas and concepts presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards