As a self-employed individual, I don't get paid vacation days anymore, but I remember a few years ago when this benefit was a part of my life and work. According to a recent MSN Money article entitled "Hey! Stop wasting your vacation days":
"According to an annual survey by travel site Expedia (EXPE 0.00%) and Harris Interactive, U.S. workers received an average of 12 vacation days in 2012, down from 14 in 2011. Those workers didn't help their cause by only taking 10 of those days off and lagging not only their notoriously holiday happy counterparts in Germany, France and Sweden, but Singapore, Brazil and Malaysia as well."
This title of this article itself urges people to make use of their vacation days, but this might not always be the best idea. In fact, when I left my previous employer, I had accumulated nearly 38 such days. This might seem ridiculous, but there was a method to my madness.
Additional Assets
I toiled at my work under the knowledge that if I left -- either of my own volition or not -- I would be paid out for my vacation time. Since our vacation time was accumulated in hours, I would be paid for these hours (up to 300) upon my departure. This meant that I could look at this time as additional funds in my personal asset column.
This understanding helped me push to use less vacation throughout my career. I also knew that it would behoove me not only by way of my regular income, but my final vacation payout to have a higher final income (since my vacation payout would be based on my hourly rate) when I left my job. It was nice knowing that each time I received a raise or increased my hourly rate through a promotion, not only was my income going up, but my bank of saved vacation time was worth more as well.
Additional Emergency Fund
My vacation time also acted as a sort of emergency fund. It provided peace of mind knowing that should I suffer a work-related injury, or be laid off, I would have a bank of additional money to rely upon in the form of vacation time. While I didn't rely upon this as my only emergency fund, since I couldn't use it as I might use a cash fund to pay for things like a car repair or medical bills, it was a nice hedge to my emergency fund reserve holdings.
Financial Independence Bonus
I didn't just look at my vacation time as an uncontrollable amenity of my work, but rather as an investment that I could manipulate to my advantage. By viewing my vacation time as money in the bank, rather than just time off, I focused on saving more of it and using less of it. However, I couldn't accumulate more than 300 hours, and once I hit that point, I'd stop adding time to my total, so it was in my best interest to use it at that point rather than lose it. Therefore, as I moved over the 200 hour mark, I began to use more of my vacation time, since by that point, I was accumulating about 8 hours per paycheck.
Also around this time, I began to consider moving into the self-employment realm. Therefore, my vacation time began taking on another role, that of a financial independence bonus. By the time of my departure from that career, I'd just hit the 300 hour total, meaning that I received a big bonus check right at the time I was moving into the self-employment realm and when income was suddenly at a premium. This check was a huge help in covering costs throughout that first year as a self-employed individual.
*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.
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Sources:
Notte, Jason. MSN Money. "Hey! Stop wasting your vacation time" November 16, 2012. http://money.msn.com/top-stocks/post.aspx?post=c084babe-61f8-4684-a7a0-d6353a3b3ef6. November 19, 2012.
