I’ve Prioritized One Thing Above Everything Else in My Budget. Am I Making a Huge Mistake?

Pay Dirt Photo illustration by Slate. Photo by Getty Images Plus. Pay Dirt is Slate’s money advice column. Have a question? Send it to Kristin and Ilyce here. (It’s anonymous!) Dear Pay Dirt, I am writing for an independent voice on whether I’m being responsible or irresponsible with money, or there is some other perspective I need to consider. I currently spend maybe 20 to 30 percent of my after-tax budget on one line item. Travel to to see my parents. My husband, small daughter, and I live quite far away (20 to 36 hours flight time) from my mother and father. My father is heading to 90, and my Mom is younger, but unable to travel for health reasons. So two or three times I year, I pay for flights and accommodations so that I can visit them with my daughter. I know spending nearly a third of my income on this is high, but I really don’t feel bad about it. Would I like to and should I save more? Yes. However, I don’t feel motivated to have more in my bank account when it would be at the cost of my family having this opportunity to create shared memories during this very precious window of inter-generational overlap. Would appreciate your thoughts. Will I regret my “no regrets” lifestyle? —No Regrets Dear No Regrets, There are only two things you can’t buy in this world: time and health. Your parents are aging rapidly, you live on a different continent, and you have a young child. That means spending money to buy memories. Spending 20 to 30 percent of your after-tax budget sounds alarming as a percentage, but if you’re not sacrificing the essentials—housing, healthcare, retirement and your child’s future—then now is when you spend that money. You don’t know how much time you have left with your parents, and I can tell you from personal experience that making the most of every available dollar to build up the memory well is worth it. On the other hand, if making these memories is putting you in financial jeopardy, or if you’re using debt to fund them, then you’ve probably crossed the line between intentional and reckless. Assuming your retirement accounts are funded, you’re not borrowing to travel, and your spouse is onboard, keep going. Sadly, this particular expense has a relatively short shelf life. Please keep questions short (<150 words), and don‘t submit the same question to multiple columns. We are unable to edit or remove questions after publication. Use pseudonyms to maintain anonymity. Your submission may be used in other Slate advice columns and may be edited for publication. Dear Pay Dirt, I cannot figure out how much I need in savings for retirement! I have a paid-for house and will get a pension (including a Medicare Advantage plan) and a little bit of Social Security. I can live (frugally) on the pension and the Social Security money; that’s the plan, since I’m not a big traveler or car-buyer or whatever. I am single and have no children or dependents besides cats. But how much additional savings do I need for emergencies? $100,000? $500,000? $5 million? $10 million? I am at the age where I qualify to receive the full pension, but have no idea if I’ve got enough savings. —Baffled Dear Baffled, I wish you had provided me with a few more specifics. But, in general, you need enough savings and investments to cover the difference between frugal (and fine) and an emergency or two that could wipe out a modest amount. Assuming you can indeed live on your pension and Social Security, then we’re talking about pricing out the occasional extras and the unpredictable stuff, the true reason emergency funds exist. The big categories include: Home repairs. Even paid-off homes need roofs, furnaces, and water heaters. For a single-family home, you’d want to budget at least $2,500 to $5,000 per year for the repair or replacement of a major system. If you live in a condo or townhome, you’ll want to look at how well funded your association is and decide if you need even more for assessments. Out-of-pocket healthcare costs. Whether you have Medicare or Medicare Advantage, you’ll face out-of-pocket maximums and need to cover coverage gaps, which might include dental, vision, or hearing care. You should plan for $15,000 to $20,000, or more if you have a chronic illness or larger gaps in coverage. Long-term care. This is the wildcard. A year in assisted living can run from $60,000 to $120,000+, depending on where you live and how much help you need. If you don’t have long-term care insurance, you’ll need a lot more, perhaps $250,000 to $1 million. Even that may not be enough, but having that kind of cash will buy time and options. General cushion. You’ve got a pet and pets can be expensive. You may have car repairs (if you have one), unexpected travel for a family or friend crisis, and inflation eating into your pension. Or, something else might come up. This might run another $15,000 to $20,000 over the years. If you add it up, you probably need between $300,000 to $700,000, which is a lot less than $5 or $10 million. Since you’re not funding a lifestyle upgrade or leaving an inheritance, I’m probably over-estimating these costs, but it’s good to be conservative. What you’re planning for is resilience. You might want to consult with a financial planner, who can model your pension details, Social Security Estimate and current savings, and let you know if you’re on track. —Ilyce Classic Prudie An old friend of mine recently died in a tragic accident. At the time of his death, he had three girlfriends and they still don’t know about each other. Should I tell them? 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