When Peg Eddy decided to host some old friends from Thailand at her San Diego home, she thought it was going to be a few days of fun and reminiscing. She didn’t realize it was going to break the bank.
First, there was the shopping. She and her husband chauffeured their four guests to stores all over southern California, racking up 1,100 miles in the process. In fact, her guests loaded up with so many shopping bags every day that Eddy had to rent a car with a bigger trunk.Then there were the meals: Five-star restaurants, for lunch and dinner, every single day.
“I felt obliged to cover it all, as they’d hosted us when we visited them in Thailand,” she says. Then there was all the time she and her husband had to take off work to play host. She usually charges $300 an hour for her financial advisory services, as co-founder of Creative Capital Management, but she had to basically write off a whole week.
All told, and not even counting lost income, she estimates she racked up almost $1,600 in entertaining her old friends.
“I’d do anything for them,” she says. “But by the time I staggered to the end of that week, I was very relieved.”
It’s a familiar refrain from hosts, particularly those who happen to live in popular summer locales. If you have a place on Cape Cod, or a Michigan lake house, or a beach home in southern California, you’re likely already enduring a procession of eager summer visitors. And the final bill can amount to much more than you expect.
“Your natural inclination is to be a gracious host: Prepare food for them, show them around, pick up tickets for a show,” says Gary Schatsky, a New York City financial adviser and founder of the advisory site ObjectiveAdvice.com. “It can easily be hundreds of dollars for a weekend. I have an open-door policy — but it can be very costly, both in money and in time.”
Reuters asked personal-finance expert Bruce Sellery, author of “Moolala: Why Smart People Do Dumb Things With Their Money”, to tabulate a sample budget for a weekend spent hosting four guests. Including a couple of dinners, transportation, drinks and snacks, Sellery – who often hosts guests at his cottage getaway – estimates that you should expect to drop around $450.
That said, there are strategies to keep a lid on the costs of hosting so that your budget doesn’t spin totally out of control.
TALK FIRST, DRINK LATER
Discuss expectations beforehand. It may be uncomfortable, but it’s important to establish ground rules early. Whether it’s who will cover Disneyland tickets or the grocery tab or a fill-up at the gas station, having a frank chat before arrival will save a lot of awkwardness later.
“You don’t want to get to the zoo and be looking at each other, wondering who’s going to be paying,” says Eddy.
Invite guests who reciprocate. Yes, hosting friends will set back your bank account in the short-term. But it might also translate into low-cost vacations for you down the road. “If you’re always doing the hosting, houseguests can become a money pit,” says Sellery, who hosts the Oprah Winfrey Network show Million Dollar Neighborhood, which challenges whole communities to increase their net worth.
“Hopefully you invite people who will play host down the road to even out the costs and all the time and energy you put into it,” he said.
Revise your work schedule in advance. If your guests’ visit stretches over multiple days, that could cut into your work week. You could just give your guests a free day or two to navigate the town on their own. Or if you have to take days off to play host, double up on workload either before or after their visit, so you’re not coping with lost income as well. “By definition your guests are all on vacation,” says Schatsky. “But you’re not, and taking time away from work can be your most expensive cost of all.”
Take it seriously when your guests ask, ‘What can I bring?’ That’s an engraved invitation to keep costs down, so accept it graciously when they offer. “The most budget-friendly answer is beverages,” advises Sellery. “Booze is expensive. Sometimes I’ll even ask house guests staying for a weekend to bring an entire meal. Then I’m guaranteed some time on the hammock.”
Load up on free activities. Remember that you’re not the only one interested in keeping costs low. These days, everyone’s keen to hold on to their pennies, so don’t think you’re being miserly by focusing on free concerts, outdoor movies or street fairs. Says Schatsky, “Some events are more cost-effective than others, and guests will respond to that.”
But when it comes to houseguests, even your best efforts to keep costs down might fail miserably. Peg Eddy remembers offering to host a couple of Australian high schoolers for a school exchange program. When they didn’t want to be separated from their friends, six of them ended up bunking in her home. Added to her own two boys, that meant eight ravenous teens raiding the fridge every day.
“I thought, ‘How bad could it be?’ ” she says, estimating she spent about $900 hosting the young Aussies for a week. “But I think they all had tapeworms, because every time I turned around the milk or the juice was gone. I was going to the store multiple times a day. Now I look back on it and think, ‘How did I ever do that?’”
© Thomson Reuters 2012