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Financial Etiquette: Who Pays for What on Vacation?

These 3 tips can help you avoid misunderstandings when traveling with family or friends

WE’VE ALL BEEN THERE: THAT AWKWARD MOMENT when the restaurant bill comes and it’s not clear who’s paying. Should you split it evenly—down to the decimal point? Or will one person magnanimously pick up the whole tab?

“The scene you want to avoid is having two or more people play tug-of-war with the bill,” says Stacy Allred, head of Merrill Lynch’s Center for Family Wealth. “It’s easy to arrange in advance for it to be given to you. Or you could just step away from the table and settle up while you’re waiting for dessert.”

What’s tricky with dinner can be even trickier when you’re dealing with larger expenses, like a weeklong vacation with family or friends. Allred offers the following three simple rules to help you avoid any misunderstanding.

“The scene you want to avoid is having two or more people play tug-of-war with the bill.”
— Stacy Allred, head of Merrill Lynch’s Center for Family Wealth

1. Establish who’s paying what up front. “If you want all or part of the vacation to be a gift, say what you’d like to pay for, what you won’t be paying for and why you’re giving the gift,” she says. You could cover the cost of renting the beach house, for instance, and your friends could offer to pay for groceries or meals out.

2. Get creative. If you’re covering the big up-front expenses, it’s important that you leave the door open for people to help out in non-monetary ways, such as preparing some of the meals or planning excursions. “Everyone will feel better knowing they brought something to the table,” Allred says. And don’t forget that accumulated travel miles can be a friendly alternative to dollars, she adds.

3. Can you make the trip more affordable for everyone? Focusing on what everyone hopes to get out of the trip can help clarify how money should be spent. Are there expenses that you can compromise on? “Don’t let money stop you from enjoying one another’s company,” says Allred. “That’s the real reason you’re traveling together in the first place.”

3 Questions to Ask Your Advisor

  1. Can I afford to treat my extended family to a reunion vacation without jeopardizing my other financial goals?
  2. How can Merrill Lynch’s relationship with Virtuoso help me as I plan my next vacation?
  3. Can Merrill Lynch’s mobile apps help me track my expenses on vacation?

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